What is Credit Card Blocking and How to Avoid it

Have you ever had a credit card denied for no apparent reason? It can be embarrassing, but don't worry, there are ways around it if you understand what is happening.

Credit card blocking is done by merchants to insure that the money you charged will be available within your credit limit to pay them. This is usually done by hotels, car rental companies, large merchandise purchases, or large restaurant bills while entertaining. "Blocking" means that a hold is put on the amount of money charged to insure payment if you exceed your credit limit. A block can remain on your account for as long as 15 days.

Blocking can also be done on your Debit Card, automatically reserving the amount of money charged, and deducting it from your account balance. If the blocks exceed the amount in your account, you can be liable for overdrafts and subject to penalties and blemishes on your credit rating.

How To Avoid Blocking

To avoid the embarrassment and inconvenience of Blocking, follow these tips:

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When you check into a hotel or rent a car, or a credit card is required to reserve a service in advance, ask if they are putting a "block" on the card, the amount of the block and how long the block will remain in place.
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Using the example of a hotel stay, it is better to use the same "blocked" card used at the beginning of the transaction for additional services such as restaurant, spa, etc since this will create a new block on the same card. You are OK as long as you are not reaching your credit limit.
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If you use a different card to settle the final charges, remind the clerk that you are using a different form of payment and ask them to remove the Block on the original credit card.
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If you are going to incur an unusually large amount on your card with a major purchase, or vacation, call the credit card company ahead of time to let them know, providing them with the estimated amount. Ask if a block will be put on your account and then make sure you don't exceed your limit on that card.
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Also, when going on vacation or for business travel, tell your credit card company where you are going and give them an estimated amount that you will be charging on the card. Credit card companies are on the alert for unusual chages. If they see your card being used in the Caribbean, they may suspect fraud and call you at home to verify charges. You won't be at home and they may suspend the card, pending verification. This is a nasty problem when you are away from home.
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Make a list of the contact phone numbers for your credit cards and carry with you when you travel in case of any problems or to report lost/stolen cards. If you will be in a location where 800 numbers do not work, call ahead to get another phone number.
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If needed, you can ask for an increase in your limit for a special short-term purpose. If your payment patterns are good, you can usually get this. If you have long-term unpaid balances, you will have a problem.

By observing these steps, you should be able to avoid the consequences of credit card blocking.



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