Balance blocked: When credit cards are blocked

You could be the first surprised when credit cards are blocked after making a reservation or advance purchase. You find yourself with a blocked balance, you don’t know what to do and you wonder how long does a credit card block last?

Don’t worry, don’t worry anymore, here you will learn what happens when a card balance is withheld and how to follow up on a credit card balance block.

Let’s not waste any more time and start exploring the world of balance withholdings.

What is a credit card block?

Credit cards can be an ideal means of financing for you, in fact BBC Mundo reports that each American who has a credit card has an average credit debt of US $3,600.

But how to control your credit card spending? Maybe credit card blocking is a solution.

As its name indicates, a credit card block is a credit reserve that the user establishes to pay for a service or product that he has not yet enjoyed. It could also be considered as an amount of money apart from the balance of your credit card, which in the end you will use later when it is time to withdraw the product, enjoy the service or the card blocking period expires.

Balance blocked: When credit cards are blocked

How long does a credit card block last?

According to Creditcards.com’s credit card glossary, a credit card balance hold can also be called a “hold” and can last anywhere from hours to 5-10 business days.

The blocking of a credit card lasts approximately 10 to 15 days, depending on the policies of the company where you are requesting the balance block.

To give you a clearer example of credit card blocks, let’s say you’ve been thinking about taking a Caribbean vacation for weeks and today you decide to save the reception date at your favorite resort in The Bahamas.

All you have to do is call the hotel, choose an arrival date and provide your credit card details. Thus, the hotel company is responsible for reserving the money for the total cost of the room by blocking the balance of your credit account.

Let’s say the room costs $300, that’s the amount of money it will be for. blocked your credit card; you can use the rest of the money, that is, if your card is US$1,000; after the credit card block you could only spend $700 of your credit account.

Key Information About Credit Card Balance Holds

  • The credit card balance lock it’s a simple reservation that departs from the balance of your card, this means that you can continue using your card without problems.
  • The credit card balance lock It is widely used in the car rental industry and hotel companies.
  • Hotels use the credit card block to guarantee the payment of your reservation.
  • The credit card blocking can have a significant impact if you have a card with a credit limit very low. Just think about it, if you have $500 of credit and rent a car for $500, you will have no money left to spend.

How does a credit card block work?

When you are not familiar with blocking the balance on the card, it is common for you to ask yourself, how does a credit card block work?

This process does not have major complications, because when the company blocks the balance of your credit card, the transaction appears in your bank record as “pending” and not as “operation completed”.

When you make a reservation for a service, the company could block an amount less than the total cost; because you could request extra services that could raise the total amount of the bill once you are in the place enjoying the service, so they wait for your stay to end to collect the bill.

The funny fact is that car rental companies could completely block the balance on your card even if the amount exceeds the amount reflected on the invoice.

What is this about?

The reason why they do it is that they know the conditions in which the car leaves, but they cannot know in what conditions you will return the vehicle.

That is to say, they are going to block the total balance of your credit card to insure the expenses that could be generated by an unfortunate event that harms the well-being of the car, your card would be like an insurance policy for the car in the event that you have not contracted insurance.

Disadvantages of blocking credit cards

Blocking credit card balance can be very beneficial if you want to keep your spending limit under control before enjoying a service or receiving a product.

However, a card lock would not be ideal in some situations that could be disadvantageous.

Among the disadvantages of credit card balance blocking we find the following problems:

Long term locks

Imagine you booked a hotel room weeks in advance and your credit card balance was blocked.

The day of your reservation arrives and you enjoy an incredible weekend, but before you leave you must pay the bill and you decide to do it with a check or pay directly in cash.

Surely you think that they will release the blocked balance of your card at that precise moment, but it happens that the term of the balance block has not expired and you must wait 10 more days to have the money in your credit account again; something that can be very annoying for you.

For this type of case, the Federal Trade Commission of the United States (FTC or US Federal Trade Commission) recommends informing yourself well before authorizing a credit card balance block, because once the transaction is made, you must wait that the blocking period expires for the money to be released.

It is best that you consult about the duration of a credit card block before doing it.

It hurts some credit cards

The credit card limit it can be thousands of dollars, as well as it could be about US$500 at least, which makes us understand that all cards do not have the same capacity.

So a prolonged balance lock can affect your utilization rate and thus mark your credit score.

In any case, you should be careful.

Our recommendation is that if you want to reserve a service or reserve the purchase of a product that is on pre-sale, you should be careful with the limit of your credit card because if you block the total balance of your credit account, your card would be completely useless. until the balance on the blocked card is released.

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