Watch Your Credit Card Bill

There are some companies that will pre authorise a certain amount on your credit card bill, but do those charges get taken off soon enough or at all? Hotels and the car rental industry will hold an amount on your credit card for incidentals such as food, drink, or damage done to the place or car before it is returned. It has been a practice for several years to hold the money. The problem is not all authorizations are dropped right away and some might not be.

Companies want to ensure that they will get paid for the service they offered to you before you pay for it. The authorization allows them to do that. Typically the funds held are based on the charges you will have at the end of the process providing nothing goes wrong.

However, when the bill is paid with cash or another card it is not always helpful to the customer. The customer has to wait at least three to seven days for the charges to fall off. This means there is a problem. Sometimes there are disputes brought up by the consumer against the place they stayed or rented from. The thing that could be the issue is that the hotel could go ahead and charge that amount. Apacs says the businesses don’t have the authority to process a bill unless the customer re- enters the pin. Largely this is true, but that doesn’t stop it from happening on occasion.

If you have been charged twice you can talk with the hotel about the amount by presenting a copy of the statement. This does help with the dispute. If there is a question the customer shouldn’t re- enter the pin. If the customer leaves without paying on a different card or with cash, the business can charge to that original card with a customer not present payment. The disputed transactions can be looked at through the credit card company as well to see if there was a problem.

The best thing to do in a situation like this is to use the same card you booked the reservation with. This way the authorization disappears once the actual charge is made.

Back To Financial News May 2008

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Watch Your Credit Card Bill