Why Do Hotel Credit Card Holds Last So Long?

When you make a hotel reservation, you might notice a substantial hold on your credit card as a pending charge. Although this charge is temporary, it can impact your purchasing power throughout your trip.

While hotels aren't the only businesses that use pre-authorization holds to guarantee funds for possible charges, their holds often last the longest. Let’s explore the purpose of these holds and why they can take a while to disappear from your account.

What Is a Credit Card Hold?

A credit card hold is a merchant's request to pre-authorize funds on your credit or debit card while awaiting a final transaction. Common merchants that may place a hold on your account include car rental agencies, gas stations, and hotels.

Understanding the exact process behind hotel credit card holds can be quite confusing, as various parties are involved, each with their own roles and rules. When checking into a hotel, you're likely asked for a credit card to cover incidentals, room service, or minibar charges. This card will be used by the hotel in case of any damages to your room.

Each hotel sets its own hold amount, typically ranging from $50 to $200, in addition to your room rate (including taxes and fees). Although the hotel won't officially charge you until after you check out, the card issuer will reserve the hold amount in the meantime to ensure you can cover any potential charges.

That pending charge reduces your credit card's available spending limit, which can be restrictive when you're traveling and need extra funds for dining and activities.

Why do hotels implement holds?

Payment networks like Visa and Mastercard mandate holds due to the nature of hotel payment procedures. Whenever a merchant processes a card before the final amount is determined, the card network typically requires a hold to ensure you have sufficient funds to cover a reasonable charge.

This minimizes the payment network's risk of a transaction being declined due to insufficient funds, which could potentially lead to a chargeback.

Why do hotel holds sometimes take a long time to clear?

The duration of a hotel hold on your account can vary by establishment. Generally, holds are released within 24 hours after checkout, but in some cases, it may take up to a week for the charge to completely vanish.

Why does this occur? While you might want to blame the hotel, the real issue lies with the card issuer.

Payment networks establish guidelines on the duration of holds set by issuers. For instance, Visa holds can last up to 30 days, while American Express allows holds for a maximum of seven days. However, while these payment networks enforce limits, each issuer has its own policies regarding how long a pre-authorized charge can remain pending on your account.

Thus, even when a hotel informs a card issuer that a hold is no longer necessary, it may still take a few days for the issuer to clear the original pending charge.

Bottom line

Credit card holds are an unfortunate reality when using a debit or credit card with certain merchants like hotels. The only way to completely avoid a hold is by paying in cash, but that means missing out on credit card rewards and other benefits associated with card usage.

To expedite the release of your hold, make sure to use the same credit card for both the hold and the room charge. If you opt for two different payment methods, it may take longer for the pending hold charge to clear.