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Gas Station Holds on Your Cards Explained

 Your car is running low on gas. You pull into the gas station to fill it up. It’s a Wednesday night, and you only have $50 left in your checking account, but Friday is payday, and $20 worth of gas should get you by until then. You swipe your card at the pump, fill up with $20worth of gas, and head out. No problem.

 It’s Thursday, and you pull up your account online or via the Mid Carolina CU mobile app to check your account and make sure you’re still doing alright. You’re expecting to see $30 since gas was your only purchase yesterday. Instead of $30, your checking account shows $100. You know you haven’t been paid yet, so how does your checking account have $100 and why is your savings account now $70 less than before?  Then you notice the automatic transfer of $70 from your savings account to your checking account. What?! But you don’t remember making a request for a transfer, and after all, it was only $20 worth of gas! What in the world is going on?

This is a common event that happens when consumers pay for gas at the pump with a debit card. In the scenario above, logic dictates that if you have a balance of $50 in your account and pump $20 of unleaded gasoline your account will have a balance of $30.  The reason logic does not work in this case is because most gas providing retail establishments before permitting you to pump gas, transmit an excessively large transaction (ranging from $50 to $100) against your account.  This transaction places a hold on the monies in your account until the merchant gets around to sending the actual amount of your purchase.  Typically, the timing between the temporary hold transaction and the actual transaction is a few minutes thus you may not be exposed to odd transfers from savings or expensive overdraft charges.

The point is, the stickers you see pasted to gas pumps stating your financial institution is placing a hold on your account are misleading.  Your credit union places a hold on your account only AFTER a merchant submits a transaction request for a specific amount. I have seen merchants place holds as small as $1 to as much as $150.  The merchant controls the removal of the hold as they are the only entity capable of submitting the correct purchase amount and authorizing the removal of the hold.    

So how can you avoid the pay at the pump blues?  First, keep up with your account and strive to save money so the gas pump holds do not cause future problems in your account.  Second, you can pre-pay inside with cash.  Third, pre-pay inside a set amount with your debit card.  A hold will not be needed as the amount will be known.  Finally, use a credit card at the pump.  While going inside to pay can help you avoid the gas pump hold and “skimmers” (check out our website and link below for guidance on skimmers) you lose the convenience factor.  Paying with a credit card may cost a little more as more merchants are charging a differential between Cash/Debit payments and Credit Card payments.  Overall, we stress the importance of keeping up with your account. You can stay up-to-date with transactions online, with our mobile app or our fraud protection app CardValet.  Regardless your transaction method, please remember – though we have zero control over any holds for funds verification placed by a merchant, Mid Carolina Credit Union is  more than willing to help you through the process!

Thank you, and take care!

Scott Conley, CEO
 
Mid Carolina Credit Union
Your trusted partner for over 56 years!


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803-432-8521 or 1-800-433-5226