What Can You Do About Credit Card Holds?

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When you pay with cash, you either have enough cash to cover the purchase, or you don't. There is no situation where you might give someone extra cash so you can spend it later, or write an I.O.U if you fall short.

With credit cards, that's not quite the case. In addition to making charges, merchants can place holds on your account, rendering a portion of your credit line unusable. This happens most often at hotels, car?rental agencies and cruise lines. The idea is that these companies will place the hold on your account to insure themselves against damages, and to make sure that you?don't skip out on any additional charges you authorize. For example, hotels and car rental agencies?fear that guests may cause damages, while cruises and hotels encourage you to charge food, beverages, and entertainment to your room.

Here are some steps that travelers can take to avoid these?holds, or at least minimize their effect:

1. Ask about credit card holds.?Any time you are asked for a credit card when checking into a hotel, renting a car, or boarding a cruise ship, ask about the credit card hold. Oftentimes representatives will point to a vague policy indicating that customers?will have a hold placed on their account, but it usually fails to include some of those important details. Since its your credit card and your account, feel free to ask representatives or their supervisors of the exact amount of the hold, and how long it will remain.

2. Know?the status of your credit card balances. Before incurring any holds, cardholders will want to know how big their line of credit is, and how much has already been used. Besides, credit card users should always avoid using a large percentage of their credit line, as this can hurt their credit utilization ratio and lower their credit score.

3. Avoid tying up too much of your credit.?There are several ways that you may be able to?mitigate the effects of a credit card hold. Firstly, credit card users with multiple accounts can?choose a card with a large amount of unused credit. In addition, cardholders can also request a credit line increase on a particular credit card. There are also some companies that will accept a deposit using cash or a debit card, although?most people will find that solution to be more of a problem than it's worth.

4. Try to get the hold removed quickly.?One of the worst parts of a credit card hold by a hotel or a car rental company is that it can persist for several days after?you have checked out of the hotel or returned the car. One strategy that can work is to request that the hold be cleared immediately upon receiving the final bill. In some cases, the company may be able to contact the card issuer and immediately release the hold, but otherwise there may be nothing that you can do and the hold will be released "in a few days." Oftentimes, this can involve a call to the card issuer so that you can authorize the release of the hold.

Credit card holds make a certain amount of sense, as I'm sure that there are unscrupulous travelers who will try to avoid payment for the services they receive or the damage they cause. But when travelers understand these credit card holds, and take steps to minimize their impact, then they can continue to?enjoy the security and convenience of their credit cards throughout their travels.

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