In the modern world, credit and debit cards have become indispensable tools for everyday financial transactions. Whether checking into a hotel, renting a car, dining at a restaurant, or availing various services, these cards provide us with the convenience of cashless payments. However, there’s a lesser-known aspect of using credit and debit cards in such scenarios – card blocking. In this comprehensive guide, we will delve into what credit or debit card blocking entails, how it works, why it can be problematic, and how to avoid its potential pitfalls.

What is Credit or Debit Card Blocking?

When you use a credit or debit card for transactions like checking into a hotel or renting a car, a common practice is for the merchant or service provider to contact the company that issued your card. They do this to provide an estimated total for your anticipated charges. If the transaction is approved, the financial institution issuing your card may place a temporary hold, commonly referred to as a “block” or “hold,” on your available credit (for credit cards) or the balance in your bank account (for debit cards). The purpose of this block is to reserve the necessary funds to cover your potential expenses during your stay or service usage.

Let’s illustrate this with an example: Suppose you check into a hotel where the nightly rate is $100, and you plan to stay for five nights. In this scenario, at least $500 would likely be blocked on your card. It’s important to note that hotels and rental car companies often go a step further and include anticipated charges for incidentals, such as food, beverages, or gasoline, in the blocked amount. The specific incidental amounts can vary significantly among different merchants.

Now, here’s the critical part: If you eventually pay your bill using the same card you initially used when checking in, the final charge on your credit card or the final amount on your debit card will usually replace the block within a day or two. However, if you pay your bill with a different card, cash, or a check, the company that issued the card used at check-in might continue to hold the block for up to 15 days after you’ve checked out. This extended hold occurs because they weren’t notified of the final payment and have no knowledge that you’ve settled the bill through an alternative method.

Why Can Blocking Be a Problem?

While credit or debit card blocking is primarily used as a preventive measure to ensure that cardholders do not exceed their credit limits (in the case of credit cards) or overdraw their bank accounts (for debit cards) before checking out of a hotel or returning a rental car, it can inadvertently lead to several issues. The critical problems associated with card blocking include:

1. Embarrassment and Inconvenience:

If you’re close to reaching your credit limit or have a low balance in your bank account, the blocking process may result in your card being declined. This can be embarrassing, especially in public settings, and it can also be inconvenient, particularly when you need to make an urgent purchase or payment.

2. Potential for Insufficient Funds Charges:

In the case of debit cards, depending on your bank account’s balance, the block could persist even after you’ve checked out, potentially leading to charges for insufficient funds if your remaining available balance falls short of covering your regular expenses.

Biblical Insights and Application

Incorporating biblical wisdom into our understanding of credit and debit card blocking can offer valuable lessons. Proverbs 22:7 (NIV) states,

"The rich rule over the poor, and the borrower is slave to the lender." 

While this verse primarily addresses the dangers of financial indebtedness, it underscores the importance of prudent financial management. Avoiding situations where card blocking becomes problematic aligns with this principle.

Additionally, Proverbs 11:15 (NIV) advises,

"Whoever puts up security for a stranger will surely suffer, but whoever refuses to shake hands in pledge is safe." 

In the context of card blocking, this verse highlights the risks associated with authorizing holds on your financial resources for extended periods. It encourages careful consideration of when and how such holds are applied.

How to Avoid Blocking

To steer clear of the potential complications and inconveniences caused by credit and debit card blocking, consider these practical tips:

• 1. Inquire About Blocking Policies: Whenever you check into a hotel, rent a car, or engage in a transaction where your card might be blocked, inquire with the merchant or service provider about their blocking practices. Ask about the duration of the hold, the criteria for determining the blocked amount, and when the block is typically removed.
• 2. Use the Same Card for Payments: Whenever possible, pay your hotel, motel, rental car, or other “blocked” bills using the same credit or debit card you provided at the beginning of the transaction. Clarify with the clerk when the initial block will be lifted to avoid misunderstandings.
• 3. Notify the Clerk of Alternative Payment Methods: If you intend to settle your bill with a different card, cash, or a check, inform the clerk upfront. Request that they promptly remove the prior block to ensure your available funds are not tied up unnecessarily.
• 4. Explore Overdraft Protection: If you have a debit card and are concerned about blocking leading to insufficient funds charges, inquire with your bank about overdraft protection options. Some banks offer overdraft lines of credit that automatically cover overdrafts, sparing you from potential fees. Be sure to understand the terms and costs associated with such arrangements.
• 5. Compare Credit and Debit Card Offers: When considering new credit or debit cards, take the time to compare offers from various issuers. Ask about their blocking policies, including the duration and types of merchants that may apply blocks. Opting for an issuer with shorter blocking periods can reduce the likelihood of prolonged holds.

Credit and debit card blocking is a practice designed to protect both merchants and cardholders. However, it’s essential to be aware of its implications and take proactive steps to avoid potential issues. By following the tips mentioned above and incorporating biblical principles of financial stewardship, you can navigate the world of card transactions with confidence, ensuring that your financial resources remain accessible and manageable.

Have you ever experienced any complications and inconveniences caused by credit and debit card blocking?