This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Beware the 'Hold' on Your Credit Card

You may be closer to your credit card's limit than you think -- because of charges you didn't even incur.

Some merchants charge a deposit on your card and can be slow to remove it. And that could spell trouble if your card balance is approaching a credit limit.

I was reminded of this fact in a rather unpleasant manner a few weeks ago, when my American Express (AXP - Get Report) card was rejected at a restaurant because of holds that remained from a recent hotel stay.

A hold, or block, occurs when the hotel, rental-car agency or other company contacts your card issuer to give an estimated total of the charges. If the transaction is approved, your available credit is reduced by this amount. Once you pay your bill, the final charge should replace the block within a day or two.

Here's what happened: I stayed at a Sheraton hotel in Baltimore and paid for my room, plus that of a colleague, with my Starwood (HOT - Get Report) Preferred Guest AmEx. The hotel added holds for each of the rooms, which were still on my card a full four days after I checked out.

Sheyna Bonnity, a customer-service representative at AmEx, told me the holds were for $836, $650, $627 and $50 -- and that the $650 and $627 holds were still on there the Saturday night after Tuesday checkout. That's $1,277 of holds left on a card with a not-so-high $2,300 limit. It is no wonder I exceeded the credit limit.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG
BP $42.50 -0.01%
AXP $77.85 0.01%
CAR $52.53 -2.20%
COP $67.23 0.04%
DFS $58.35 -0.44%

Markets

DOW 17,841.98 -86.22 -0.48%
S&P 500 2,080.15 -9.31 -0.45%
NASDAQ 4,919.6440 -19.6830 -0.40%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs