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Beware the 'Hold' on Your Credit Card

When I called the hotel, someone named Kelly told me that, "When you checked out, the funds should have been returned to you," noting that "we're not holding the funds -- it's the bank."

Kelly's supervisor, Tia, echoed that line of reasoning: "Once you've checked out with us, that very night, we release the funds." She then said, "It is up to the bank as to how long it takes to release the funds back to you," adding that "usually, this only happens with debit cards."

AmEx spokeswoman Mona Hamouly said the holds are a "way of managing risk," and that they are generally removed as soon as the final charge has been settled.

AmEx isn't alone in this practice. This can happen to holders of cards from Visa (V - Get Report), MasterCard (MA - Get Report), Discover (DFS - Get Report) and others, as well.

Discover Financial Services spokesman Matthew Towson notes that "many hotels or restaurants may do all their paperwork at the end of the week, so the charges may not be submitted for approval until four to five days later. Once the charges have been approved, the hold will be removed."

The holds may not last as long on other cards as they did on my AmEx. Visa Inc. spokesman Paul Wilke said in a statement: "Visa requires that card-issuing financial institutions release all holds within three business days of the authorization request or when the transaction clears, whichever is earlier." He also noted that "Visa does not issue cards and, thus, does not place 'holds' on cardholder funds. The financial institutions that issue Visa cards decide whether to place holds on cardholder funds."

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