What Are Credit Card Blocks? (2024)

Definition and Example of a Credit Card Block

A credit card block reduces your card’s credit limit by the estimated amount of a transaction. They typically come into play when you use your credit card at merchants such as hotels and gas stations.

A hold will be placed on your card for the nightly room rate for the length of your stay when you use your card to check into a hotel. A hold might also be placed for anticipated costs such as food and beverages.

Your card will be charged for the actual amount you spend. The block should fall off your card shortly after you check out and your bill is finalized.

• Alternate name: Credit card hold

For example, hotels use credit card holds to make sure that you have enough available credit on your card to cover the final bill.

How Credit Card Blocks Work

Due to the nature of their businesses, some merchants don't know the final amount of a customer's purchases until after their credit card has been presented for payment. Examples include hotels, gas stations, and car rental agencies. When you check in to a hotel, for example, the hotel doesn’t know how much you’ll spend on room service, laundry, or food at the property’s restaurants and bars—or if you’ll have to pay for damages to your room.

Because merchants can’t predict what you’ll spend, they estimate the final amount and place a credit card block on customers’ cards for that amount. This protects them against customers not having enough credit available to pay for the final transaction. These blocks reduce customers’ available credit limits. They ensure that the card will be good for payment when the transaction is finalized.

The temporary hold amount will drop from the card within one to two days after the final charge is made on the card. This can create complications for customers when they present one card initially, then another card for the final transaction amount. In this case, the merchant would place a block on the first card but charge the final bill to the second. No final charge would be charged on the first card, so the credit card block would remain until it expires. This could be as long as 15 days.

Different banks may have different policies surrounding credit card blocks. Be sure to ask your bank or credit union about their blocking policies if you’re concerned, because some institutions can be more customer-friendly than others.

It’s also important to ask the merchant if they can process a reversal for the initial block should you find yourself at a hotel or another merchant and need to present a different card for final payment. Speeding up the expiration of a block in this scenario is important because prolonged blocks could result in declined payments.