Credit Card Blocking                                         

Credit card blocking occurs when a merchant contacts your credit card company with an estimate of what your total bill will be and "blocks" that amount even though he isn't charging your card for the total amount at that time and might not ever charge your card for that amount.

An example of a situation where credit card blocking occurs is when you use a credit card to register with a hotel or car rental service.  They call in an estimate of what your total bill might be to your credit card issuer and have that amount set aside or blocked for possible future use. This way you can't stiff them on the final bill later on.

While an amount has been blocked it cannot be used to make other purchases.   So, if you leave your hotel room to go shopping, you might find your credit card declined on the basis that you have reached your credit limit. 

Some credit card companies will let you go over your limit and then access an "over the limit" fee on your next statement.  These fees are heavy and you want to avoid them if at all possible.

For the above reason, it is not a good idea to use a credit card that you have nearly maxed out when you travel.
Credit > Credit Card Blocking
Ways to fight back against credit card blocking:

  • Avoid punitive fees by calculating how much will be blocked from your credit card and make sure you don't exceed your credit limit.

  • Use two different credit cards when you travel:  one with lots of available credit to use when you expect amounts will be blocked; the other card for everything else.

  • Ask the hotel / car rental clerk how long the card will be blocked.  Pay your final bill with the same credit card you used to initiate the service.  This way the block will be removed within two days of your paying the final bill.

  • Ask your credit card issuer how long they block credit lines.
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