What does temporary hold mean on debit card?

Answered by Robert Flynn

A temporary hold, also known as a debit authorization hold, is a common practice used by merchants when you make a purchase using your debit card. It is a type of transaction that affects your account balance temporarily.

When you use your debit card to make a purchase, the merchant may request a temporary hold on your account for a specific amount of money. This amount is usually more than the actual cost of your purchase. The purpose of this hold is to ensure that there are sufficient funds in your account to cover the transaction.

Let’s say you are buying a pair of shoes for $50. The merchant might place a temporary hold on your account for $75 or $100. This hold is usually placed at the time of the transaction or shortly afterward. It is important to note that the hold amount can vary depending on the merchant’s policies and the type of transaction.

The temporary hold serves as a guarantee for the merchant that they will receive payment for the goods or services you have purchased. It helps prevent situations where a customer may not have enough funds in their account to cover the transaction, resulting in a declined payment.

The duration of the hold can vary as well. Some holds may last for a few hours, while others can last for several days. During this time, the held amount will be deducted from your available account balance, but it is not yet fully processed as a transaction.

It’s worth mentioning that the temporary hold does not mean that the funds have been taken out of your account. It is just a pending transaction that may or may not be finalized, depending on the merchant’s actions. If the merchant does not complete the transaction within a certain timeframe or cancels it, the hold will be released, and the funds will be made available again in your account.

Here’s an example to help illustrate how a temporary hold works. Let’s say you go to a gas station to fill up your car. The gas station might place a temporary hold on your account for $100, even if your actual purchase amount is only $30. This hold ensures that you have enough funds to cover the potential maximum cost of filling up your tank.

Once you finish pumping gas and the transaction is complete, the gas station will send the final purchase amount to your bank or financial institution. At that point, the temporary hold will be replaced with the actual transaction, and the correct amount will be deducted from your account balance.

It’s important to keep track of these temporary holds, especially if you have a tight budget or need to manage your available funds carefully. If you are unsure about the duration or amount of a temporary hold, it’s always a good idea to contact your bank or financial institution for clarification.

To summarize, a temporary hold on your debit card is a pre-authorization by a merchant to ensure that you have sufficient funds to cover a purchase. It is a temporary deduction from your account balance that may be higher than the actual transaction amount. The hold will be released once the merchant finalizes the transaction or cancels it, making the funds available again in your account.