AARP Eye Center
Sticker shock at the gas pump isn’t the only surprise consumers face when filling up. If you’re using a credit or debit card for payment, you may be shocked to learn there’s a pre-authorization amount placed on your credit or debit card. It’s a common practice among gas stations, but one that’s not well known among many consumers. With gas prices soaring, the pre-authorization hold could temporarily limit your purchasing power or result in overdraft fees depending on how much you fill up.
AARP Membership — $12 for your first year when you sign up for Automatic Renewal
Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP The Magazine.
Why do gas stations do it?
The pre-authorization hold is designed to protect the gas station from fraud. The merchant doesn’t know how much gas you’re getting and wants to ensure there’s enough credit to cover it. It’s up to the gas station’s discretion to set the hold amount.
How does the hold work?
You pull up to the gas pump and swipe your payment card. A request for a predetermined amount, which may be more than the purchase amount, is sent to the credit card issuer. The pre-authorization hold can range from as little as $1 to more than $100. In some instances, the amount of the hold is displayed on the payment terminal.
A gas station could place a $50 hold when authorizing your card purchase for $20 worth of gas. With gas prices up 46 percent in the past year, the hold may be even higher. Gas stations want to make it as easy as possible for you to get gas. If they set the hold too low, you may have to engage in more than one transaction to fill up, which could lead to frustration. “They put a hold on your card to allow you to pump up to that amount because they don’t have the transaction amount,” says Patrick De Haan, head of petroleum analysis at GasBuddy. “It’s more of an inconvenience to have to run two different transactions.”
Flowers by FTD
25% off sitewide and 30% off select items
It’s important to note that while gas stations set the pre-authorization amount, the card issuers determine how long the hold stays on your account. The hold can last up to 72 hours.
Why can it be problematic?
The pre-authorization is no big deal if you have enough credit on your credit card or cash in the bank. It becomes a problem when it temporarily limits your purchasing power or puts you in arrears.