Holding is a temporary blocking of funds on the card, which is needed to confirm the availability of the required amount. The procedure is often used when booking hotels.
If you book a hotel yourself, several payment options are possible. In some cases, money is debited from the card immediately, in others - only upon check-in. But even with the second option, an amount equal to the cost of living can be blocked on the credit card.
What happens at the time of booking
The hotel can be booked directly on the website, or through a service aggregator (for example, booking). The procedure itself is a kind of agreement between the client, the hotel, the intermediary site and the bank where the payment account is opened. To settle these relations and secure the hotel against non-settling (and, as a result, loss of money), it is required to indicate the card details, including the CVC code.
To authorize funds and guarantee payment, funds are blocked on the card. It is not done often, but some hotels resort to such verification of data correctness and ability to pay. Using the credit card information, the hotel sends a request to the bank. The bank, in turn, blocks the required amount to confirm the availability of funds in the account. The money is not debited, but you cannot use it until the bank unlocks the amount. This usually happens after the financial institution receives a notification from the hotel. In banking language, the procedure for temporarily blocking funds is called holding.
Holding
During the holding process, the amount that will be spent on the estimated payment of the hotel is frozen. The money is reserved for a certain period, the balance available for settlements decreases, but the money remains in the account. The funds will be finally debited only after confirmation of the operation - that is, after check-in or full payment for the room.
If the hotel is paid in foreign currency, then the calculation is made at the exchange rate at the time of payment, and not at the time of holding. It is worth remembering this point in order not to get a negative balance on the card.
Another important nuance - sometimes, for technical reasons, an additional amount is debited from the card account in addition to the blocked funds. This amount will be unfrozen after the end of the holding period set by the bank. If money is needed earlier, you need to contact the bank with documents confirming the operation. It is difficult to do this from a foreign city. Therefore, for safety, it is better to have additional funds so as not to stay in an unfamiliar country without available money.
A similar procedure is possible in hotels around the world. It usually does not cause additional problems. Difficulties can arise if a hotel employee forgets to send a notification to the bank or if the system fails. Information about transactions can be obtained from SMS notifications, in the Internet bank or by calling the hotline.
Regardless of the reason for blocking, funds will not be frozen forever. The banks set the maximum term for the procedure, after which the money will again be at your disposal, even if the hotel does not send a notification. Usually this period is from 9 to 30 days.
How to avoid double blocking and other difficulties
Difficult situations when the hotel has sent a notification or the blocking period has expired and the money is still not available are rare. To avoid difficulties and immediately understand when the funds will be unfrozen, call the bank and clarify the established holding dates. This way you will receive information and reduce the risk that the financial institution will simply forget about the situation.
The failure may have been caused by the hotel. In this case, write to the hotel and remind about the funds blocked on their initiative.
To avoid such situations, open a separate bank card specifically for booking and keep on it exactly the amount that is required to pay for the room. Be prepared for a delay and have additional funds on another credit card.
Perhaps, in this situation, it will be more profitable and easier to make a full prepayment and not worry about possible problems during check-in. But this option is possible only with full confidence that the trip will take place.
