Debit Card Holds FAQ
What are pending transactions/debit holds?
- A pending transaction (preauthorization hold) is an approved debit transaction that has not yet posted to your account. When you use your debit card to conduct a Signature/Credit transaction (i.e. you do not enter your PIN), the merchant sends us an amount, usually your purchase total, for preauthorization. This amount is placed on hold and removed from your available balance immediately. The pending amount is deducted from your available balance but is not yet reflected in your posted transactions.
When will a hold be released?
- The hold on the pending transaction will be released after approximately 72 hours or when the transaction clears your account, whichever occurs first. The hold helps determine the available balance on your account through online banking, mobile banking, the automated phone banking and at ATMs, so that you do not spend the amount twice.
Do all debit card transactions clear within 72 hours?
- Some merchants will not send the final transaction through to us within the 72-hour timeframe of the hold. In these situations, the hold will be released and the transaction amount will be added back into your available balance. However, the debit transaction still has to post to your account once the merchant processes the transaction.
For example, if you spend $50 at a restaurant, the $50 will be placed on hold at the time of purchase. If after 72 hours the merchant has yet to send through the transaction, the $50 will be taken off hold and will be added back into your available balance. However, keep in mind that the $50 will be deducted again once it has been finalized by the merchant and the transaction posts to your account.
Why does it take so long for transactions to post to my account?
- When a merchant swipes your debit card, the credit card terminal connects to the merchant's acquirer, or card processor, which verifies that your account is valid and that sufficient funds are available to cover the transaction's cost. At this step, the funds are "held" and deducted from your available balance, but are not yet transferred to the merchant.
Is the merchant required to post a transaction by a certain time?
- At the time of the merchant's choosing, the merchant instructs the credit card machine to submit the finalized transactions to the acquirer in a "batch transfer," which begins the settlement process, where the funds are transferred from your account to the merchant's account.
Will debit card preauthorization holds apply to all my purchases?
- No, preauthorization holds only apply to debit card purchases when you sign your name or do not enter a PIN. Debit card purchases and ATM withdrawals made using a PIN deduct the funds immediately from your account and are reflected in both your current balance and available balance.
Please note: When using your PIN for fuel, the merchant may still send a preauthorization request.
For example: A debit card purchase made at a restaurant or with an online merchant would be treated as a signature or credit transaction and would be subject to a preauthorization hold.
Will the debit card preauthorization hold always equal the exact amount of my transaction?
- Some merchants, especially gas stations, hotels, car rental companies and restaurants, will preauthorize an amount that is higher or lower than the actual purchase amount.
- Gas stations: Gas pump NON-PIN transactions are placed on a small 10-minute hold and are then released back into your available balance until posted by the merchant due to the large pre-authorized hold amounts that can sometimes be placed on accounts by gas pumps. Many gas stations preauthorize transactions for amounts ranging from $1 to $100 because they do not know how much gas you will actually pump. When the transaction is settled, it will only post for the value of the purchase.
- Hotels: When using a debit card to make reservations in advance, hotels generally will preauthorize an amount equal to an overnight stay, or more, depending on the length of your stay. Then, when you actually arrive, the hotel will place another preauthorization, often larger than the cost of your stay to cover possible incidental expenses. Because these can result in significant holds against your account, we recommend using a credit card for hotel reservations.
- Car Rental Companies: When renting an automobile, most car rental companies will authorize an amount greater than the actual rental cost to cover any additional expenses.
- Restaurants: Most restaurants authorize an amount that is slightly larger than the bill in the event that you include gratuity on your card transaction.
What is the difference between my current balance and my available balance?
- Your CURRENT BALANCE is the amount of money that is actually in your account at any given time. It reflects transactions that have “posted” to your account, but it does not include pending, preauthorized transactions. Your account may have purchases, holds, fees, other charges, or deposits made on your account that have not yet posted and, therefore, will not appear in your current balance.
- Your AVAILABLE BALANCE is the amount of money in your account that is available to you without incurring an overdraft/courtesy pay fees. This balance takes into account holds that have been placed on deposits and pending transactions (such as pending debit card transactions), that have not expired, that the Credit Union has authorized but that have not yet posted to your account. Your available balance may show an amount that is higher than your ACTUAL available balance if a transaction has not cleared within the 72 hour hold window.
Can I always rely on my available balance?
- You can review both your current and available balances through our online banking, mobile banking, ATM or local branch. However, it is important to understand that you may still overdraw your account even though the available balance may show sufficient funds to cover a particular transaction. This is because your available balance may not reflect all of your outstanding transactions, such as checks, automatic bill payments or other outstanding debit card transactions that have not yet posted to your account.
For this reason, the best way to know how much money you truly have available at any given time is to record and track all of your transactions closely. You can pick up a debit card register at any NETCU branch.
Examples of transactions not yet reflected in your available balance:
- Outstanding Checks and Bill Payments: If you have written checks from your account or have set up automatic bill payments, those transactions will not be reflected in your available balance when authorized. These transactions will be reflected in your current and available balance when the transactions post to your account.
- Debit Card Holds: If a merchant obtains the Credit Union’s authorization but does not submit a one-time debit card transaction for payment within 72 hours of authorization, the Credit Union must release the hold on the transaction. Since the hold has been released, your available balance would not reflect this transaction anymore until the transaction has been received by the Credit Union and posted to your account.
For additional information, please call one of our member service representatives at your local office. Visit our Locate a Member Service Specialist page for help with locating a local MSR.