Authorization Hold

When you make a purchase using your credit or debit card, you might notice a temporary reduction in your available balance, even though the transaction has not yet been processed. This is known as an “authorization hold” or “pre-authorization,” and it can be confusing for many people. In this article, we’ll take a closer look at what authorization holds are, why they are used, and what you can do to manage them.

What is an Authorization Hold?

An authorization hold is a temporary hold placed on your account when you use your credit or debit card to make a purchase. It is a way for merchants and service providers to verify that you have enough funds to cover the transaction before the payment is processed. The hold typically lasts for a few days, but the exact length of time can vary depending on the merchant and the type of transaction.

How Authorization Holds Work

When you make a purchase using your credit or debit card, the merchant or service provider will send a request to your bank or card issuer to verify that you have enough funds to cover the transaction. If your bank or issuer approves the transaction, they will place an authorization hold on your account for the amount of the purchase.

The authorization hold reduces your available balance by the amount of the transaction, but it does not actually deduct the funds from your account. Instead, the funds are “frozen” and cannot be used until the transaction is either processed or canceled. If the transaction is canceled or expires before it is processed, the authorization hold will be released, and the funds will become available again.

Why Authorization Holds are Used

Authorization holds are used by merchants and service providers for several reasons. One of the main reasons is to prevent fraud and ensure that the customer has enough funds to cover the transaction. By placing a hold on the funds, the merchant can reduce the risk of chargebacks and other fraudulent activity.

Authorization holds can also be used to reserve funds for future transactions, such as hotel reservations or car rentals. In these cases, the merchant may place a hold on your account for the estimated cost of the transaction, even if the final amount has not yet been determined. This can help ensure that the funds are available when the transaction is processed.

How to Manage Authorization Holds

Authorization holds can be a bit of a hassle, especially if you have a low account balance or if you need the funds for other purchases. However, there are a few things you can do to manage them more effectively:

  • Keep track of your account balance: Make sure you have enough funds in your account to cover the transaction and any potential authorization holds.
  • Understand the merchant’s policies: Different merchants may have different policies regarding authorization holds, so it’s important to read the fine print before making a purchase.
  • Ask the merchant to release the hold: If the transaction has been canceled or expired, you can ask the merchant to release the hold so that the funds become available again.
  • Contact your bank or card issuer: If you have concerns about an authorization hold or if you believe there has been an error, you can contact your bank or card issuer to discuss the situation.


Authorization holds can be a bit of a headache, but they are an important part of the payment process. By understanding how they work and how to manage them, you can avoid any unnecessary stress or confusion and ensure that your transactions go smoothly.


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