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When you swipe your credit card to make a purchase, the merchant’s acquiring bank (which handles the payments for the merchant) ensures with your card issuer that you have a valid account with sufficient funds to make the purchase. The funds are deducted from your available credit line as a pending transaction but not yet paid to the merchant.
It is also customary in the hotel industry to place a hold on your credit card when you check in for your stay. That way, the hotel will be covered in case you cause any damage to the room, and also for incidental expenses such as snacks or drinks that you availed of. Car rentals could also place a hold on your card to cover incidental expenses, which would show up as a pending charge.
In the restaurant industry, your final tab will likely include a customary tip and so your initial payment will be a pending payment until the bill is finalized. At gas stations, too, proprietors will likely place a small hold on your card to ensure you have funds.
You may have seen a charge on your credit card account that says “pending” and wondered how long it will stick on your account. And what if you have an issue and want to cancel a charge while it is still pending? Let’s take a look at when a pending charge should clear and what to do if you run into an issue.
When will a pending charge be cleared?
Usually, a pending charge will show on your account until the transaction is processed and the funds are transferred to the merchant. This could typically take up to three days but may stretch longer depending on the merchant and the type of transaction.
In the hotel industry, for instance, a hold for incidentals that appears as a pending charge will be cleared soon after you pay the hotel bill for the charges you actually incurred when you check out. If you use a different payment type such as cash or debit card though (or even a different credit card to pay your bill than the one that has the initial hold on it), it could take a while for the hold to clear with your card issuer.
In the meantime, the pending charges will reduce the amount of credit you have available on your card, so make sure to take that into account when you use your card.
Issue with a pending transaction
What if you have an issue with a pending transaction? In some cases, a merchant may duplicate a charge. For instance, an online merchant could verify your card when you make the purchase and then authorize your card when you are actually due to make the payment (typically after the merchant ships your order). While this sort of hold could appear twice in your pending transactions, you will only be billed once.
Card issuers are not inclined to resolve issues with pending transactions, considering that the amount is not yet finalized and the actual payment due may differ. That’s why you should contact the merchant to sort out any issues you have with pending transactions. If you want to cancel a pending transaction, the merchant would have to contact your card issuer and ask it to cancel the transaction.
And what if the merchant is not willing to sort out an issue with a pending transaction? Perhaps you can’t even reach a representative to sort out your issue. Unfortunately, you can’t dispute a pending transaction with your card issuer. You will have to wait until a transaction actually posts to resolve the matter. You could then avail of the protections that the Fair Credit Billing Act offers to file a dispute about the charge with your card issuer.
The bottom line
Credit card charges typically show up as pending transactions on your account until the transaction is processed or a hold is removed. This could stretch out several days. If you have an issue while a transaction is pending, you will have to resolve it with the merchant. You can’t dispute a pending charge with a card issuer and will have to wait for it to actually post.
I'm an expert in finance and credit card transactions, and I can provide detailed information on the concepts mentioned in the article you provided. My expertise is grounded in a deep understanding of financial systems, credit card processing, and consumer protections. Let's break down the key concepts discussed in the article:
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Credit Card Transactions: Credit card transactions involve the use of a credit card to make purchases. When you swipe your credit card, the merchant's acquiring bank checks with your card issuer to verify that you have a valid account and sufficient funds for the purchase. This is a fundamental process in credit card payments.
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Pending Transactions: When a credit card transaction is authorized but not yet settled, it appears as a pending transaction on your credit card statement. The funds for the purchase are deducted from your available credit line but are not yet transferred to the merchant.
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Hotel Holds: In the hotel industry, it's common to place a hold on your credit card when you check in. This hold covers potential expenses like room damage or incidental charges such as snacks and drinks. The hold amount is usually released after you check out and pay your final bill.
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Car Rental Holds: Similarly, car rental companies may place a hold on your credit card to cover potential incidental expenses. This hold will also show up as a pending charge on your card.
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Restaurant Tips: When dining in a restaurant, your initial payment is often a pending transaction. This is because the final bill may include a customary tip, and the total amount may not be known until the bill is finalized.
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Gas Station Holds: Gas stations may place a small hold on your card to ensure you have sufficient funds to cover your fuel purchase.
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Clearing Pending Charges: Pending charges typically remain on your account until the transaction is fully processed and funds are transferred to the merchant. This can take up to three days or longer, depending on the merchant and transaction type.
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Issues with Pending Transactions: If you encounter issues with a pending transaction, such as a duplicate charge, it's advisable to contact the merchant directly. Card issuers often won't resolve pending transaction issues because the final amount may differ from the pending amount.
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Disputing Pending Transactions: You cannot dispute a pending transaction with your card issuer. Instead, you must wait until the transaction actually posts to your account. If there's a problem, you can then utilize the protections provided by the Fair Credit Billing Act to file a dispute with your card issuer.
In summary, pending transactions are a temporary part of the credit card payment process, and they can impact your available credit until they clear. If you encounter issues with pending charges, you should work directly with the merchant, as card issuers typically cannot assist with pending transactions. Disputes can be addressed after the transaction has fully posted to your account.
