Interesting info wrt Credit Cards....at least new to me

[Phil Hoppes]

Just got a call from one of the vendors I was purchasing elements for the kiln I'm building. Seems the CC number I gave them was bouncing. Being the anal person I am, I had no idea how this could happen as I track everything to the penny so I called my CC company to see what was going on. Turns out that when you make a purchase using a credit card, in this case these were on line purchases, the company you make that purchase from puts a "reserve" up against your card for an estimate of the total order. Then when they ship the order they hit your card again for the actual amount. They are suppose to then, at the same time, remove that reserve that was placed against your card. Well it appears many companies are all to happy to reserve against you and charge you but take their good old sweet time in removing the reserve. I had not one but two companies do this to me. Both companies shipped the order I placed on Monday of this week. It's now Wednesday and the reserve is still in place against my card. Since the reserve and the actual charge show up as "charges" against my credit I had an extra $900 against my card that was bogus. Not a problem if you stay away from your credit limit, which I do as in this case I knew I was within $500 from the top. I was holding off until next month before I made any more purchases so as not to have any problems.

This was more than a bit of a shocker to me and I thought I'd pass it on as an FYI to others...

[charlie]

hotels and car rentals also do this, often charging up multiple days as a reserve in case you skip before paying. this can decrease your limit a great deal at a time when you probably don't want to worry about this kind of transaction.

[Geri Comstock]

This happened to my husband and I about 10 years ago while we were in Canada. A car rental company put a huge reserve on our account for some weird reason. Luckily, we had another card to charge whatever it was we were charging in addition to the car rental. We learned a lesson from that...LOL. Always have at least 2 credit cards when you travel.

Thanks for posting the warning. I'm sure many of us didn't know about this practice.

Geri

[Dani]

How does it work with a debit card on your checking or savings account... does the back withdraw the reserve funds?? I see some illegality here.... a trick that companies have gotten away with... but wouldn't stand up in court. Especially since we, the consumers, don't seem to know about it.

[Phil Hoppes]

I've been using credit cards for oh, 32 years now since I was 18 (ok...do the math) and this is the first time something like this has happened to me.

I agree that there is something a little shady on the legality side of this. If a company takes a reserve as an account's payable and then takes the credit charge as income and then they float for as long as they can get away with before crediting the reserve they are double dipping their revenue. Depending on how much they do this and when they are actually inflating their books in addition to screwing up mine and other customers credit for the window that they float.

Me doth think's there is something rotten in Denmark here......

Phil

[lauren]

credit card authorizations (should) expire within 48 hours...so monday to wednesday could still just be that grace period.


we use authorizations at the restaurant i work at when an outside party wants to prepay a meal...but the customer always specifies the exact $ amount they want authorized, we charge through the actual amount after the meal is complete and the bill totaled. depending on the card, some of them ( i can't recall which is which) immediately change the authorized amount to the actual amount in the cardholder's account, while others keep the hold for the authorized amount for 48 hours, at which time it just turns into the actual amount.

but yeah, credit cards are weird.

[Bert Weiss]

There is a sign on one gas station I use that says that if you use a debit card at the pump, they hold $60 for up to 4 days regardless of what you pump. Credit cards do not get this treatment. So going inside and using the card as credit will avoid the hold.

[Alecia Helton]

With Debit Cards the money is not actually removed from your account when it is held on reserve, it is just not available for your use.

The other thing to remember about Debit Cards is that you do not have the same legal rights that you have with credit cards; things like protection against bogus charges ir rights to return products, etc.

Alecia

[Dani]

On the other hand, your purchases are also not recorded on a debit card and the information sold to information clearinghouses, an abominable invasion of privacy as far as I'm concerned. Also, many debit cards today are transparent to the merchant. In fact, I've been advised to simply state that I'm using a credit card if asked, to eliminate additional charges or possible rejections. In fact, the clerk or machine will accept your debit card as a credit card without further ado... or is that adieu

[Bert Weiss]

On the other hand, your purchases are also not recorded on a debit card and the information sold to information clearinghouses, an abominable invasion of privacy as far as I'm concerned. Also, many debit cards today are transparent to the merchant. In fact, I've been advised to simply state that I'm using a credit card if asked, to eliminate additional charges or possible rejections. In fact, the clerk or machine will accept your debit card as a credit card without further ado... or is that adieu

I am under the impression that the merchant pays a lower fee to accept a debit card. For the consumer the only difference is that with a debit card, you can get cash back without any charges.

[Dani]

Cash is a marvelous thing.... nowadays, it's only slightly more risky to have it on your person than checking or credit. The benefits of using it are endless.... something I learned from several bankers during our defamation of characther/invasion of privacy project earlier this year. Sometimes, it's even worthwhile considering a cashier's check or money orders.... for no reason, except to protect yourself! One of the easiest methods of identity theft are checks stolen from your mailbox at home. It was so nice of you to put the flag up, especially at the first of the month! There are lots of reasons that debit and credit cards are not the best monetary exchange. What price convenience?

[Mark Kemp]

On the other hand, your purchases are also not recorded on a debit card and the information sold to information clearinghouses, an abominable invasion of privacy as far as I'm concerned. Also, many debit cards today are transparent to the merchant. In fact, I've been advised to simply state that I'm using a credit card if asked, to eliminate additional charges or possible rejections. In fact, the clerk or machine will accept your debit card as a credit card without further ado... or is that adieu

The card service I'm using doesn't allow me to accept debit cards. If someone gives me a debit card and I don't know it is one. it gets rejected. Which means a problem for me trying to get paid by the customer.

[lissa]

When I had a retail shop, my merchant account charged me MORE when someone used a debit card than if they charged on credit.

That reserve that places do actually worked to my advantage. While in Orlando a few weeks ago I had my wallet stolen, a huge headache and a very worrisome event. But...we had no money, none. We had some money wired to us but the kind soul helping us out couldn't wire a whole lot. Luckily, though since the had placed that reserve, they used it to foot the bill. Thus allowing us to get gas and food to get us home to NC with the wired money.

I do hate how they tack your habits, though. I always opt out of those grocery store cards that get you better deal, I'll pay a few more dollars for some privacy.

lissa.

[charlie]

I do hate how they tack your habits, though. I always opt out of those grocery store cards that get you better deal, I'll pay a few more dollars for some privacy.

lissa.

there's no rule that says you have to give them correct info for a store card. every time i lose mine, i get a new form and fill in different info.

[Barbara Muth]

On the other hand, your purchases are also not recorded on a debit card and the information sold to information clearinghouses, an abominable invasion of privacy as far as I'm concerned. Also, many debit cards today are transparent to the merchant. In fact, I've been advised to simply state that I'm using a credit card if asked, to eliminate additional charges or possible rejections. In fact, the clerk or machine will accept your debit card as a credit card without further ado... or is that adieu

I am under the impression that the merchant pays a lower fee to accept a debit card. For the consumer the only difference is that with a debit card, you can get cash back without any charges.

actually, Bert, every time I use my debit card as a debit card I pay a fee. So the only time I use it as a debit card is to withdraw cash at an atm. otherwise I use the debit card as a credit card.

I was surprised to read about the $60 hold for using the card to get gas. I use my debit card, tell the pump it is a credit card and they check that the card is fine by authorizing a $1 charge. Eventually the real charge comes through the bank. The $1 authorization means that I have $1 on hold until the final version of that charge comes through. It disappears after 72 hours if no charge goes through.

Phil I am surprised you never got hit by that before. For as long as I can recall credit card companies have been doing this. They used to pre-authorize rooms when you reserved them months in advance so your room charges would be on hold until you actually stayed at the room, affecting your available balance if not the actual balance. I suppose they can't do that anymore because they don't. I have found that rental car companies will accept a debit card for the car rental, but when they do, they put a big chunk of money on hold. They prefer credit cards.

[Dani]

My bank tells me that my debit card is transparent to the vendor. And if someone asks me (including a machine) whether it's a debit or credit card, to reply credit card. That eliminates the possibility of rejection. How the bank handles a reserve I'll have to check because I've certainly rented cars without having a reserve placed on my account. And I don't get charged for using my business debit card.... only if I use an ATM other than my own bank's. Perhaps this is one of those areas we need to research to get the best product available? It's easy to get bamboozled. For example, I got my toll-free number through USAA/Sprint only to find out a year after that my local phone company offers the same service for 2c a minute less and no monthly charge. Things change all the time. Now the cheapest long-distance (not to mention the most private) is using those calling cards you get at stores like Sam's Club.

[Phil Hoppes]

Barbara,

In the past I've never run a card this close to the top before. On my personal credit cards I always had a pretty good cushion on the remaining credit available (and I ALWAYS paid them in full every month). I just got a credit card for my studio/business and was wanting to only make these purchases on my business card. Unfortunately the credit limit is low (the business has no credit history) and I need LOTS of neat things for my new kiln so I've managed to run the credit up to within 10% of the limit for this month. I've budgeted for this but was not expecting the "bounce" that happened.

Won't do that again.....

Phil

PS - Plus, I've become a rather huge cynic of big business, especially anything that deals with money like banks, insurance, etc. Basically I trust all of them about as far as I can drop kick them.

[Dani]

Here's another bit of information that will curl your hair... ya gotta stay on top of this day to day, it seems! http://www.cnn.com/2003/TECH/internet/0 ... index.html

[rosanna gusler]

well well well. i bet those guys feel a little less 'above it all' now. good. rosanna

[Barbara Muth]

Barbara,

In the past I've never run a card this close to the top before. On my personal credit cards I always had a pretty good cushion on the remaining credit available (and I ALWAYS paid them in full every month). I just got a credit card for my studio/business and was wanting to only make these purchases on my business card. Unfortunately the credit limit is low (the business has no credit history) and I need LOTS of neat things for my new kiln so I've managed to run the credit up to within 10% of the limit for this month. I've budgeted for this but was not expecting the "bounce" that happened.

Won't do that again.....

Phil

PS - Plus, I've become a rather huge cynic of big business, especially anything that deals with money like banks, insurance, etc. Basically I trust all of them about as far as I can drop kick them.

I had a big crash last month. Deposited several rather large out of state checks to my checking account which happens to have a hefty line of credit for overdraft protection. Two checks were returned for insufficient funds when I had over $1500 in my checking PLUS the overdraft because I had funds on hold. Essentially they wouldn't pay the checks even with my overdraft protection because the checks I deposited a week earlier hadn't cleared yet. Both of the payees were more than gracious about the bounce. My bank insisted that this was standard practice in all banks. I asked them why the hell should I even bother to have overdraft protection if they would bounce checks when I had the money in my account to pay the checks. They dared me to find a bank that doesn't do this. I made a list of banks to call. After the first three informed me that they did not practice this "standard" practice, I figured I had done enough research. As soon as the direct paycheck deposit is switched to our new bank we are closing that account.

BANKS! Who knew they could be so dirty.

Anyway, my sympathies Phil. These days I fantasize about keeping it all in an envelope under my mattress.

Barbara