Keep a tab on credit card blocking to have room for financial emergencies

Cynthia Stewart
May 22, 2007
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When a business such as hotel 'blocks' or keeps your credit card on hold for certain amount while you avail the services of the hotel or business is termed as credit card blocking. It must be sounding rather confusing, perhaps the example below will make things more clear.

When a person checks into a hotel and uses his/her credit card for registration, the booking clerk contacts the credit card company and depending on your estimated stay will tell the credit card company about your bill. Now, the credit card company confirms whether your credit card actually has the ability to pay the sum or not. If the answer is in affirmation the booking clerk will add other expenses such as travel, and utility to your bill and keep the entire amount in reserve.

Credit card block is pretty much useful for travel and business companies, because it helps them get paid for their services and check fraudulent credit card misuse. But, it hurts the credit card holder in more than one ways.

First, the amount blocked during any such activity is usually much more than the actuall bill. The hotels and travel agencies try to include every single expenditure in it to safeguard their interest. This thing can severly limit your ability to pay for other things with the credit card.

Secondly, if one of your credit card is blocked and incidentally you pay off the hotel or other bills with another credit card, the blocked credit card will remain in that state for anything between 10-15 days. The reason simply being that the credit card company doesn't know that the dues are cleared and the block should be removed. Again this will limit your spending ability.

These things can be avoided if a person takes proper measures. The first thing to do is to ask the booking agent about the amount of money blocked on the credit card, and how did they calculate that amount. Secondly, always pay your bills with the same credit card that was used for registration purposes. It will automatically save you from the hassles of getting the credit card unblocked. If for any reason, you have to pay with another credit card, ask the booking clerk to get the previous credit card unblocked, and verify that it was done properly.

Credit card blocking is somewhat good for the credit card holder in a sense that it doesn't allow him to cross spending limits with his credit card and cause unnecessary billing related problems for the hotel or travel company. However, credit card by their inherent nature are instruments to provide financial support during emergencies. By keeping a check on the credit card block, one can ensure that the unexpected financial demands are met easily with the credit card.