US gas stations can now place $175 bank hold on cards

US gas stations can now place $175 bank hold on cards
Published: Jun. 29, 2022 at 2:16 PM EDT|Updated: Jun. 29, 2022 at 6:25 PM EDT
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LANSING, Mich. (WILX) - With gas prices up, two credit card companies have raised the amount they’ll allow gas stations to hold on cardholder’s accounts to $175, putting some in danger of overdraft fees just to fill up their gas tanks.

The Wall Street Journal reported Wednesday that Visa and Mastercard would raise the limit gas stations could hold. Both companies had already raised the limit to $125 in April, when the gas crunch largely resulting from the Ukraine war had pushed the average price of gasoline in the US to around $4.30 per gallon. Now, with prices near $5 per gallon, they’ve raised that amount again.

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Officials from AAA said some may not even notice the change, but for others it could have a major impact on when and where they can refuel their vehicles.

“The pre-authorization is no big deal if you have enough credit on your credit card or cash in the bank,” AAA said. “It becomes a problem when it temporarily limits your purchasing power or puts you in arrears.”

The hold would prevent the card holder from accessing $175 of the money in their bank account for several hours up to several days after the gasoline purchase. For those with lots of savings it may not even be noticed, but for those living paycheck-to-paycheck, which makes up 64% of Americans according to a Lending Club report, such a hold may mean putting off the rest of their purchases for the day until the funds are released.

Holds can also trigger overdraft fees if the card is declined for the hold, even though the cardholder may not have planned to buy more than they could afford.

There are work arounds, however, for savvy drivers. According to Kelly Blue Book, many gas stations allow cashiers to pre-authorize smaller transactions. In addition, a customer could prepay with cash in order to avoid the hold.

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