By Russ and Tiña De Maris
As more RVing snowbirds hit the road, turning the season into “tour time,” there can be an unexpected bit of financial reckoning. Even as gas prices are still pretty reasonable, there’s still a possible snake-in-the-grass waiting for you at the fuel pump: Debit card holds.
It works this way: You pull up to the pump, insert your bank debit card to pay for your purchase. Let’s say you’re conservative like the “better half” in our family – you don’t like to run the tank too low, so you fill up long before you hit the quarter mark on the fuel tank gauge. So into the tank goes, say, $30. And down the highway you go … for another few hours, when you see that point where you need to refuel. Repeat as above, debit card used, small purchase made, off down the highway.
Maybe you filled three times today, at $30 on your debit card per transaction, and that’s – let’s see – $90, right? Right, yes, but could be “wrong,” too. Each time you use your debit card at a fuel pump, the fuel station owner can place a “hold” on your bank account, not just for exactly how much you bought, but for even more. A typical “hold” could be as much as $75. So $75 times three fill-ups equals a hold against your bank account to the tune of $225, even though your total fuel purchases were only $90. That’s $135 of your precious money that you can’t touch until the hold is released.
“Why,” you ask, “does this happen?” It’s simple. When you use a debit card at the pump, the station is basically pre-authorizing you to buy fuel. The fuel company reasons that it has no idea how much fuel you’ll really be pumping, nor do they know how much money you have in the bank. So they take an educated guess as to the transaction and slap a hold on your account. Later, when everything shakes out, either at the end of the day, or the next day, they pass the actual amount charged along to your bank, who, when they decide to take the hold off the account, do so.
The problem is, if you’re not aware of how many dollars are “held” can lead to a real problem. Let’s say that for two days you’re plowing down the road, racking up $225 worth of holds per day, that’s $450 worth of holds on only $180 worth of real purchases. Meantime, that check you wrote for $200 is presented to the bank for payment. You thought you bought $180 worth of fuel, the check is for $200, and you have $500 in the bank, so plenty of room for the check to clear, right? Wrong! The bank says, “Oh yeah, there’s $500 in the account, but here are holds for $450 worth of holds, so we can’t accept this check.” The check bounces, the bank that presents the check gets after you for the bounced check, and your bank does the same.
Who’s at fault here? A lot of finger pointing goes on. The gas company says, “The bank says when the hold is released, so blame them!” The bank fires back, “We only release the hold, it’s the gas company that tells us how much we should hold.” Of course, you’re the guy in the middle. To add insult to injury, it’s not just gas stations that play the debit card funds hold game. Some RV parks will tie up your account – one, by its own admission, will tie up $50 for up to a full month!
What’s to be done? Unless you have plenty of fluid cash in the bank to handle debit card holds, you’ll need to do a work-around. First, skip using a debit card to pay for fuel purchases. Pay cash or use a credit card. Or, some crafty debit card users who don’t mind a little extra footwork will go inside the station and present your debit card before the transaction. Afterwards, you go back inside and complete the transaction by entering your card’s PIN code. In most cases, the transaction will then be immediately processed through the banking system clearing house, and no “holds” will be put on your account.