How To Avoid Expensive Credit and Debit Card Holds at the Gas Pump
It’s time to meet your friend, the gas station cashier.
On May 22, 2022, Visa raised the limits of its status check authorization holds on credit cards when paying for gas at automated fuel dispensers from $125 to $175. Mastercard made the same change in April as a response to “trends identified by both retailers and financial institutions,” according to a Mastercard spokesperson. These temporary monetary holds are not new or uncommon, but the increased number has alarmed some consumers. And now that gas prices are soaring and household budgets are stretched thin enough, there are some things you can do to avoid this unnecessary and unexpected sting at the pump.
Card holds are in place to protect retailers from fraud. When you insert your card at the pump, the gas station doesn’t know how much gas you will pump, so it checks that the card is functional with enough money or credit on the account and charges a pre-authorization hold. After you pump your gas, it charges the real monetary amount, and the hold is released at a later time.
“While fuel merchants have always had the ability to set their own pump shutoff limits, this change encourages fuel merchants to allow larger fuel purchases with reduced transaction risk,” a Visa spokesperson said in an email.
Depending on the retailer, the card processing company, and the credit card company, this hold could be released almost immediately, within hours, or other times longer. Both Visa and Mastercard claim that their holds on gas station purchases are limited to two hours. To those who rely on every dollar in their accounts and credit lines, these holds could create major issues or interruptions in their daily lives.
There are ways to avoid these holds, but the methods involve extra time, extra steps, and more trips to the gas station. This is far from an ideal situation, but consumers can only work with what they’re given. Here’s what you can do to avoid risking a credit or debit card hold when you fill up your tank.
Try to Only Use Cash
Cash? In 2022? Yes, cash in 2022, and I’m not talking about the app. If possible, pull out the green from an ATM that does not charge fees, and use the cash to pay for a specified amount before you pump the gas. This avoids cards altogether and hurdles any hiccups you might encounter by using a card.
The downside is that it sucks up more time going to the bank or ATM, you won’t always remember to go to the ATM before you go to the gas station, and it requires more time between the pump and the cashier. You also lose out on the chance for credit card benefits like cash back or points this way.
Know Your Balance and Pay Ahead With a Specific Amount Inside
It’s possible to continue using your credit or debit card without the worry of getting hit with a massive hold, but it’s going to require a bit of extra effort. You’ll have to physically go to the cashier inside the gas station and tell the person exactly how much you want to charge to the card.
“If a cardholder is concerned about potential availability of funds in their account, they have the option to go into the station’s store and prepay a certain amount,” a Mastercard spokesperson said through email.
This skips the holding aspect of the transaction because it’s charging a specific amount. Because the transaction is pushed through immediately, it’ll simply be declined if the account doesn’t have the funds. Before you do this, it’s a good idea to check your account balance, whether at an ATM or online, to make sure your credit or debit lines will be able to support the purchase.
"The Amex policy encourages having a pre-authorization for fuel purchases to help mitigate fraud, but we do not set a specific hold amount," an American Express spokesperson said in an email. "The decision as to the amount is up to the merchant."
Look for the Label or Ask the Cashier About the Gas Station’s Holding Policy
Not every gas station will have the same hold. It might be $1, it might be $50, or it might be $175. In some cases, there will be a sign physically on the pump that will clearly state the hold amount, but not always. If there isn’t a sign, you could also try going into the station and asking the manager or clerk if they know the hold amount.
Unfortunately, it’s not a guarantee that whoever is working the counter at the time will know the number or even know what you’re talking about. Furthermore, if you’re already inside, you might as well just specify the amount you want and pay right then and there.
Anecdotally, when I called around to gas stations in Chicago’s southwest suburbs, most cashiers were not aware what their station’s holds were (or even what a hold was), and many incorrectly suggested contacting the bank. This is something the station should know, however, as certain credit card companies sets the liability limit ($175), while the gas station or card processing company determines the hold amount ($1-175).
If These Options Don’t Work for You, Find the Station With the Lowest Hold
If you don’t want to use any of the methods above, we suggest finding a nearby station that only places a $1 hold on your card and making that your station of choice. This way, you’ll avoid any surprises you might experience at random pumps.
How Often Will I Encounter $175 Holds?
It’s nearly impossible to say. Although the limits were raised, that does not mean that gas stations will automatically follow and raise the holds to $175. Whether the stations are aware of the changed limits or not, some stations might keep the holds exactly where they were before, most commonly at $1, $50, or $100. It’s possible you don’t encounter this at all.
Logic suggests that people in states with higher gas prices, such as California, Nevada, Alaska, Hawaii, and Oregon, or city centers might encounter the $175 holds more often, but that’s not guaranteed. Each person will have a different experience based on where they live.
So to recap: Know your stations, pay with cash, or pre-pay inside the store if you don’t want this kind of disruption to your bank account. And really, who would?