I recently stayed at a hotel in Seattle that put a $1,500 hold on my card without telling me. I only have a $5,000 limit, and I had other expenses on my card, so when I went to pay for some clothes, the charge was refused. The hotel bill was only $800, so I don't understand why they had to put such a high hold on it. How often does this happen, and is there anything I can do about it?
I'm afraid that the amount of the hold you were hit with is not totally out of the ordinary.
Though the hotel took your credit card number when you reserved the room, no charges or holds were placed at that time. It was merely to ensure that the room would be ready for you when you arrived. If you didn't show up or cancel the reservation within a certain time frame, they could also use the card on file to charge you a fee.
At check-in, however, the hotel did place a hold on funds in your account. The amount assessed was based on the price of your room, plus incidentals. It's usually around $50 per night for the minibar alone, plus more to cover the things you could damage or steal, such as spa robes, furniture and television sets. That sum can be quite a bit for high-end hotels, so if you were staying someplace especially grand, that could explain the excessive hold amount.
Unfortunately, the result of such a big hold is that you were not able to purchase the clothes you wanted with that card. I can understand how frustrating that was! Maybe the items were only available at that specific time and place. Without cash to pay for them outright or another credit card to use, you were out of luck.
In the future, call the hotel and ask about its hold policy so you can prepare your finances in advance. If the amount sounds outrageous, and you really want to stay there, ask if it is willing to reduce it. You may even offer an alternative, such as paying for one night of your stay upfront as a guarantee. While credit holds are a matter of policy, hotels are in the hospitality business. Most do what they can to make their guests happy, as they rely on positive reviews and returning customers.
On the credit card side, you may also be able to fix the problem by asking for a larger credit line long before you go. If you've been an excellent cardholder, the issuer may increase your limit to cover not only the cost of a hotel hold, but other charges.
Some more credit advice when traveling: It is ideal to bring at least two cards with you, each with sufficient open credit lines for your projected needs. Check your account statements to see exactly what you owe prior to leaving, too, so you don't get caught short again. While you're at it, alert the issuers that you'll be out of town. Charges from foreign places can trigger a fraud alert, causing your credit line to be suspended just when you need it most.
Finally, make sure you don't come home to overwhelming, unexpected debt. Use your credit card for traveling expenses (especially if you have a rewards program, since accommodations and flights are big ticket items and you can really rack up the points by charging them), but keep enough cash in your checking account to pay for the bulk of what you charge.
As the saying goes, when vacationing, pack half as many clothes as you think you need, and twice as much money.
Got a question for Erica? Send her an email.