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Debit/Credit card question

Posted on 08/31/2013 6:21:15 PM PDT by Maine Mariner

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To: ConradofMontferrat

Dude... That’s crazy talk. Carrying large quantities of cash all the time, and storing all your worldly money in your house (or wherever) is really dangerously dumb. One fire and you’re wiped out. One mugger and you’re stuck with no money, no phone and no way home. Hopefully it’s walking distance.

Curiously enough I use exactly the reverse technique. I pay for absolutely everything on my MasterCard. Everything. I also use my online banking to pay the entire balance every -week-. I never carry a balance. I never pay interest. I never pay fees. But— If it is stolen it becomes useless. I don’t use it as a credit card I use it AS cash, but it is safer than cash.

I carry a small amount of cash, and I have some cash in a safe for emergencies, but that’s it.


61 posted on 08/31/2013 8:37:28 PM PDT by Ramius (Personally, I give us one chance in three. More tea anyone?)
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To: Maine Mariner

Ok...the point is that you swiped the card. They put the hold on at the time of the swipe...before you’ve purchased anything. This happens every time you swipe.

When they cancel the transaction, another electronic communication goes to “release” the hold.

No one is getting your money. The gas station doesn’t make a nickel on it.

The issue is whether or not you have the funds. If the swipe goes through and tries to “grab” $75, and you don’t have the funds—the banks automated system may whack you for an overdraft. That too should come off with the release of the hold. If it doesn’t the bank would reverse it the next day..or if they don’t catch it, as soon as its obvious.

This is not new. And it has been litigated to death with the regulators and the banks and every consumer advocacy group known to man.

If this happens at a gas station you frequently use—tell them to get another card processor. That’s where the problem lies—not your bank and not the gas station.


62 posted on 08/31/2013 8:51:48 PM PDT by Vermont Lt (Quis custodiet ipsos custodes? Who will watch the watchers?)
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To: Vermont Lt

This is a prepaid card. We put $400 on the card at the beginning of the trip. Before we swiped the card, there was about $80.00 left on the card.


63 posted on 08/31/2013 8:57:32 PM PDT by Maine Mariner
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To: Maine Mariner

Technical Reason: A gasoline purchase is what is known as a TWO message transaction. But like a hotel check in, the merchant does not know the actual $$ amount of the transaction.

Message One: Merchant wants to know that the card is good and that the merchant will get paid. Therefore they put a hold on the funds that can be used. The amount is a guess since you have not pumped the gas yet. BTW most pumps have a max $ amount per transaction. Used to be $50, may be $75 now. This message is called an authorization.

Message Two: Merchants actually has made the sale and posts the transaction to be paid. If the merchant uses the $1 hold, a new authorization is put through for the actual amount. If the merchant puts a larger hold through, no second authorization is posted and the transaction settles for the actual amount.

At a retail store, the purchase is made at the end of the transaction, so the merchant knows the actual amount. Both messages (authorization and settlement) are transmitted at the same time, but the settlement can take a few days to catch up.

ATM and PIN based debit transactions are one message transactions - authorization and settlement happen at the same time and the merchant is paid immediately (and the money is taken from your account immediately).


64 posted on 08/31/2013 9:04:06 PM PDT by MS from the OC (Obama taking credit for killing OBL is like Nixon taking credit for landing on the moon, John Bolton)
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To: MS from the OC

Excellent comments. However, in our case no purchase occurred.


65 posted on 08/31/2013 9:07:00 PM PDT by Maine Mariner
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To: ConradofMontferrat
Get rid of ALL the friggin cards and pay CASH.

Give me a break. How the Hell I'm going to pay for something I want online? I don't have a dollar bill input thingy on my computer.

66 posted on 08/31/2013 9:41:32 PM PDT by Extremely Extreme Extremist (Governor Sarah Heath Palin for President of the United States in 2016)
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To: Maine Mariner

Can’t say why, my guess its a pending transaction and when it’s not submitted will be gone
Remember the second the card was swiped all the information was given


67 posted on 08/31/2013 10:20:37 PM PDT by svcw (Stand or die)
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To: dr_lew

I had the same thing happen to me last week, put gas in a rental car using my debit card, picked up my car from the dealer and went to get gas a few miles down the road (yet another Chevron) and my debit wouldn’t go through. So I whipped out my credit card and got my gas, got back on the road, and not 5 minutes later I got a call from my bank. The first station I stopped at (Chevron) put a $125 hold on my card. The bank (BofA) cleared the hold, and told me if it happens again, just give them a call. They just want to make sure that the cardholder was making the purchases.

I think that this happens more frequently if you’re using a station that is off a major highway. I was off the 15 in Ontario/Fontana area. Lesson
learned.


68 posted on 08/31/2013 11:34:56 PM PDT by aubreys_mom
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To: Maine Mariner

I’ve heard of this happening before, but never with my banks debit card.


69 posted on 08/31/2013 11:57:52 PM PDT by MacMattico
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To: Yaelle

Many hotels REQUIRE a credit/debit card to register. They will not take cash.


70 posted on 09/01/2013 12:24:48 AM PDT by chaosagent (Remember, no matter how you slice it, forbidden fruit still tastes the sweetest!)
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To: ConradofMontferrat

So if I’m traveling in my RV cross country I need to be carrying $5 to 10 thousand dollars on me?


71 posted on 09/01/2013 12:29:43 AM PDT by chaosagent (Remember, no matter how you slice it, forbidden fruit still tastes the sweetest!)
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To: Maine Mariner
I hate debit cards and I also hate carrying a lot of cash. Just use credit cards and pay the balance off each month. By doing so, you have purchase protection and you build up your credit rating. Not to mention all the benefits you can accumulate such as hotel points, frequent flyer miles, etc. I have a credit score close to 800 and can get approved for substantial loans instantly with interest rates of 2 percent or lower.

I never understood why people would want to pay cash for everything. Once you pay in cash, you really have no proof of purchase other than a receipt (if even you get that) and you set yourself up for getting ripped off or robbed. As for the privacy issue, I don't get it. So what if there are electronic records of me staying at Marriotts, renting cars, buying groceries, eating at restaurants and whatever else I put on my charge card.

It's 2013, not 1932. There's no need to stuff your mattress with cash and pay for things with wads of filthy currency that you have no idea where it's been. If I never have to handle a crumpled up dollar bill again with feces and who knows what else smeared all over it, that's fine with me.

72 posted on 09/01/2013 1:33:41 AM PDT by SamAdams76
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To: Maine Mariner
Yes, your point is well taken and we will do that in the future. But what I am upset about is that NO purchase occurred. The card was swiped; the transaction cancelled.

The nozzle was not even removed from the pump.

This is quite common, and they are within the rules of the debit card agreement.

I had a "friend" who tried to use a debit card to rent a car for a road trip. He gave them his card and they immediately put a hold on about $500, which seems reasonable to me for a week-long car rental. Mid-way through the transaction he decided that he could get a better deal on a car through a different company and cancelled the transaction.

Unknown to him the hold does not go away when the transaction is cancelled, a fact he only discovered when he tried to rent a car from a different company. Their hold put him over the limit for his card and he could not rent a car. Back to the first company and when he tried to re-instate the first transaction, they would only precess a new one. That's right, the new transaction required a hold which was greater than his limit. He was totally screwed.

The real answer to this is to either accept the hold, or get a credit card with a sufficiently high limit that the hold will not bother you.

And, cash is not nearly as good a solution as some think. Not every business accepts cash, and you are on you own for record keeping. With a card, I get an annual summary, which is a lifesaver at tax time...

73 posted on 09/01/2013 4:11:50 AM PDT by CurlyDave
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To: Yaelle
Just the card company protecting itself. Card is prepaid - if one has $100 left on the card and swipes it in a pre-approval device, there is the potential of an overdraw which defeats the pre-paid status. Many folks get pre-paid because their history prevents actual credit card companies from trusting them. The company is protected from losing money to a potential dead beat and the potential dead beat is protected from overdraw charges. Nothing creepy about it.
74 posted on 09/01/2013 4:49:43 AM PDT by trebb (Where in the the hell has my country gone?)
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To: Maine Mariner

Interesting. As an aside, the few times I ever used a prepaid card for gas, the gas station made me go inside and have them run the card.

My guess is that it got run as a credit card and the “swipe” knocked it into a “closed” status. I would call the card issuer. I think your problem is there.


75 posted on 09/01/2013 4:55:38 AM PDT by Vermont Lt (Quis custodiet ipsos custodes? Who will watch the watchers?)
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To: leapfrog0202

As far as not removing the nozzle I’m not sure how in the world they could do a pre-auth unless it’s just done automatically as soon as the card is swiped? I’ve never had that experience and I’m sorry it happened. I realize it’s a lot of money to have held.


You are correct. The authorization happens as soon as the card is swiped.

I’ve been reading some of the responses on this thread to Mr. Peet who works at a local energy company (gasoline, diesel, gas, C-stores, and so so and so on) doing their books. From an intimate knowledge of the process, she’s been laughing herself silly at some of the ignorant responses. (Not yours, though.) The greedy gas station owner guy got the biggest *guffaw* of all.

The clearinghouse that processes the transaction is who puts the lock on the card and process the transfer. This is NOT VISA, Mastercard, or the like nor is it the bank that issued the card; the clearinghouse processes different cards from all kinds of purchase points.


76 posted on 09/01/2013 7:42:09 AM PDT by Peet (Come back with a warrant.)
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To: aft_lizard; Gabz
I have had the opposite of this happen. When my son was in college, we had his debit card linked to our main checking account for overdraft purposes. One day I get a ping from the bank (along with a $16 overdraft charge) to cover a $40 gasoline purchase. It turns out the gas station only authorized the card for $1.00 at the time of purchase. The next day, they deducted the total amount. Of course, dear son was scraping the bottom of his account and did not have enough funds to pay.

He said he knew his funds were low, but he just assumed that the card would not be authorized if there were insufficient funds ... or that the pump would stop when the funds ran out.

The bank told me that it is up to the "point of service" as to how much they authorize the card for. They said is was quite customary for a gas station to only authorize $1, and the settle up the next day.

They did refund my $16, though, because we were long-time customers.

77 posted on 09/01/2013 7:52:55 AM PDT by RightField (one of the obstreperous citizens insisting on incorrect thinking - C. Krauthamer)
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To: svcw

Well, let’s never change “it’s just the way it is.”


78 posted on 09/01/2013 8:45:49 AM PDT by morphing libertarian
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To: morphing libertarian

Contact your bank and demand they change their “hold” policy, and then contact the owners of the gas stations and demand they change their “hold” policy.
As I said, its never been an issue for me because I have money in the bank


79 posted on 09/01/2013 10:01:45 AM PDT by svcw (Stand or die)
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To: Peet

Great information! Thank you for sharing. I never knew it was a clearinghouse which explains a lot.

I once had a pre-authorization put on my debit card from a company that I never ended up doing business with. I called our credit union and asked to have it removed as it was for a fair bit of money and they said they could not remove it. I was surprised, but now reading you response, it’s clear why they couldn’t.

Thank you! I’m sure you and your hubby have educated a lot of people today :-)


80 posted on 09/01/2013 10:10:22 AM PDT by leapfrog0202 ("the American presidency is not supposed to be a journey of personal discovery" Sarah Palin)
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