What You Should Kow About Credit Card Blocking

Credit card blocking is one of those annoying little facts of life that only serves to disrupt our finances. Unfortunately, there isn't much that can be done about it unless you decide never to make purchases for which your credit card might potentially be blocked. Usually, a company will block your credit card for an estimated amount of your final payment for goods or services. It is especially common whenever you rent something, such as a car or a hotel room.

Why is Credit Card Blocking Used?
Credit card blocking is a way for merchants to ensure that they will be paid. Since credit cards have credit limits, you could easily use your credit card to rent a car and then make sufficient purchases to reach your credit limit. Then, when the car rental company runs your card for the final bill, it will be denied and they may not be paid for your rental. 

Is Credit Card Blocking Legal?
Absolutely. As long as the amount of the block is comparable to the estimated actual charges, it is perfectly legal. 

How Does the Company Decide How Much to Block?
Credit card blocking is used as a way to safeguard the estimated funds it will cost for the goods or services. For example, let's say that you've rented a car for three days at a rate of $59 per day. The rental car company might then charge your credit card for $177, which is the amount of a three-day rental. Your final charges may be more or less than the amount blocked on your credit card (i.e. if you turn the car in early or if you go over the alotted miles), but the credit card blocking allows the company to ensure that they will be paid at least a close estimate of what they should be paid.