Why Gas Stations Place Holds on Debit Cards and Why It Matters

What Drivers Need to Know

• Banks typically place a hold of around $100-$200 on debit card transactions when drivers pay at the pump.
• While these holds aren’t usually affected by gas prices, banks and payment processing companies have raised the hold amounts over the years to account for the higher costs associated with filling up larger vehicles.
• You can avoid excessive hold fees by using your debit card inside or using a credit card.

If you’re one of those people who pays at the pump with your debit card, you probably don’t realize that a hold is being placed on your card every time you fill up. Here’s what that hold is and why it matters.

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Why This Happens

Here’s how it works: If you arrive at a gas station and opt to pay at the pump instead of going inside to pay, a hold will be placed on your card. The reason is because the station’s payment system doesn’t know how much gas you’ll be pumping. Because of that, a temporary authorization hold is placed on your card to ensure you have the funds to cover the cost of the fuel.

Gas station debit card holds aren’t exclusive to a certain gas station or brand. These holds happen nationwide.

The System Is Set Up to Protect Gas Stations, Not Consumers

Debit card authorization amounts are higher than credit cards for one main reason: risk. The authorization is basically just a buffer to ensure that the station gets its money. When you swipe your debit card at the pump, the gas station’s payment system has no idea how much fuel you’re going to pump. The authorization hold is essentially a guarantee that the station gets its money in some way. And with hold amounts that can exceed $100, the system assumes it’ll be enough to cover the cost of whatever amount of fuel you get. If the hold limit was too low (say, less than $100), the station would run the risk of not getting paid the full amount.

Hold Amounts Have Gone Up When Gas Prices Rose

Typically these holds aren’t directly tied to gas prices, but they’ve been adjusted to compensate for higher fuel costs by payment processors. In 2022, gas stations typically had a hold limit of up to $175 for Visa and Mastercard transactions, according to the Consumer Protection Division of the Georgia attorney general’s office. But thanks to the Russia-Ukraine war and the lifting of pandemic restrictions, gas prices rose. Someone driving a large pickup truck or SUV that lived somewhere gas was at or approaching $5 a gallon could easily have a $150-plus fill-up, making the $125 hold authorization obsolete.

So, companies like Mastercard and Visa increased the hold authorizations. The increased hold came with additional levels of fraud monitoring, decreasing risk to gas stations, which also received protections against transactions that might have been more than the old hold threshold. Consumers who owned vehicles with large fuel tanks found that they could actually fill up without having to worry about the pump shutting off if that hold threshold was crossed.

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How to Avoid Gas Station Debit Card Holds

• Using a credit card results in a hold that can be just $1, significantly lower than the $100-$200 hold placed on debit cards.
• You can completely avoid the hold by going inside the station to pay for your fuel.

Having a credit card is one way. While a debit card hold is typically $100-$200, credit card holds can be just $1. Credit cards inherently have lower risk. For one, unlike debit cards where you’re using your own money, you’re basically borrowing the bank’s money when you use a credit card; when the card is used, the bank will pay the station and then give you the bill at a later date. If there happens to be a slight difference in the hold amount or the fuel transaction goes a bit higher, the issuing bank or institution will just absorb that cost.

Second, fraud within the credit card system is regulated heavily with well-established buffers in place to protect consumers in the event that fraud happens.

Lastly, not everyone can get a credit card thanks to the credit score system, which vets those that apply for cards. That alone is a buffer against fraud, unlike a debit card that just requires a bank account with the issuing bank to receive one.

If you’re not the sort to want a credit card — or you can’t get one because your credit isn’t good enough — you can simply go inside and pay for your fuel and avoid the hold altogether.

The Affordability Angle

When it comes to gas prices and affordability, the discussion usually centers on things like price per gallon or regional cost differences. The issue of debit card holds usually gets left out, but it shouldn’t. The main issue is that these holds can create short-term money issues for consumers with lower incomes who may not be able to be approved for a credit card and rely on debit cards for purchases.

First is the issue of the hold itself. For instance, a hold of $150 on someone who only has $180 in their account essentially makes gas inaccessible even if they technically have enough money for it. Sure, a person could go inside to pay, but that argument assumes a person has the time or the ability to even access a gas station attendant, which isn’t always the case.

The second issue is the duration of the hold. Depending on the gas station or a person’s financial institution, the amount of time it takes for these holds to clear and release varies. For instance, Wells Fargo says that the hold authorization will release “within three business days from the time of authorization or until the transaction is paid from your account.” This can create a problem for some if there are other transactions pending at the same time.

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What Consumers Can Do

If you’re wanting to avoid these holds and you use a debit card, the only ways to do so are to either pay for gas with cash, go inside and pay with the attendant if possible, or use a credit card (again, if you have the privilege of doing so). Other than that, the best thing you can do is to check your account so you can be aware of these holds and make sure you have the funds available to cover both the hold and the cost of the fuel you plan to get.

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