Credit card holds are common, with hotels ensuring you have enough money to cover not just the room rate but incidentals you might charge to your room. Too many people have stayed and not paid their bills!
In fact, when Marriott first rolled out mobile check-in, they just checked whether a card was valid – and people were sticking in prepaid debit cards with $1 on them, and then leaving after their stay. This cost Marriott millions in reimbursements to hotel owners, because it was the design of their tech that was the problem.
However, guests often hate these hotels since they eat up available credit, or worse when it’s a debit card and real money in a bank account is held until the hold gets released. And that can take up to 15 days.
That happened A href=”https://wreg.com/news/local/teacher-shocked-by-bill-after-one-night-stay-at-ar-hotel/” target=_blank>here, in a very big way. In fact, this middle school teachers’ account showed a negative balance of more than $1 million when a $1,002,852.82 charge was placed on their debit card at an Americas Best Value Inn in Blytheville, Arkansas. The hotel says their credit card terminal was hacked.
“When I first got the call from my front desk staff telling me, ‘Hey, there’s an authorization for a million dollars,’ I genuinely thought either, one, they’re messing with me or, two, this is some kind of scam, because this has never happened at our location before,” Rahman said. “The maximum amount we can put on an authorization on our machine is $100,000. The amount in question was over a million dollars. So we physically could not possibly put that kind of authorization using our
system.”
Here’s the actual charge:
This is a pending authorization – but it was not rejected by the card issuer outright, though? An issuer should really flag a budget hotel authorizing over $1 million on a debit card for a one night stay and reject the transaction.
Visa’s rules say estimated authorizations have to be a genuine estimate, disclosed to the cardholder, and not just an arbitrary buffer, and also that a hotel can’t include potential damage, theft, or tips. The charge at this lower-end property was never going to reach $1 million!
Often hotels will run a hold and then a new charge for the same stay. The customer only gets charged once, but it eats up double the available credit. This guest could have wound up overdrawn by two million!
Hope that was in Indonesian, Chilean, or Japanese, and not USD…
Seems about right for SkyPesos, though (@D Fray, just for you!)
Maybe I’m just in a different financial bracket but do holds on credit cards really matter? There is a lot of credit and they drop off in a few days – no big deal.
Imgur.com is an antisemitic vile website, please don’t post links to them
@Retired Gambler: I have to disagree. If your credit card limit is a stingy $1,003,000.00, and you get slapped with a pending authorization of $1,002,852.82 at the illustrious Americas Best Value Inn in charming Blytheville, Arkansas, you’re left clinging to $148 of available credit for up to fifteen days. That’s barely enough to buy a single apple twist martini at the Olympia Steak & Seafood Restaurant—assuming you can resist the urge to tip extravagantly. Good luck convincing American or Delta to let you check your bag on credit; maybe offer them a coupon for free hugs instead.
@Joe — Pretty sure Imgur just lets anything on its site, so not necessarily intentionally antisemitic, but passively allowing users to create and share antisemitic content, like Facebook or X!
As a former payment facilitator, I have worked with the level 1 payment processors (TransFirst, GLobal Payments, etc.) and you would be surprised about the lack of controls on allowing large amounts on ACH transactions. The reason? They can always get the money back.
So it’s *approve* first, ask questions later, even though my client, who has NEVER had a transaction over $50k, let along $1 million, will still get transactions approved (because they have the money).
What’s more common is that all of a sudden, my client will have thousands of transactions happen in a short time period (say 24-48 hours). One would think this is unusual? Maybe have controls in place? NOPE. All approved.
The worse thing is trying to get the money back to from Interchange authorization fees. It’s (nearly) impossible.
So none of this surprises me.
-Jon
Perhaps they purchased the hotel lol. A reminder to use a credit card and not a debit card for protection which virtually everyone following this website has many
sounds like trump’s Musk run IT dept is hard at work fleecing the people trump hates.
Well, I pay cash for all of my martinis, so surely others can just pay cash if most of their available credit is on hold. In any case, make up just about everything I post.
@Marriott Marty A credit card would also be able to reserve all the available credit limit on a credit card. A million dollars authorization would certainly be denied on my cards though.
Do not ever use a debit card for ANYTHING except getting cash from an ATM. There are no protections. Credit card only, even one Gary shills on this site, and pay it off each month.
Moral of the story: Stick to cash. Avoid plastic.
Moral of the story: Don’t stay at sketchy hotels, If you can’t find one of the big brands. Just keep on drivin’.
“Moral of the story: Stick to cash. Avoid plastic.” And, how does one make a reservation when a card is required? Do they allow cash deposits for “incidentals”? Does she want to carry around that much cash?
It seems likely here she may have just one credit card, and it has a balance of $800+ on which is scheduled a $300 payment. So, she’s paying cc interest rates. And, to her credit, she didn’t want to place in on the cc, which, at minimum, exposes the hotel charges to interest. And, possibly, she’s one of those that must “force” oneself to be “good.” (Don’t use the credit card because I might not pay the extra off.) This might also explain the lack of another credit card she could have used for this. Yes, many of us can juggle multiple cards and never pay interest. It is not a skill that is universal. Good news is she has a funny story and no financial loss. I suspect getting them to realize $1 million isn’t legit is easier than $100.
My US bank debit cards have long had a liability limit of something like $50 or under for unauthorized charges. And US bank/brokerage debit cards seem to have a higher likelihood to get blocked for transactions than credit card transactions.
“Moral of the story: Don’t stay at sketchy hotels, If you can’t find one of the big brands. Just keep on drivin’.” It’s part of Sonesta, the 8th largest US chain in terms of properties. That particular hotel is ranked by Google users on par or better than the nearby hotels at that price point.