If you use a DEBIT card to pump gas, and you are not asked to enter your PIN, then the moment you swipe your card, $50 or so is “frozen” from your bank account in order to pay for whatever amount of gas you eventually pump there.
Here’s the catch: Even if you only pump say, $20… the remaining $30 that was temporarily being held is not immediately available to you!
It’s true. It’s called debit card blocking.
It happened to my friend the other day. And it showed up clear as day on the Bounced Check notice she received from her bank.
The Result: Bounced Check Fees!
While she knew she only had about $40 in her bank account at the time, she couldn’t understand why 3 small debits from her account (each under $5) had caused her to go over her current balance.
Alas, there in the itemized charges to her account appeared a debit of $50… followed by a credit of $45 several hours later. The times coincided with the time she was using her debit card to pump $5 worth of gas.
Here’s the rub: Before the $45 was credited back to her account, she had since made 2 other small debits (each under $5).
In “real” dollars, she was okay and remained within her actual balance. But in “hold” dollars, she was overdrawn.
This type of debit card blocking is a practice also utilized by some car rental agencies and hotels.
The worst part: There’s never a sign anywhere telling you that this is happening.
Other Little-Known Facts About Debit Cards
1. Your debit card provides direct access to your bank account. For that reason, if your debit card is stolen (or otherwise misused, such as in an online transaction) you have less protection than if your credit card is stolen or misused. Here’s what you need to know.
2. Each time you use your debit card like a credit card (where you provide a signature for your purchase, but do not enter your debit card’s PIN number) the bank charges a hefty fee from the merchant. Which might also explain why companies like WalMart refused to accept debit cards a few years ago.
3. When using your debit card as a credit card (signature vs PIN number), the transaction will post to your account in a matter of days. However, when using your debit card as a debit card (entering your PIN number), the transaction posts to your account in a matter of minutes.
Must read: 7 Places You Should Never Use A Debit Card!
Gas stations are now posting signs to inform their customers that banks are likely to charge their debit card and that it is beyond control of the gas station owners.