Understanding Gas Station Card Fees and Holds

MANY drivers have encountered unexpected charges when paying for gas with their debit or credit cards at the pump. In this article, we will explore the reasons behind these charges, how temporary preauthorizations work, and provide tips to avoid unnecessary fees. Whether you're a frequent gas station user or someone new to the process, understanding these aspects will help you save money and avoid confusion.

Why Are Card Fees Charged at Gas Stations?

In almost all instances, either the card issuing company or the company which supplies the card reader, or both, charge the gas station a set amount for the month and a transaction fee for each time a card is used. Gas stations have the right to add a surcharge to these fees, which come directly from their profits. Selling gas is often a slim margin business, making these fees necessary to maintain operations.

Temporary Preauthorization Explained

When you pay for gas with a debit or credit card, a temporary preauthorization is placed on your account to ensure the card is valid. This is not a final charge but a hold on your funds. Once you have pumped the correct amount of gas, the preauthorization amount typically drops off your account within a day or two. However, some stations require a minimum preauthorization amount, often around $75 or $100. This helps prevent disputes and ensures your account has sufficient funds.

Tips to Avoid Surcharges and Hold Amounts

If you opt to use a debit card, it is usually best to use a credit card instead or go inside the gas station to ask for a lower preauthorization amount. For example, if you only need to purchase $12 worth of gas, asking for a $20 preauthorization and only using $12 will result in a lower hold on your account. Always print and keep your gas receipts to track the charges and ensure accuracy. By staying informed and proactive, you can minimize unexpected fees and charges.

Common Misconceptions and What's Behind Hotel-Type Charges

These charges, much like hotel stays, are known as authorization holds. These are temporary charges pending by your card issuer, which determine the amount held until the final charge is made. Some card issuers may not charge any authorization hold amount at all. It's important to understand that these holds are temporary and will eventually drop off your account, usually within a day or two.

Conclusion

The next time you pay for gas, keep in mind the fees and holds associated with debit and credit cards. By understanding the process and avoiding unnecessary surcharges, you can save money and avoid confusion with your bank account.