Sunday, October 29, 2023

Bizarre credit card manners

During our last trip in France and Switzerland, I made a daily note of all the transactions incurred each time I paid with my credit card in order to see how it was translated from Euros or Swiss Francs to Dollar. 

That way, when I'd reconcile my monthly statement, it would make my job super easy. This said, the first time we filled up our rental car in France, we noticed an extra charge of some $160 in addition to my gasoline purchase. 

That night, I was alarmed when I saw it and contacted my credit card to dispute the charge. In the process, the Visa card in question was instantly canceled (a very bad knee-jerk idea) and I had to use my wife’s instead where merchants didn’t take my American Express card. 

As this kept on recurring, I assumed it was a systematic policy service stations used to cover themselves. When I got home, I did some research that confirmed my assumption: The additional charge I was seeing on my daily credit card statement at gas stations was a "preauthorization" or "authorization hold." 

In fact a common practice in the payment industry, particularly at gas stations, hotels, and other places when I had in the past noticed a temporary token $1.00 charge. The purpose of such preauthorization, 

I learned, was to ensure that you have sufficient funds available to cover any potential costs that may arise during a transaction. Gas stations usually preauthorize an amount higher than the actual cost of the fuel you purchased, as they don't know. 

I don’t know if it’s the same in the United States since I don’t use a car with ICE engine anymore...

No comments: