A Frightening Prepaid Card Experience on Halloween

So you’ve loaded money on your new prepaid debit card for some Halloween fun this weekend. After booking your airline ticket with your card, you pack your bags with your costume and are ready to go. After getting off of the plane you stop by your favorite rental car counter and book a mid-size vehicle using your prepaid card. You load your bags and take a leisurely drive around then decide to check in to the hotel. You exchange pleasantries with the clerk and hand him your prepaid card. Everything is going quite smoothly.

The weekend goes by rather quickly as you connect with some of your friends, do some shopping and take in the sights. Caught up in the excitement of the weekend and enjoying all the compliments on how good you look in your costume, you start to lose track of how much money you have spent. You start thinking to yourself that the expensive meal at the restaurant and the new outfit might have put a sizable dent in your available funds. As the weekend continues, you do the math and your receipts confirm that you are still under budget. There is still some time left and a few more things you want to accomplish before you leave, like getting that special souvenir for mom. You fill up the rental car and hit the streets once again. While gift hunting with a couple of your friends, you decide to spring for lunch at a popular diner. To your surprise, the waiter returns to the table explaining that your card cannot be accepted. You are completely embarrassed as your friends end up covering the meal. You did the math…what happened?

What you didn’t count on was what is called Authorization Hold. To avoid this very frightening experience, there are four places that you have to be extremely careful when using a prepaid card:

  • Hotels
  • Rental Car Companies
  • Restaurants
  • Gas Stations

These four places tend to place a hold on funds in excess of the actual bill to make sure they get paid in entirety upon your departure. For example, you might buy a movie in the hotel room, drive extra mileage in the rental car or leave a tip in a restaurant. When you swipe at the pump, the gas station may post a transaction and hold back $75 when you only put $35 in the gas tank. As with hotels, rental cars and restaurants, the actual amount will be reflected a few days later and the Authorization Hold will “fall off”. If you are a person that likes to live on the edge near your budget line, you really might want to limit these types of transactions.

Tracy Jones is a content contributor for GetDebit.com, which serves as a resource for prepaid products, including the mPower Visa Prepaid Card.

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