Hosed at the gas pump -- by your debit card
You may have topped off with just $20 worth of unleaded, but the debit-card transaction could freeze as much as $75 in your account, sometimes for days.
By Christopher Solomon
If you ever use your debit card to pay at the pump, watch out: Did you know that every time you top off the tank, a chunk of your checking account can be blocked -- sometimes for days, with the potential to cause you all sorts of financial headaches and bounced checks?
That’s what happened to Jessica Hathaway, a state employee from Allentown, Pa. Earlier this year Hathaway stopped during her commute to fill up her car at Rauch’s Mini Mart, a Shell station. She bought $22.29 worth of gas using her debit card.
The next day Hathaway balanced her checkbook using her bank’s telephone service -- and something didn’t add up. The bank said that she’d made two purchases the previous morning: one for the $22.29 and one for $75.
Trouble is, she’d only bought the gas.
Finally Hathaway called the service station, and an attendant explained to her what few people know.
How your money gets frozen
If you use your debit card at a pump that does not require a PIN, the station regularly will block out an amount -- often $50 or $75 -- on your card.
That amount doesn't “un-block” as you drive away. Instead, the hold remains until that evening, and sometimes for up to several days, until the station does a “batch” transaction, according to the U.S. Public Interest Research Group.
Each big oil company has a different policy:
* Shell places a $75 hold for gas purchases, and it can stay in place for as long as three business days.
* British Petroleum places a $75 hold on accounts when customers use debit or credit cards, but the hold is usually lifted after about two hours, said spokeswoman Sarah Howell. The same policy applies at its Amoco and Arco stations, Howell said.
* Chevron applies only a $1 hold to debit cards, to ensure that a card is active, says a spokeswoman.
The reasoning behind this policy is that oil companies don’t know how much gas you’re about to pump -- only PIN-based debit transactions are processed immediately -- and so they earmark a certain amount of your money. “We want to make sure that we’re protected, that we get payment for the gasoline,” says BP’s Howell.
This general idea isn’t new. Credit-card companies have done it for a long time. (Think of when you rent a hotel room or a car, and the attendant runs your card upon your arrival to ensure you can pay for it.) It’s less of an issue with credit-card owners, however, because you’re usually told that it’s happening and you’re probably not flirting with your credit limits.
If a company puts a chunk of dough in your checking account off-limits without your knowledge, however, it can cause real migraines.
