Dear Consumer Ed:

Last week I used my debit card to pay for $35 worth of gas.  The next day when I went to buy groceries, my card was declined.  I called my bank and discovered that the gas station had placed a $100 “hold” on my account, reducing my account balance to nearly zero.  Are they allowed to do that?

Consumer Ed says:

Yes—at least for now.  Although it seems unfair, gas companies justify this to make sure they are paid when consumers take advantage of pump-based debit card transactions, which usually do not require a PIN number and often take days to process.

What likely happened was when you swiped your debit card at the gas pump, the transaction verified that you had money in your account but could not predict how much money you would need to pay for the gas that you were about to pump.  This unknown is why the debit card swipe automatically placed a $100 hold on your account—which prevented you from buying groceries the next day.  This hold lasted so long because such non-PIN number transactions often take days to process.

Here are some ways you can protect yourself:

  • If you must use a debit card, pay inside where the cashier can verify the amount of your purchase and thus allow a PIN number transaction—which processes immediately and does not result in an unfair hold on your account.
  • If you pay at the pump, use a credit card.  Although gas companies also place holds on credit card limits, such limits do not usually prevent access to your credit line.
  • Pay with an oil company credit card because most oil companies do not place holds on their customers’ credit card limits.
  • Pay with cash.  This may save you money because some gas stations give discounts if you pay with cash.


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