Who’s Holding Your Money?


We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Monday, May 19th, 2008

These days, we’re all trying to make every dollar stretch a little farther. But it doesn’t help when debit holds freeze access to your money for a few days. What’s worse –when you get hit with overdraft fees or NSF (insufficient funds) fees because of debit holds.

Here’s an example of how a debit hold can cause havoc with your finances:
You check your balance on-line and see you have $100 in your checking account. You stop at the gas station, and swipe your debit card at the pump to pay for a $40 tank of gas. With $60 left in your account, you pay for $55 in groceries later in the day with that same debit card.

No problem? Wrong. Because you paid with a debit card at the gas pump, the gas station may have put a $75 “freeze” on your checking funds to pre-authorize your gas purchase. That freeze doesn’t immediately disappear – it can lock up your money for up to three business days.
Meanwhile, you now may be hit with a $35 overdraft fee for those groceries and any other purchases you made on insufficient funds. Recently, federal regulators have proposed putting an end to such overdraft practices. You shouldn’t be hit up with overdraft fees or insufficient funds because of a debit hold. After all, the money is still yours. And, banks shouldn’t allow you to overdraft funds unless you opt-in, or ask, for overdraft protection.

You can let the Feds know how you feel about overdraft practices by visiting www.CreditCardReform.org. Real people’s experiences with the banks and credit card companies prompted The Federal Reserve Board to propose tougher rules. Writing to them now will make sure they happen.

We’d also like to know about your experience paying with your debit card at the pump. Our quick survey will better inform us on how common this practice is. The more we can put the pressure on regulators and lawmakers to give consumers a break, the more good news for our wallets and pocketbooks this summer. After all, it doesn’t look like gas prices will be coming down anytime soon.

4 responses to “Who’s Holding Your Money?”

  1. K says:


    Go to your bank and opt out of overdraft charges from your card purchases, and then only use your card to pay for purchases and bills. Do not use checks or do ach transactions, or use your routing and account information to make your payments. Use your card only and be sure to opt out of overdrafts for the account so that the card will not overdraw you or allow you to exceed your account balance. This will avoid fees on your account. It will not prevent gas stations from holding funds on your card, however, if you pay inside after you pump, you should be able to avoid these holds.

  2. The gas station held 95.00 which I only sent 30.00 and created a over draft fee. How can they get away with holding my money? I only gave them permission to take the 30.00 for gas. They don’t tell you or even put a sign up to let you know. Believe me I would of went to another gas station. Please advise on how to stop this rip off from the consumer.

  3. K says:

    You did notice that the gas station is the one that put the hold on your account right? They do not earn interest on this money though FYI.

  4. Zae Smith says:

    I had made a $10 perches at a convince store and they held out $99.15 on my debit card. I will not be able to receive it back until Tuesday due to the banks are all closed due to Martin Luther Kings day! This makes me so angry and do to them doing this. I will never use mu debit card again for purchases. They are making interest off my money and it is so wrong! Sincerely Angry

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