I usually check my credit-card accounts online regularly, to keep on top of spending and to help spot any unauthorized purchases. Recently I noticed something odd I hadn’t seen before — a series of $1 charges, from the convenience store where I usually gas up my car.
I always use a credit card, rather than a debit card, when paying at the pump for gas. (That helps avoid the potential damage from “skimming,” in which crooks try to steal card numbers with illegal readers. Consumer protections typically are greater with credit cards than with debit cards in such situations, according to the Privacy Rights Clearinghouse). But I was perplexed as to why I was being charged an extra dollar for filling my tank.
Each charge for a fill-up had a corresponding $1 fee added, for a total of $3. Not exactly budget-breaking, but who likes paying extra fees, when gas is already pricey?
When I contacted the bank that issued my MasterCard, a representative named “Sophie” explained during an online chat that the apparent charges were not charges at all, but temporary preauthorizations done before charging the entire amount. Some merchants, like gas stations and hotels, do this routinely, as a way to verify that the card is active before authorizing the total amount, she said. “The amount of $1 is authorized so that the card can be checked without placing a large hold on the customer’s account,” she said, adding, “This $1 will drop off the account automatically.”
I called MasterCard for more details. A spokesman, Seth Eisen, said that when consumers use both credit and debit cards to pay, there are some instances — such as when a customer pays for gas at the pump — when the final amount of the transaction is not known right away. So it is standard practice for the merchant to get a $1 authorization from the user.
“The issuer does not know when the card is initially swiped how much gas will be pumped, or what the final transaction amount will be,” he said. The card issuer — the bank that issued the card to the customer — will not know this until the completed transaction is submitted to MasterCard by the merchant’s own bank, and then subsequently sent back to the issuer. “It’s at this point that the final purchase amount is placed on the cardholder account and the $1 hold is removed from the account,” he said.
Sure enough, when I checked my official credit-card statement for the month, there were no $1 charges to be found.
Have you noticed “authorization holds” on your card account?
A version of this article appeared in print on 07/06/2013, on page B4 of the NewYork edition with the headline: $1 Mysteries
On Credit.
Article source: http://bucks.blogs.nytimes.com/2013/07/03/why-you-can-ignore-those-odd-1-credit-card-charges/?partner=rss&emc=rss