What You Should Kow About Credit Card Blocking

Credit card blocking is one of those annoying little facts of life that only serves to disrupt our finances. Unfortunately, there isn't much that can be done about it unless you decide never to make purchases for which your credit card might potentially be blocked. Usually, a company will block your credit card for an estimated amount of your final payment for goods or services. It is especially common whenever you rent something, such as a car or a hotel room.

Why is Credit Card Blocking Used?
Credit card blocking is a way for merchants to ensure that they will be paid. Since credit cards have credit limits, you could easily use your credit card to rent a car and then make sufficient purchases to reach your credit limit. Then, when the car rental company runs your card for the final bill, it will be denied and they may not be paid for your rental.

Is Credit Card Blocking Legal?
Absolutely. As long as the amount of the block is comparable to the estimated actual charges, it is perfectly legal.

How Does the Company Decide How Much to Block?
Credit card blocking is used as a way to safeguard the estimated funds it will cost for the goods or services. For example, let's say that you've rented a car for three days at a rate of $59 per day. The rental car company might then charge your credit card for $177, which is the amount of a three-day rental. Your final charges may be more or less than the amount blocked on your credit card (i.e. if you turn the car in early or if you go over the alotted miles), but the credit card blocking allows the company to ensure that they will be paid at least a close estimate of what they should be paid.

When Will a Credit Card Block be Removed?
In most cases, the credit card block will be removed from your account right after the final payment is assessed (usually within 48 hours). Sometimes the two charges will overlap, and you will be charged an overlimit fee by the bank if the blocked charge and the final payment exceed your credit limit, so make sure to use a card that has sufficient available credit. If the charge isn't removed for any reason, you should contact both the merchant and your bank to get the situation resolved as quickly as possible.

How Will I Know if a Company Uses Credit Card Blocking?
The best thing to do is to ask. When you hand over your credit card to make a reservation or purchase, simply inquire about credit card blocking policies. The company is required to let you know if an estimated charge will be blocked on your card. You can also ask them how long the charge will remain on your card.

How Can I Prevent Overlimit Fees with Credit Card Blocking?
If you are concerned about exceeding your credit limit because of credit card blocking, it might be best to use more than one card. Save one card (the one with the lower limit) for smaller purchases that you make while traveling, for example, and use the card with the higher limit for reservations or purchases that might incur credit card blocking charges.

Source: Associated Content

Prepaid Traveler's Card Vs. Debit Card

You may not be aware of it, but the days of Traveler's checks are almost a thing of the past. Many merchants around the world have decided that it's better to be safe than sorry and they are refusing to accept the old style paper traveler's checks. There has been an increase in counterfeiting of the paper documents and this has led to an alternative method for vacation spending. The newest product? Visa TravelMoney.

Basically, it is a prepaid Debit Card. You purchase this card with any amount between $250 and $9999. The cost is around $9.95 which is a good buy if you want the large amount, not so good if you only need the small amount! The old style traveler's checks typically cost $1 for every $100 worth you bought. So $300 worth of traveler's checks would have cost $3 while $9000 would have cost $90!

Many consumers' first question "Is this any different than using my debit card?" Not a lot. Both should be accepted anywhere they take MasterCard or Visa. Both are pulling from funds that you already have established. Both are very convenient. The advantage that the traveler's card has is the quick replacement if it is lost or stolen. However, the travel cards are new enough that not all locations have converted to them so you might be given paper checks as your replacement funds. Hmm... do you think that you'll be able to use them?

If your debit card is lost or stolen, a quick call to your financial institution should stop any chance of fraudulent activity. But, the chances of getting a replacement card while you are still on vacation - very slim! Your bank may agree to wire money to you at whatever destination you are located - for a fee, of course. So, you shouldn't be stranded without any money.

Another advantage to the TravelMoney card is safety. Some consumers like the fact that this card is not tied to their checking account. They feel more comfortable using this card for Internet purchases than the regular debit card.

But be sure to watch out for extra fees. They seem to get you coming and going. ATM fees if you access your card via an automated teller machine. Balance inquiries at an ATM, even though you may obtain balance information for free on the internet. If you request a statement, there is a fee for that as well. If you run out of money and want to reload your card - you guessed it! Another fee.

Sounds like it might be easier just to stay home! Who's up for popcorn and a movie?

Source: Associated Content

Which Credit Card to Carry?

I used to carry tons of credit cards with me. It seemed just appropriate that I may need them some time. After all shouldn't I be carrying all my credit cards?

The intelligent answer is 'no'. I see people with wallets bursting at the seams with credit cards lined up one after another. At one time it used to be a 'prestige' thing to show how many credit cards you had. You could flash your wallet and show a string of credit cards lined up one after another. Those days are gone. There is no need to flash your credit cards. Instead, with identity theft rampant you are better off not showing your credit cards.

Identity theft also poses a BIG problem if you carry several cards. Not only the thieves get several cards but you have that much more work to try and identify each card. You have multiplied your work because you have to now contact each company. This can take hours because these days you have to go through a maze of telephone prompts before you can ever get to a human. They say on the average identity theft eats up 600 man hours of time.

Another major issue is at the store. When you get to the counter to pay, you are confused which credit card to use. You can never keep track of which one is most beneficial, like rewards, low interest etc. In the rush of the purchase, you go with whatever credit card at whim. This can be injurious to your financial health. You may have just charged on a credit card that has the highest interest rate or the worst customer service.

Credit card companies want you to charge on several credit cards because your chances of not paying on time increases and that is when they make their money. Once you fall into the trap of not paying on time, the credit card companies are vicious in their fees and interest rates. Essentially, they have got you!

So what is the solution? Just carry 2 cards. One for personal expense and one for business related. Do not carry more than 2 credit cards. If a better card comes along, replace one in your wallet. Your wallet will be happy and you will know exactly which credit card to use. In case your wallet gets lost or stolen, you have only 2 credit cards to report. You can also catch identity theft very quickly because you have only 2 cards to watch.

Look at a comparison table of the best cards available for personal and business use at Lookupcreditcards.com. Just get 2 cards and stick with them till a better deal comes along.

Source: Associated Content