If you have ever used a debit card at a gas pump, you were probably slapped with a hold on the card, often for $50, whether or not you bought $50 worth of gas.
But Nick Lowry is tired of gas stations holding his hard earned money.
"(Gas stations) tell me it's not really a big issue," said Lowry. "But I told them it is a big issue to me. I don't think they have a right to take out more than I purchased."
He's talking about that debit card "pre-authorization hold" that stations have been doing for about a decade.
Gas stations place a hold on your debit card when you swipe it at the pump, to protect themselves. The hold can last for up to several hours. (Federal law now prohibits a hold from lasting more than a day).
Each hold can range from $50 to $125, according to the National Association of Convenience Stores.
Lowry says it has several times prevented him from buying some much-needed essentials. Other people have reported bouncing their account, not knowing that $75 in it was locked and unavailable to use.
"If you have a certain budget you spend every day, and if that runs out, you can't get nothing till the next day" he said. "Yeah, it can mess you up."
Almost all gas stations started doing this a few years ago when prices spiked to $4. Some people would fill up on an almost empty debit card that had just $10 in the account and drover off with free gas.
Holds protect the gas stations and make sure you have enough money for a full tank of gas.
There has been a lot of debate over who is actually holding onto your money: the gas station or your bank. The Association of Convenience Stores explained to the Cleveland Plain Dealer in an investigation last year that the gas station decides on the amount, but it's your bank actually locking up the funds.
Lowry says there should be a better way in today's high tech society.
"There's no excuse why they can’t pinpoint that out in advance and see if there's enough money on the card when they put it in the machine. They should not have to hold an extra dime," he said.
So what are your options if you don't like this?
To avoid holds, here's what banks say you can do:
- Pay with cash
- Pay with a credit card
- Or, before you fill up, present your debit card in the store where you can enter a PIN and avoid the hold.
By the way, credit card users are not immune to this. They may find a one dollar charge on their account for a few hours. That's the gas station's way of testing your credit card and making sure it is valid.
So don't be alarmed by that, and don't waste your money.
