What Are Pending Charges on a Credit Card?

Pending charges, sometimes referred to by the majority of financial institutions as "holds," are part of a financial institution's charge process. You may see pending charges on your monthly statement, or as part of your online account information and be a bit unsure as to what they are exactly. However, understanding pending charges can help you avoid unexpected surprises when you go to swipe your card.

A pending charge has been authorized by the credit card issuer, but the final amount has not yet posted to your account. This can occur when a merchant requests authorization but is uncertain of the final amount that will actually be charged. Even specific amounts, such as those paid at stores, can show as pending until the bank processes them.

Sometimes you'll see two charges for the same transaction. A pending charge may appear for the authorized amount and a second charge may show for the actual total amount due. Once the bank processes the transaction, the pending charge will disappear.

These charges often appear if you use your card to pay for gas or a hotel. In these cases, the merchant puts a "hold" on the card to make sure there's enough credit to cover the expense. For example, if you use your card to pay for gas at the pump, it isn't known yet exactly how much fuel you will purchase at the time you swipe your card. So, in this instance, a hold is placed on your card for a specific amount, which can vary. Once the final amount of fuel you purchased has been determined, your bank will then process the charge for that exact amount.

You also may see pending credit card charges if you use your credit card at night or on the weekend when the bank cannot process your transactions. For instance, a bank might have a policy that transactions will be processed the following night if you use the card after 8:30 p.m. Another reason a pending charge may appear is because the merchant with whom you used your card has not yet processed the transaction on their end, so the bank can't do anything until they finish.

A pending charge reduces your available credit by the amount showing for that line item. The same thing happens if you use a debit card as a credit card, in that your available balance is reduced. If you book a one-night stay at a hotel, the hotel may put a hold of $100 on your credit or debit card. While the front desk may tell you they aren't charging your account, your credit or debit card balance availability is affected as if it was an actual charge.

For example, if your credit card has a limit of $500 or you have $500 in the bank account tied to your debit card, and $100 is listed as pending, you only have $400 in available credit or funds, assuming you do not have other charges that detract from your limit.