Money taken from petrol pump transaction

[CeeJay]

I have been told that if one uses a petrol pump out of hours and a credit or debit card is used that the available credit when shown will be taken from the card immediately. It is only when the actual transaction is completed that the actual amount taken will be debited from the account. In the interim the original amount available will be taken from the account thus giving the card operator a possible bonus into their account. Is this true?

[sid]

I don't understand this. What is the available credit of a debit card?

Sid

[Clarkkent]

 

I've read your message again and deleted my earlier response. You think that because you input your credit card details before operating the pump the credit card company makes itself available to commit the whole of your credit limit. Apart from anything else, why should it do this when there is a limit (say £60) to the amount of fuel the pump will deliver?

Since your credit limit isn't money that actually exists, how could it possibly be used for some other purpose?

[Chancer]

You are not wrong.

The same procedure occurs when you hire a vehicle, its called pré-autorisation, in the case of a petrol pump €69 (usually) is pre-authorised against your card be it credit or debit, when the final transaction of say €50 of fuel is debitted the pre-authorised amount is cancelled, it does not as you say appear on your statement as no money (the €69) was taken, only reserved if you like for a short period.

One needs to be specially aware whe using a debit card, which has a finite balance (not the huge amount of credit that most credit card providers force us with) to hire a vehicle especially on holiday. I got bit in the bum by this when I hired a fourgon from Intermarché for the afternoon. The card was pre-authorised for IIRC €1500 which was just about all my remaining balance, it meant that I wasnt able to top off the tank as required on its return, in this case I was not able to access my own money for another 2 days.

Editted. To answer your original question, Intermarché did not profit from my €1500 resting in my Nationwide account (it was a flex account debit card) but I ws unable to access it for 48 hours, I even checked my balance on line and it had something like balance £1525, available balance £35 - I cant be ar5ed to do the currency conversion at the rate of that day but I am sure you get my drift.

 

[Daft Doctor]

I too recently had an experience like this.  I was returning from France to Geneva Airport (Swiss side) and usually fill up my hire car just over the Swiss border (as it is much cheaper).  I wasn't sure I could make the journey into Switzerland, so I put just 16 euros worth in the the tank in France, using my Nationwide debit card to pay.  I had approx £200 in the account, so first transaction was fine.  When I got to my favourite Swiss petrol station I filled up with approx 50 CHF worth and thought it would be no problem.  My debit card was rejected however, and I paid with credit card (charges and c**p exchange rate).  Even though I'd only spent a total of approx £50 on the 2 transactions against a balance of £200, when I had fuelled in france they had pre-charged my card to the tune of £105.  Although they don't actually take the money, the funds are reserved so aren't technically available to you until the entire transaction clears.  When I had then visited the Swiss petrol station, they had clearly tried to do a similar thing, i.e. £35 for the fuel and £?? pre-charge.  the reserved funds had gone over the £200 limit, so the card was rejected. 

The good news was that I was able to use my Smartphone in Geneva Airport to check my Nationwide account balance, then do a fastpay transfer to it from my Lloyds account to instantly refresh my available funds.  I could therefore still do my duty free shopping with the debit card, with no problems and no nasty charges.  I think petrol stations and hotels do this as well as car hire firms, so its as well to be aware it might happen.

[Clarkkent]

So transactions are not dealt with in real time?

Well, you live and learn. Thank you, Ceejay, for such an interesting excursion into consumer finance.

[Jako]

This procedure is the same in all countries in Europe, even in the UK. But generally you don't notice this as the procedure is completed before you check your account.

[CeeJay]

I must admit I was a bit sceptical about this when I heard it, and I apologise if I didn't make myself understood in the posting.

However Chancer has hit the nail on the head and explained it in language even I can understand! It is food for thought though especially if your limit is near the knuckle.

Thanks to all the replies.

[Chancer]

I have since asked for and got a fairly large overdraft on my flex account, normally I would never go overdrawn but neither would I have €2k in my account to cover the pré-autorisation for another van hire for example.

In his day and age there are lots of sensible people who manage their affairs without ever going overdrawn and do not want to have credit cards, some of these must have been caught out when say holidaying with the family in Florida and hiring a car for a couple of days, a truly frightening situation.