Understanding Pending Credit Card Transactions
What are Pending Transactions on a Credit Card?
When you make a purchase using your credit card, you shouldn't be surprised if the transaction doesn't immediately reflect on your account statement. Instead, it typically appears at the top of your online transaction history as a "pending transaction." It's important to note that pending transactions are a common and temporary aspect of credit card purchases. These charges will eventually be fully processed by the merchant and your credit card issuer, and they will then appear on your statement.
Deciphering Pending Transactions
A pending transaction is essentially a purchase or pre-authorization that has been approved by your credit card company but is still awaiting processing by the merchant. In other words, it signifies that the merchant has verified with your credit card issuer that you have sufficient available credit on your account to cover the charge. While the pending amount might temporarily reduce your available credit limit, it's not a final charge. As a result, pending transactions do not accrue interest, and they are not included in your credit card's current balance until they are finalized.
How Long Does It Take for Pending Credit Card Transactions to Clear?
The time it takes for pending credit card transactions to clear can vary. In most cases, the vast majority of credit card transactions are resolved within five days. However, it's essential to consider that two parties are involved in any pending transaction: the merchant and the credit card issuer. The processing time on each side of the transaction affects the overall duration it takes for a pending transaction on a credit card to clear.
Typical Processing Times by Issuer
On the issuer's side of the transaction, each credit card company operates on its timeline for finalizing pending transactions on your account. Here's a brief overview of the typical timelines provided by major credit card issuers. Keep in mind that issuers can only address the side of the transaction they control, so occasional delays in approval on the merchant's side can extend this timeline.
Pending Transactions vs. Holds
While most pending transactions are typically resolved within five business days, credit card holds are an exception to this rule. Sometimes referred to as pre-authorizations, credit card holds allow merchants to reserve a specific amount of funds on your credit card in advance of a substantial purchase. These holds are frequently used by entities such as hotels, rental car companies, and other businesses that require assurance of available funds before providing a significant product or service to a customer.
Unlike standard pending transactions, credit card holds can persist for an extended period, contingent on the merchant and the nature of the purchase. For instance, if you rent a car for seven days, the rental car company may place a hold on your card for the entire duration of your rental, plus an additional day or two.
Resolving Pending Transaction Issues
If you suspect a problem with a pending transaction on your credit card, your initial step should be to contact the merchant directly. They may have the ability to cancel or refund the transaction, as well as answer any inquiries you may have concerning the charge.
In cases where the merchant is unresponsive or fails to resolve the issue to your satisfaction, you can initiate a dispute with your credit card issuer. It's worth noting that you have a 60-day window to dispute any transaction on your credit card. Therefore, there's no need to panic if you cannot fully resolve the issue while the transaction is still pending.