One of the most common complaints I hear is from debit card users who have bounced a check because a hotel or rental car company has “held back” funds in excess of the exact purchase amount. This can cause you to bounce checks because those funds are not accessible. This is one of the downsides of using debit cards in lieu of credit cards that not many people are aware of.

When you use your debit card at some outdoor gas station terminals, the gas station also typically holds back a larger amount for several days while the transaction settles. There is a gas station near my house that holds $120 every time I fill up my car, albeit on a credit card. My car usually takes $40 to fill up. If I were using a debit card, I would most certainly bounce checks because I don’t keep a lot of money in my checking account (after all, it doesn’t earn any interest there).

The fact that some merchants do this isn’t what irritates people. It’s the fact that they are not overt in their disclosure that they do this. If you knew, perhaps you’d use a credit card instead of a debit card. If you knew, perhaps you would transfer money into the account to ensure a sufficient amount to cover outstanding checks. My guess is you simply didn’t know because your banking institution doesn’t normally tell you.

Imagine how pleased I was to see this sign at the front desk of a Crown Plaza hotel in Irvine, CA. And this wasn’t hidden to the side behind the flowers. It was smack dab in the middle of the front desk for all to see. Kudos to you, Crown Plaza. You might have saved someone a $35 bounced check fee. I’ll be back again because of your standard of care in this matter.

John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.

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