Beware using your debit card at the gas pump

[RedRider]

I am surprised at the CCC (Credit Card Companies) cancelling cards that get paid off. I could understand it if it was a card that wasn't used and had zero balance, but not one with a usage history.

 

They make a majority of their money by getting a percentage of the dollars charged. In other words, when you buy gas on credit - let's say $100 to make the math easy - the CCC gets 5% or $5 for handling the trasaction. This comes out of the gas station revenue.

 

Now, when you use Debit, the CCC/Bank only gets 1% of the total spent.

 

The percentages may be off a bit (CCC may be 4% or 6%), but there is a significant difference.

 

This is also why many places do not accept American Express. They charge a higher percentage than Visa/Mastercard.

 

RR

[ediddy]

If you use a credit card at a gas pump it puts a hold for anywhere from $50.00 to $100.00. Within 24 hours the actual amount is supposed to be posted and the balance is put back on your credit limit. On my trip to MD I used a credit card for gas several times. When I checked in a motel on my way back my card was declined. I was keeping up with the balance and knew I had plenty of credit to pay the room. When I got home I looked at my balance and there was plenty of credit for the room so I called the credit card company. They said when you fill up using a credit card they automatically block a $50.00 to $100.00 charge to your credit limit. Within 24 hours the actual charge is posted and the balance of the amount blocked out is credited back to your limit.

[Dragonslayer]

Our Engineering Lab Manager just sent the guys in the lab an e-mail where he had filled up with gas and used his debit card. When he checked his bank account balance the next morning, he had a $75 hold for that purchase. He called his bank and they told him that alot of gas stations are now doing this for purchases at the pump. One of the guys in the lab asked his wife that works at a bank and she said she is seeing a $100 hold for each purchase from the pump at some gas stations.

The last time I was on a big group ride with about 30 bikes and we stopped for gas, everyone did the "pay-at-pump" thing. If you were on a ride that had several fillups, you better make sure you have plenty of money in your checking account if you are going to pay at the pump. Otherwise those $10 purchases could end up being a lot more if the bank tags you for insuffient funds in your account because hundreds of dollars are on hold.

I called our local tv news program and they were not aware of this, but were very interested in what I had to say.

Also, the banks are not interesting in doing anything about this as they are making easy money from insuffient fund charges on each transaction involved.

It also appears that purchases paid for inside are charged only for the amount of the purchase.

RandyA

Very interesting, Who ever gave banks the right to steal money from us the way they do. I hate banks.If you ever knew the truth about the way they process transactions to incourage overdrafts and the fees they charge for overdrafts it would make you sick, Banks and Lawyers are licensed to steal and rob you everyway they can think of. And nine times out of ten there is not a damn thing you can do about it.

[pwortham]

I just buy prepaid gas cards with cash and have never had any problem. Also usually get a discount on gas prices. When one is empty I get another just make sure they come from behind the counter

 

Paul

[eazyduzzit]

I have read some crazy things in this thread. I have used my debit card for everything I buy for the last 10 years, and I check the balance online about once a day. I have never had over 1$ held for anything.

As far as giving people access to your checking account, you do the same if you write checks. The number at the bottom of your check is your checking account number. I love not having to carry hundreds of dollars in cash around all the time.

I guess I'm just different from most people.

[Cougar]

Ditto Jim.. Same here.. no problems EVER!

and NO More then a dollar over charge for

no more then 12 hours.

[Reaney in NH]

Ok... I will ad my 2 cents.

 

I use my Visa Debit card to buy gas all the time.I ALWAYS process as a Credit Card.. I do this to avoid having to use my PIN number. When I make a purchase.. My account shows a $1.00 hold... until the transaction goes thru... then I credit back Whatever was help. There has been several times the " HOLD" put me over ... but the bank has never charged me for it... as long as it worked out when the deal was done.

 

I rarely use cash to buy gas anymore... mostly because all gas is PREPAY... if I pay with cash I need to go in... give the attendent my cash... then pump my gas ... then go back inside to get whats left of my cash. To mach of hassle... Its much faster to pay at the pump.

 

I'm glad a run accross this thread... it reminds me to call the bank tp let them know I will be using my card alot this weekend.

[Little Bob]

For those that think by making it a credit they still will hold. I know from first hand. Coming home this past Januray from Miami stop in Fl, for gas they held $100, Georiga $90. By the time we got home we found that a total of over $400 was held.. When you swipe at the pump the station has nothing to do with that purchase. It is between you and the gas company. Took 4 calls and 10 days to get the money released.

:Venture:

[KarlS]

Another 2 cents worth. I've been going to the same gas station for years and when my accounts were at a bank I would get the $50.00 hold. The last 3 years I've been with a credit union and have never had a hold from that gas station or any other around the country. Maybe my credit union won't do the hold thing? Don't know why just glad there's no hold anymore.

[footsie]

According to the personel at my bank if the pump asks for your pin number the charge is instant and no extra money is held, I always use my debit and have never had a problem.

But I always try to go to a station I know will ask for pin number.

Will not go through the hassle of prepay inside.

Gregg

Edited June 25, 2009 by footsie
left out info

[dksmith196958]

yep that happend to wife & I last trip after two fill ups stoped to get cash And balance was way off she was hottt!!

[RoadKill]

I use my Debit Card for everything! I never have more than $5 in my pocket. When i buy gas I use it as Credit and have never seen the hold when viewing my account online. I have never had fraudulent charges on my debit card. However it has happened 4 times with my Credit Card as I use it for Hotels, online purchases and by paypal backup. Everytime however the Credit Card company called me to warn me as it was always mid cycle so it would have been a few weeks before I would have seen it.

 

So I guess it is what ever works for you, Me, Debit, Debit, Debit!!!!

[bongobobny]

You might as well get a credit card that pays back a 1% bonus, and use it for everything.

Only 1%??? My GM Card gives me 5%, my BJ's card gives me 2% for club purchases and 1% elsewhere, and my Discover Card used to give 5% on all gas purchases but now only 1 purchase per month, and a lot of times Citi gives more than 1% promotions on points. I agree with you but it IS a discipline to not overspend, and to pay them off in full every month...

[timgray]

Only 1%??? My GM Card gives me 5%, my BJ's card gives me 2% for club purchases and 1% elsewhere, and my Discover Card used to give 5% on all gas purchases but now only 1 purchase per month, and a lot of times Citi gives more than 1% promotions on points. I agree with you but it IS a discipline to not overspend, and to pay them off in full every month...

 

 

Take a realllly close look at your statements, Most credit card companies are doing a 15 day grace period now to try and get more money. if there are any finance charges, you are paying interest on that money that you got your 3%-5% cash back from which makes it a loss.

 

If there is one fact in life, it is that you never EVER trust a bank or a banker. They are starting to make the loan sharks look honest.

[spear]

Boy - talk about the land of the free and the land of opportunity.

It looks like the US banks are free to do what they like, whenever the opportunity arises.

Never heard of anything like that happening anywhere Down Under.

The again we didn't have any banks collapsing because of reckless home loans, or any auto manufacturers going bust and leaving thousands out of work or - - - - etc etc.

Gotta admit, eh Aussies?

There's no place like home!

[Venturous Randy]

Boy - talk about the land of the free and the land of opportunity.

It looks like the US banks are free to do what they like, whenever the opportunity arises.

Never heard of anything like that happening anywhere Down Under.

The again we didn't have any banks collapsing because of reckless home loans, or any auto manufacturers going bust and leaving thousands out of work or - - - - etc etc.

Gotta admit, eh Aussies?

There's no place like home!

 

Yeah, butt..... it is the 5th day of summer for us and the 5th day of winter for you!!!!!

NAH...NAH...HAHHHH!!!!

Sorry, that was mean, but it is true and at this time, it is about the only way we can deal with the crap going on here.

RandyA

[ediddy]

AtlantaDragonSlayer,

You are right. Banks and lawyers can steal and it is legal. When I first started my insurance agency I was always borrowing operating money. I would pay off a loan and then six months later I would need it again. Each time in addition to the interest the bank charged a $250.00 loan fee. One day my banker asked me if I could insure 6 rental houses the bank was foreclosing on. The commission I would make was approx $12.00 per house and I had to take a picture of each house to send to the insurance company so I charged the bank a $10.00 fee per house for taking a picture. When my banker got my invoice he called me and was irate. He said he had never heard of such. I said don't you charge me a $250.00 loan fee. He said yes but that is different. I asked, how is that different, my time is just as valuable as yours. He refused to pay the picture fee and I told him to just forget get it, but that I would never pay a loan fee again. I never went back to that bank. Isn't it interesting how they can rip you off but don't want you to charge them.

[Flyinfool]

That is like the deal where a bank can fold and you loose your savings except for the first 100K insured by the FDIC. But that same bank folding, none of your mortgage will disappear. Enough of the bank will remain intact to keep taking in your money, sell your loan make a huge profit and the customers are the only ones that loose.

 

I think I need to start a bank, I can then legally rip people off and make big bucks doing it.

Naa It wouldn't work, I'm to honest to make big money at anything.

[Sailor]

I use my debit card but I have a $10,000 overdraft protection on it which I got when I was building my house and just kept. It is prime plus 2%. I have never used it but it is there in case I do need it. I use my credit card sparingly and always pay it off before any interest is due. That is an interest free loan. They keep upping my limit even though I don't get anywhere near it. If I had to I would go into my overdraft to pay off the credit card. 6-8% on overdraft rather than 20-30% on credit card.

[FJR Rider]

I know this thread has been dead for a couple of days, but I wanted to share a little research I did yesterday and today.

 

First I contacted the company that owns the gas stations (RENEW) that I use for local fillups. The stations are "unattended" and accept only cash, debit cards, or credit cards at the pump. I figured if anyone knew about how debit and credit transactions are handled at gas stations they would because 99% of the business is via card transactions. I talked with one of the principles of the company (based here in Wisconsin)...he was very helpful and he provided the following information...I apologize as some of what he told me contradicts what some of you have said above...I'm only repeating what he said.

 

Regarding debit or credit transactions at the pump, it doesn't make a difference, both types have holds put on them. His pumps don't use a PIN pad, so their system (triple encrypted) looks to the account number. When the card is swiped the data passes to a third party clearing house who in turn passes the data to the bank or credit card company...the data then passes back through the third party clearing house and back to the pump. All of this takes typically takes 1 to 5 seconds. These gas stations are looking for $75 to the good and if there's at least $75 there it "pre-authorizes" the sale at $75 (i.e., the hold). If it doesn't see $75 to the good, the authorization fails and no sale is allowed. What he told me though is for his stations the $75 hold IS NOT in addition to what's purchased, it's the max. The customer won't typically know it as when the transfer of funds is authorized in the middle of the night by the FED, the $75 hold comes off and the actual amount is transferred from the bank via the FED to the company.

 

We went on to talk about how some other stations are doing things, and again he was very knowledgeable. Again though he repeated, at the pump it doesn't make a difference between debit or credit, if the station is doing a hold it will apply to either. Where he said some customers are really complaining (not his, but others) is some stations are doing the pre-authorization "hold" AND charging the amount of the sale. So if the hold is $75.00 and the actual sale is $25, then $100 goes on the account until it passes in the night...also some stations have a 24-48 hour delay for their debit/credit transactions which ties up the customers funds. He said this is typical of small chains or independent owners (who might have a national chain storefront) who don't want to or can't pay certain fees or upgrade to certain equipment.

 

We talked about PIN at the pump and his company does not plan on offering this, however he was knowledgeable regarding other company practices. He said that PIN at the pump for debit transactions should work as they do inside and typically when the PIN is used no hold would be applied. However I know this to not be true as my wife used PIN at the pump at another chain this weekend and a $100 hold was put on our debit card in addition to the $25 or so sale...NOT HAPPY!. He said PIN transactions are supposed to process right through as it's a direct line to your account, however as I noted this is not always true.

 

Before I forget...in the pre-authorization process, the card is recognized as a DEBIT or CREDIT via the account number. He said while some stations allow you run a debit card as a "credit" transaction, the end result is the same...a hold for the pre-authorization. The reason I mentioned this is this also explains why some pumps will simply reject a debit card when swiped.

 

The next topic we discussed was why some stations are no longer accepting debit cards at the pump. This is primarily due to security concerns and the fact the stations can't afford to install another level of encryption and/or security. By not accepting the pump they can get the customer to come inside to do the transaction...most will still take the debit card inside.

 

On this topic he went on to say that he'd be very surprised if any station and/or chain is refusing to take debit cards. Whereas most pay fees for credit card transactions, most in fact make money (up to 1%) on debit transactions...in other words they want your debit card business.

 

The last item....my son-in-law is a banker; he's a branch manager for one of the nation's largest banks. He did some research for me as well and it's not the banks doing the holds, it's the stations/national chains doing it. Other than complaining on the customers' behalf, it's not in the banking industry's control. Sorry to disappoint some, but the problem is on the station/national chain side.

 

The gentleman from the company I contacted made the following recommendation. He said almost all, if not all the national chains, and for sure the independent dealers are putting holds on your debit and/or credit transactions, some even when using their PIN with debit transactions. His company does do a $75 hold, but again the sale is within this amount...but some are doing the pre-authorization hold plus the sale amount. He said most of us don't see this even when we check our on-line balances because of the timing of the processing. While he would prefer the debit transactions (see reason above) he said if customers are concerned about the impact on their checking accounts they should definitely use their credit card as the LOC is usually significantly more than most people carry as their balance, but be advised the stations are still putting holds on your account. Next best solution is good ol' cash.

 

Curt

[Reaney in NH]

This interesting... but the info in the above post doesn't hold water in my opinion.

 

We just returned from a 4 day trip to SkidIN in WV. We traveled about 1900 miles in 4 days. Everytime I fueled the bike I used my Debit/Credit card, as I always do. I always paid at the pump... I always ran it as a credit card when asked.

I just checked my bank account online and I found that every transaction asked my bank for a $1.00 sale... then credited me back when the sale was final. most transaction hit my account within 24 hours. There was never a "Hold" put on any money... except for the $1.00 sale authorization.

 

I like using my debit card for everything. When I left home last Thursday I had $12.00 cash in my pocket... when I got home Monday night I still had $4.00 left. Now I can easily look at my banking statement and tell exactly how much I spent and where it was spent.

 

Just my 2 cents.

[FJR Rider]

I suspect it might have something to do with the part of the country you're in, and possibly how the station's card readers are set up. What I posted above is what one company principle says his company does and what he knows regarding other stations in the area.

 

Up until three weeks I never had a problem with using Debit Card either...then we went camping in small town in southern WI. All three of the stations in the town won't take Debit Cards at the pump...none had PIN readers, but when you inserted your debit card (which should recognized as the credit as well) the pumps would not take the cards. Put in the regular credit card and no problem. On my 1000 miler last Saturday, no problem with the Debit Card at the first four stops (Holiday, independent, Flying J, and a Shell) in three different states; fourth stop would not process the Debit Card, even when telling the pump it was credit; next stop the same, but would take the card inside; and the next stop was a Kwik Trip with a truck stop...sign clearly posted that Debit Cards would have a $400 hold applied. Same sign on the pumps at the final stop, another Kwik Trip.

 

So maybe it doesn't hold water, I'm only repeating what the company principle told me (because I asked a question) and what my son-in-law the banker told me as well. Take it for what it's worth..I'm only sharing.

[BuddyRich]

I always use my dept card. It always charges the exact amount to my bank. Sometimes I see a 1 dollar on there but it disappears as soon as the real amount hits. That's at major stations in about 10 states I travel thru on a yearly basis. Don't know what the little ma & pa stores do. I generally try to use normal fuel stations.

[Venturous Randy]

What I have learned from all this discussion and discussions with others not on this site is; there does not seem to be one consistant way that this works. I do believe that the banks are not the ones initating the holds, but if the holds cause money to not be available, then they may do the NSF (Non Suffient Funds) charge. I know this because I checked my checking account balance one evening to see if I needed to transfer any money as I knew my direct deposit paycheck was going to be put in after midnight. I was fine and knew what I had spent and what was pending. I got tagged with two $35 charges and when I went to the bank the next day, with a printout in hand, the only thing they could tell me was I had some purchases that had "holds" attached to them and they would not refund my NFS charges. In my case, I had made a fuel purchase, but I had also made a restaurant purchase and I believe they may have done the same thing.

So, if you don't keep a lot of money in your checking account to allow for this stuff, and you don't like going inside, usually twice, to make a gas purchase, you may end up paying a lot more for the purchase than you thought you were.

RandyA

Edited July 1, 2009 by Venturous Randy

[GunnyButch]

I read this article on the MSN home page and this thread came to mind, 10 things gas stations won't say.

 

http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/10-things-gas-stations-wont-tell-you.aspx

 

4. "If you're smart, you'll put that debit card away."

Your debit card might be a convenient way to pay for gas, but it's a no-win proposition. When you swipe a debit card at the pump, the bank doesn't know how much money you'll be spending until you've finished pumping. So to make sure you have the funds to cover the purchase, some stations ask banks to automatically set aside some of your money: That amount can be $20 or more. That means even if you just topped off your tank for $10, you could be out $30, $50 or even $100 until the station sends over its bulk transactions, which can take up to three days. If your funds are running low, you might end up bouncing a check in the meantime, even though you had the money in your account.

Unfortunately, paying inside with your debit card isn't much of a solution either. Many banks charge their customers 50 cents to $1 for the privilege of using their debit card in any PIN-based transaction. The American Bankers Association estimates only 13% of consumers pay these fees, but critics say the practice is on the rise and that consumers are often unaware of these charges.

Edited July 6, 2009 by GunnyButch