Have you ever swiped your credit card at a store, only to find that you don’t have enough money available to cover a purchase due to a "pending transaction"? What is a pending charge on a credit card anyway? Learn about pending charges, the impact they can have on you and your business, and what you can do about them.
What are pending credit card charges?
Pending credit card charges are ones that have been authorized but haven’t yet cleared. When a pending transaction happens, a hold is placed on the funds needed for that charge. Pending charges can happen when a merchant has not finished processing the transaction, a travel agent places a hold or security deposit on the card, or under a variety of other circumstances.
Pending credit card charge challenges
There are a couple of challenges pending credit card charges lead to:
- Limited available credit
- Difficulty accounting, as the hold on your card may be different from the actual value of the transaction
How do pending credit charges affect small businesses?
The biggest problem with pending credit card charges for businesses is that they tie up the available credit you may need as working capital. For example, imagine that you have a pending charge for $1,000, leaving little money available on your card, but you know the transaction will finalize at $100. This means you lose out on $900 in spending power until the charge is finalized.
What causes a pending credit card charge?
Some of the most common reasons for pending credit card charges are:
Credit card holds
A restaurant, gas station, or hotel may place a temporary hold on your card as they determine the final transaction value.
Fraud and anti-fraud authorizations
Unknown pending transactions may be a sign of fraud. Also, some companies place small pending charges on cards to verify ownership and avoid fraud.
Billing/user errors
Human beings aren’t perfect, and pending transactions are often the result of user error.
Consumers changing their mind
Consumers may change their minds after a making purchase and cancel a transaction. If the authorization already went through, the transaction may remain in pending status.
Subscription renewal issues
Unwanted subscription renewals can lead to pending transactions as well.
How long do pending transactions take?
Pending transactions typically take between three and five business days to clear, but they can last up to 30 days. The time your transactions take to go through depends on your credit card issuer, the product or service provider, and the purchase type.
How do I fix pending credit card charges?
In order to cancel a pending transaction, the merchant must contact the card issuer. You’ll want to go about asking for this in different ways depending on a few factors.
Purchase type/category
First and foremost, keep in mind that restaurants and gas stations will typically place a hold on your card and there’s little that can be done. Travel agents may place a hold that lasts up to 30 days. Be aware that with some categories, your best course of action is simply to wait.
Delayed shipments
If your charge is pending due to a delayed shipment, contact the seller and ask them to cancel the transaction until they complete the shipment.
(Inter)National holidays
If your transaction is pending during a national holiday or an international holiday associated with the nation in which you conducted business, your best course of action is to wait. There’s a good chance that the transaction will be finalized during the first business day following the close of the holiday.
Banking hours
Keep in mind that banking hours are usually 9 a.m. to 5 p.m., Monday through Friday. Any transactions that take place outside these hours will likely be held as pending until at least the next business day. If the transactions don’t clear by the next business day, consider contacting the merchant to see if the option to lift the pending charge is available.
Enjoy complete transaction visibility with Ramp
If you’re looking for complete transparency in your spending account charges, look no further than Ramp. Ramp gives you access to the following:
- Chargeback for unknown and questionable charges
- Spend control and management features
- Cutting-edge security capabilities that make it easy to identify and flag fraudulent, suspicious, and unauthorized charges in real time
Learn more about how Ramp can help your business today.
Fiona Lee is the Head of Content at Ramp, overseeing content marketing, customer education, and customer marketing. She brings over a decade of editorial experience developing high-quality B2B content. Prior to Ramp, she led content teams at companies large and small, including Google and Intercom, where she developed a strong interest in small businesses growth topics. Fiona graduated from UC Berkeley with a degree in English.
FAQs
Pending transactions typically take between three and five days to process but can vary depending on several factors. It can take up to 30 days for pending charges from travel merchants to clear.
No, a pending credit card charge is a hold to keep funds available so that the transaction can go through.
You can’t cancel a pending transaction until it is finalized.
Yes, your available credit will be reduced by the amount of the pending transaction until the transaction is finalized.
No, but you can typically see them if you log into your online account.
You cannot pay for a pending transaction before the transaction is finalized.
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