1988RedT2 wrote:
93EXCivic wrote:
I have never heard of this. Is it a state by state thing? I have put like $10 of gas in the car and I am lucky if I have more then $100 in my banking account. And why is a debit card a bad idea?
I have read numerous articles on personal finance that warn of the dangers of debit cards. The "hold" thing is routine.
http://moneywatch.bnet.com/saving-money/blog/devil-details/for-safetys-sake-dump-the-debit-card/1035/
http://finance.yahoo.com/banking-budgeting/article/109125/10-places-not-to-use-your-debit-card?mod=bb-checking_savings
A quick google will reveal dozens more similar articles. I don't carry a debit card and haven't for at least 10 years. They can't do anything a credit card can't do better. Of course, I've got a little self-discipline and I realize that I need to pay the balance in full when the bill comes. Some people apparently aren't capable of doing that. 
The problem is that in the position I was in (aka college with no job) a credit card wasn't the best idea and carrying cash doesn't seem the best idea. I pretty much don't use my debit card in any of those 10 places.
In reply to 93EXCivic:
Yeah, I wasn't trying to single you out.
It works the same way with a credit card, as it does with a debit. You just don't notice it on a credit card, because you have more than $100 credit line.
It will clear out in the evening cycle.
Basically, a card in this situation will pre-authorize and amount. In this case $100. The card company gives the gas station a six digit authorization code. This code is basically like a reservation, in that the gas station can legally withdraw $100 with that code. When they settle the credit cards at the end of the night, the gas station computer says they only used $23 of that. It then releases the hold by $23 and the remaining $77 drops.
This is how any transaction with plastic works, it just happens that in this case it authorizes more. You will run into this same situation with a hotel check in, a rental car check in or a tipping situation. If you keep a tight balance on a debit card, it's best not to use it in those instances. People notice this more now than they use to because of ADDED regulation by the government. When the big deal about overdrafts happened about a year and a half ago, they said banks can't charge overdrafts on these debit accounts without the customer setting it up in the first place. So now banks put a hard limit, on the debit accounts. The way it was previously, was that you basically went to overdraft for the day, but got credited at the end of the day when the merchant settled their credit cards....that posted to your account before the day passed, so you never got hit with the overdraft.
Long story short, this is normal behavior for plastic, just unnoticed by many. Though when noticed, it brings on the suck. It doesn't work this way for other transactions though. You buy something in a retail store for $23, it only reserves that $23.
Vigo
Dork
8/11/11 12:05 p.m.
We simply need to deregulate banking and let the market work it's magic.
BWAHAHAHAHAHAH
And then after you stop laughing you start crying. 
I keep a $100 in my wallet for emergencies and use credit cards exclusively. With all of the identity theft and fraud going on these days, I don't want a debit card exposing my liquid assets to thieves. If someone charges $1000 on my credit card fraudulently, I can choose not to pay the bill until they get it straightened out.
I also get gift cards for my purchases at the end of the year - $800-1200 worth. Use these for xmas gifts.
I got burned by this when I was in college and a debit card was a 'new' thing. That was 15 years ago, so this isn't a new thing.
It does suck...is a frustrating situation when you live that close to the edge on your finances and make responsible decisions managing money.
If I managed my money as carefully now as I did at 18, I would probably be better off for it.
