Using a Debit Card at a Hotel Can Be Risky Business
Using a debit card at our hotel in Ouray Colorado is possible, but, some guests experience problems. If you understand the way debit cards work, you can mitigate these unfortunate situations. At check-in, we ask our guests if this is a debit or a credit card. Just because it has a Visa or Mastercard logo on the card doesn't automatically mean it is a credit card; typically, debit cards are marked on the front with either "Debit Card" or "Check Card" and they are tied to a bank account.
If the debit/credit card you are using at check-in is attached to a bank or checking account, a hold is placed on the account for the full anticipated dollar amount expected to be owed to the hotel, including estimated incidentals, through the date of check-out and such funds will not be released for 72 hours from the date of check-out or longer at the discretion of your financial institution.
So, this means that if you do not keep a sufficient balance in your account, your account might experience an overdraft as these funds are not available for any other transaction, including checks that might be outstanding that attempt to clear the account. We recommend that if you provide us with your debit card at check-in that you do not change your mind and pay with another payment method (i.e. cash or a different credit/debit card) because you will experience a delay in clearing that hold on the funds in your bank account.
A few things you can do to mitigate any trouble are:
- Know your current account balance and make sure that your outstanding checks and charges are included in your computations. Ensure you do not commit more funds on your debit card than your account balance.
- Car rentals, gas stations where you pay at the pump, or restaurant and hotel bills are most notable locations where the final amout of the bill is not known when the authorization is obtained. These charges can take much longer to settle with the exact amount. In the event that you see the transaction but the amout is different than your actual obligation, it typically shows up as a "pending amount" as opposed to a final sale in your online banking software. Let the transaction finalize before you spend any amount held over from the pending transaction.
- Do not use your debit card when making a reservation at a hotel. When you are asked for a credit card to confirm a reservation, the debit/credit card is used as a room guarantee and indicates that if you do not show up on the reservation date, the hotel charges that credit/debit card for holding the room for you. Hence, the hotel/motel may charge your debit card unexpectedly. This charge may be valid and may overdraw your account if you do not keep a substantial balance in your account.
- Merchants do not have very much control over these situations. However, we work with guests during normal banking hours to clear the pending charges when issues arise. It is a long process and takes time. You must call your banking institution to see if it is possible to avoid possible problems with overdraft charges in the event of a mistake and work to involve the merchant too.