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Bad Credit Auto Loan - Your best options?
<h2>Bad Credit Auto Loan - Your best options?</h2>
A bad credit auto loan isn't impossible to find-- it just takes a little work! If your credit is a little dented and dinged, it doesn't have to shut you out of an auto loan. There are...
Credit Report – How Your Credit Score is Determined
Most consumers are aware that they have something known as a credit report that is used to determine whether or not they would qualify for a loan. Fewer are familiar with the FICO score, a creation of the Fair, Isaac, and Co. which distills their...
How to score with credit
With a massive £1.3 trillion of personal debt in the UK, obtaining credit and staying financially afloat are daily dilemmas for the British consumer. Many major banks, including Lloyds TSB, have recently declared an increase in the number of...
Lower Your Credit Card APR
APR often matters the most while deciding for a credit card. It is a common (and correct) notion that credit cards with additional benefits invariably have high APRs. This is true for almost every credit card company that exists in the UK.
You...
Student Credit Cards 101
If you’re a college student, you probably already have a credit card. If not, you may have plans to get one or more soon. So why should you read on?
Because financial debt is one of the main reasons that many students end up dropping out...
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What is Credit Card and Debit Card Blocking?
Have you ever been told you were over your credit card limit, or had your debit card declined, even though you knew you had available credit or money in your bank account? If this happened shortly after you stayed in a hotel or rented a car, the problem could have been card "blocking."
What is Blocking?
When you use a credit or debit card to check into a hotel or rent a car, the clerk usually contacts the company that issued your card to give an estimated total. If the transaction is approved, your available credit (credit card) or the balance in your bank account (debit card) is reduced by this amount. That's a "block." Some companies also call this placing a "hold" on those amounts.
Here's how it works: Suppose you use a credit or debit card when you check into a £100-a-night hotel for five nights. At least £500 would likely be blocked. In addition, hotels and rental car companies often add anticipated charges for "incidentals" like food, beverages, or gasoline to the blocked amount. These incidental amounts can vary widely among merchants.
If you pay your bill with the same card you used when you checked in, the final charge on your credit card, or final amount on your debit card, probably will replace the block in a day or two. However, if you pay your bill with a different card, or with cash or a cheque, the company that issued the card you used at check-in might hold the block for up to 15 days after you've checked out. That's because they weren't notified of the final payment and didn't know you paid another way.
Why Blocking Can Be a Problem
Blocking is used to make sure you don't exceed your credit line (credit card) or overdraw your bank account (debit card) before checking out of a hotel or returning a rental car, leaving the merchant unpaid. Blocking is sometimes also used by restaurants for anticipated sizeable bills (like large groups at dinner or a party), by companies cleaning your home, and other businesses to ensure credit or account money will be available to complete payment.
If you're nowhere near your credit limit or don't have a low
balance in your bank account, blocking probably won't be a problem. But if you're reaching that point, be careful. Not only can it be embarrassing to have your card declined, it also can be inconvenient, especially if you have an emergency purchase and insufficient credit or money in your bank account. On debit cards, depending on the balance in your bank account, blocking could lead to charges for insufficient funds while the block remains in place.
How to Avoid Blocking
To avoid the aggravation that blocking can cause, follow these tips:
•When you check into a hotel or rent a car - or if a restaurant or other business asks for your card in advance of service - ask if the company is "blocking," how much will be blocked, how the amount is determined, and how long the block remains in place.
•Consider paying hotel, motel, rental car, or other "blocked" bills with the same credit or debit card you used at the beginning of the transaction. Ask the clerk when the prior block will be removed.
•If you pay with a different card, by cash, or by cheque, remind the clerk you're using a different form of payment and ask them to remove the prior block promptly.
•Ask your current debit card issuer if they permit blocks, for how long, and from what types of merchants. If they do, you may want to consider getting an overdraft line of credit from your bank. Ask about a plan that always automatically covers the overdraft and does not involve a separate bank decision on whether or not to pay it each time. Although you might incur some interest on this plan if you don't pay off the amount fairly quickly, you would not have an overdraft that is not paid. Ask your bank if they offer an overdraft line of credit, how it would work, and how much it costs.
You may freely reprint this article provided the author's biography remains intact:
About the Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.
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