Avoid The Sting If Your Credit Get Blocked
Below is a MRR and PLR article in category Finance -> subcategory Credit.
Avoiding the Sting of Credit Card Blocks
Summary
Credit card blocks can lead to significant inconveniences. Learn what they are and how to steer clear of them.Understanding Credit Card Blocks
Frequent travelers often encounter credit card blocking, sometimes through unfortunate experiences. Hotels typically display their blocking policy on small signs, while car rental companies mention theirs over the phone. Yet, daily, hundreds of unsuspecting consumers are caught off guard by these blocks. So, what exactly are they?
Credit card issuers may “block” or set aside funds for anticipated charges to minimize risk. These blocks aren't immediately charged but reduce your available credit. Often, the amount blocked is higher than expected due to estimated additional charges like gas for a rental car or meals at a hotel. Even a pay-at-the-pump transaction might place a $100 block on your card, leading to complications if you're unaware.
Real-Life Scenarios
Picture this: you're flying to Las Vegas for the weekend. Without high-roller status, you need to secure a flight, car rental, and hotel room?"all of which place blocks on your trusted rewards card. Hoping to ease the news of your trip, you take your partner to a top restaurant. The waiter informs you, to your embarrassment, that your payment is declined.
An even worse scenario occurs when these reservations are made with a debit card. Each block affects your checking account, leading to overdraft charges for flowers, dinner, cab fare, and concert tickets. Plus, any checks clearing during this time add to the financial strain. Ouch.
How to Avoid Blocking Issues
To prevent blocking hassles, keep your credit card balance well below its limit. While this advice is wise, it’s not always practical due to the unpredictable nature of blocks. A crucial tip: never use a debit card for reservations.
A potentially better strategy is to have a spare credit card. Use this card for reservations, protecting your favorite card’s available credit. At checkout, use your preferred card to earn rewards. Additionally, using your spare card for blocks can enhance your credit score over time.
Stay Informed and Proactive
As with many credit issues, awareness and foresight are key to avoiding unexpected problems and costs. Now that you're informed, take proactive steps to dodge the credit blocking trap.
You can find the original non-AI version of this article here: Avoid The Sting If Your Credit Get Blocked.
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