The convenience of credit.... it allows you to charge a meal on your credit card, pay for an appliance with an installment plan, or take out a loan to buy a house. But when dining out or staying in a hotel, it’s important to take notice of what the banking industry calls an “authorization hold.”
Authorization holds could be on their way to your favorite restaurant or hotel. Here’s how it works: Let’s say your restaurant bill comes to $100. When they run your credit card, they put an authorization hold on your account for that amount, plus a 20% tip. But that can be a problem if you planned to leave the tip in cash because you won’t have access to that money in your account until the actual charge clears.
At hotels, they may put an authorization hold on your card for what they think your total bill will be. If you are staying for several nights, this could amount to a lot of money that you no longer have access to.