Back in November 2021, reader Lauren had a query about her hotel billing situation:
“I thought I’d start a new life in Oregon about two years ago and things haven’t gone quite like I planned. Unexpected costs, car repairs, illness, housing, etc. Been living in a motel and the manager has ran my credit card for the month without my knowledge or authorization two times now. The charge just appears one day. I told her the first time not to do that. I might want to use a different card. She did it again this month, I didn’t have enough in the account and now I’m overdrawn. Can she keep doing this?”
— LaurenBankrate reader
Lauren’s question remains relevant today, and so we’re revisiting this topic with updates since our initial publication.
No billing without permission
First of all, a business can’t charge your card without your permission. It would need to get your authorization first. This holds true whether you’re paying with your smartphone or for any other online card-not-present transaction. Hotels, extended-stay or otherwise, are no exception to this rule of no billing without permission, and it’s likely that the hotel obtained Lauren’s permission upfront to bill her card.
The FTC and “negative options”
There are sneaky ways that businesses can try to charge your card without your express permission, but authorities frown on such practices. For instance, the Federal Trade Commission advises that it runs afoul of the law “to bill people for negative options, automatic shipments or continuity programs without their express consent.”
A negative option refers to the practice of merchants automatically enrolling you into ongoing subscriptions or charges unless you take action to decline them or opt out. Examples of negative option transactions include:
- A business that sends you periodic notices offering goods, such as books, and then follows up with sending and charging you for the goods because you didn’t refuse the offer.
- A magazine subscription that’s automatically renewed when it expires unless you expressly cancel it.
- A seller that offers a free or discounted trial period to try out a product or service, and then automatically bills you at a higher rate when the trial period ends.
Hotel payments and policies
Hotels are considered merchants and must get a cardholder’s consent before charging your card. Generally, hotels can authorize a temporary hold on your card at check-in that covers your expected hotel bill as well as a nominal amount for “incidentals.” If you avail yourself of the minibar snacks left invitingly in your room, for example, the additional hold covers what you’ve eaten. At checkout, If you’ve racked up more charges than the amount of the initial incidental hold, you’d make up this difference with your final bill.
In an extended-stay situation, the authorized hold that a hotel or motel places on your credit card typically “prepays” the period you expect to stay. It can also charge the card on file at periodic intervals by placing a hold on your card for the money due.
Changing your card on file
It sounds to me like Lauren’s hotel manager was acting legally, because the hotel would likely have gotten her authorization in advance — at the time she checked in — to place a hold on her card at periodic intervals for the amounts due. If you’re in this type of situation, you should talk to the hotel’s management and see if they can change the card on file for future payments.
Considering that this is an extended-stay hotel, if you’re not sure how long you’re staying or whether your credit card has enough credit available to cover the stay’s total charge, switch to a card that has an adequate line of credit to cover your anticipated stay. Otherwise, your card issuer could charge an overdraft fee for going over your credit limit, unless you’ve opted into overdraft protection.
The bottom line
Businesses cannot legally charge your credit card without authorization. Hotels will typically get your authorization to place a hold on your card for your stay at the time you check in, and they don’t need to notify you every time you’re charged. If you have an open-ended stay and are concerned that you don’t have adequate credit on the card you used to checked in, talk to your hotel management and switch to a different card. If you stay in hotels frequently, consider getting a co-branded hotel credit card or a travel rewards card that could at least bring down your overall hotel costs via points, miles or cash back.
FAQs
Businesses cannot legally charge your credit card without authorization. Hotels will typically get your authorization to place a hold on your card for your stay at the time you check in, and they don't need to notify you every time you're charged.
Can a hotel charge your card if you don't show up? ›
Yes – hotels often charge a penalty fee for unused reservations when guests are no-shows. These fees serve to cover at least part of the room rate they lost out on.
Can your credit card be charged without your authorization? ›
Under the law, businesses must take steps to ensure that charges to customers' credit cards, debit cards, phone bills, and other accounts are authorized. Those principles apply to mobile payments, too.
Can I dispute a hotel charge? ›
Usually, a cardholder can initiate a chargeback within 120 days from the date of the transaction. After providing evidence for the issuing bank to review, it takes between 60-75 days to receive their decision.
What if my credit card charged without my knowledge? ›
What should I do if there are unauthorized charges on my credit card account? Contact your bank right away. To limit your liability, it is important to notify the bank promptly upon discovering any unauthorized charge(s). You may notify the bank in person, by telephone, or in writing.
Can a hotel charge your card without telling you? ›
Businesses cannot legally charge your credit card without authorization. Hotels will typically get your authorization to place a hold on your card for your stay at the time you check in, and they don't need to notify you every time you're charged.
Can a hotel charge a credit card for no show? ›
A person who has booked a room and who decides not to show up without notifying or canceling, is subject to a penalty. However, the sanction is at the discretion of the accommodation facility. Usually it corresponds to the cost of the first night and the amount is charged to the customer's credit card.
How do you win a hotel dispute? ›
To win a hotel dispute, you need to gather and present clear, comprehensive documentation that substantiates your case, including communication records, receipts, and policies. Respond promptly and effectively to the dispute through your payment processor, adhering strictly to their guidelines and timelines.
Can you demand a refund from hotel? ›
Many hotel stays are refundable as long as you cancel within at least 48 hours. But some aren't. If you leave without making any arrangements, the hotel will probably charge you for the full stay. Experts say hotels consider refund requests on a case-by-case basis.
What if a hotel charges me for something I didn't do? ›
In case the hotel charges you for damages and you don't agree, try to resolve the matter with management. If that doesn't work, you should file a dispute about this matter with your card issuer. You could even file a complaint with your state attorney general or consumer protection agency.
A: Contact your bank immediately if you suspect unauthorized transactions on your debit card.
What if there's a charge on my credit card I don't recognize? ›
notify your financial institution or credit card issuer immediately. report any transactions you didn't make or approve. check your credit report for any credit you didn't apply for or any suspicious activity. continue to monitor your accounts after you report it.
What is the federal law for unauthorized credit card charges? ›
Federal law (the Fair Credit Billing Act, or FCBA) sets out a dispute process to help you get those mistakes fixed on credit cards and revolving charge accounts (like open-end credit accounts). Unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50.
What happens if you pay for a hotel room and don't show up? ›
Most hotels won't reserve a room for you without a credit card. If you don't check in & don't cancel it within the time allowed (each hotel is different) whether it's 24 hrs before or 12 hrs before, your credit card will be charged. Most will charge your credit card because you did not cancel within 72 hours.
What happens if you don't show up to a hotel you booked? ›
Some hotels will charge you for the entire reservation if you no show. Some will charge less than the full amount of the reservation if they are able to rebook the room nights you reserved.
Can a hotel charge you if you don't check out? ›
You don't really have to do anything to make this payment as you usually aren't required to physically check out. Instead, just leave when you're ready and the hotel will automatically charge the card on file for you. If you want to pay with a different card, you'll have to stop at the desk and let them know.
Do you get charged for not returning hotel cards? ›
The key card is considered a part of the hotel security measures. Failure to return it could be viewed as theft or loss, potentially resulting in additional charges. Therefore, before leaving the hotel, make sure to return the key card to the hotel staff to avoid unnecessary issues and extra fees.
