Why pumping $20 worth of gas could turn into a charge of more than $175 dollars (2024)

FAQs

Why is my gas station charging me $175? ›

Amid rising gas prices, some drivers may also be in danger of an overdraft fee just for fueling their tank. Visa and MasterCard have raised the amount a gas station can hold when people pay with a credit or debit card to $175, up from $125.

Some businesses (like gas stations and hotels) will place a temporary charge on your payment card. Since pumping gas is an open-end purchase, gas stations will typically pre-authorize your payment card for a larger amount to ensure that your card has enough funds to cover the amount of gas you'll leave with.

Pre-authorization charges are a common practice when a vendor (a gas station, a hotel, or a rental car agency) doesn't know exactly how much of their service you're going to pay for. The hold ensures that the vendor will get appropriately paid after you're done, but this can put consumers in a tough spot.

As such, the gas station owners want to make sure they will get paid. That's why they will put a preauthorization hold on credit and debit card payments at the pump. The exact amount may vary from station to station, but it's generally anywhere from $1 up to $100.

Paying at Gas Stations

The cost of your gas will be charged later as a separate transaction that releases the authorization hold. This temporary charge should correct to the actual amount or fall off within 5 days. To avoid this issue, pay for the amount of gas you'd like at the register before you pump.

Why is this? Gas stations are in fact legally allowed to charge a customer extra if they choose to use a credit card to purchase gas. This is because the gas station owners pay an interchange fee to the payment networks. They often pass this fee on to the consumer to recoup that additional cost.

The gas station doesn't know the final amount of your purchase when it approves your credit card. So the gas station runs a $1 preauthorization charge through your card as a placeholder. This allows the gas station (or any other merchant) to confirm your credit card will accept a charge from them.

Your gas bill will fluctuate depending on natural gas prices and increase energy use, but may also change due to the season, a change in lifestyle or the addition of family members. Some commonly used appliances that consume natural gas are: Clothes Dryers. Water Heaters.

When you swipe a credit card at a gas pump, QT sends a preauthorization of up to $175, depending on the card brand, to the bank to ensure that there are sufficient funds in your account.

What are pre-authorization charges? A gas hold is a gas station payment processing method that places an authorization hold on your account for an amount ranging from $1 to $125, and leaves it there until your actual transaction clears.

Why did the gas station charge me an extra $100? ›

The $100 hold ensures that there are enough funds on your card to pay for gas. When you're finished pumping, the station will charge you for the actual purchase amount, and the $100 gas hold will be released once the transaction is completed, which can take several days.

Disputing a charge — whether you were double-billed, overcharged or hit with credit card fraud — is one of your rights under the Fair Credit Billing Act. And while it should be (and often is) fairly simple, the process varies widely by credit card, card issuer, the merchant and your situation.

UPDATE POSTED JUNE 2022: Given the increase in the price of fuel, Visa/Mastercard have increased the authorization limit reached at the pump. If you are accepting EMV payments at the pump, you can set authorization limits for Visa, MasterCard, Discover & American Express no higher than $175.

The gas station doesn't know in advance how much gas you're going to buy, so they put a hold on your card to ensure you have enough funds to cover the purchase. This hold can vary from $50 to even $150, depending on the station.

The pre-authorization hold is designed to protect the gas station from fraud. The merchant doesn't know how much gas you're getting and wants to ensure there's enough credit to cover it.

When the network is busy, such as during peak usage times, gas fees can increase due to heightened competition for block space. Transactions involving complex smart contracts typically incur higher fees because they require more computational resources to execute.