When you present your debit card at a gas station, hotel, or car rental agency, the merchant can put a hold on your debit card. The amount of the hold is set by the merchant. The financial institution sets the length of the hold, which can be several days to several weeks. Holds at gas stations can be in the $50 to $150 range, since the merchant is ensuring that you have money available assuming you are filling up a halfton pickup. Holds at hotels are in the $50-$200 range, to make sure you can pay for the room and incidentals. Holds at car rental companies are typically several hundred dollars.
The hold will tie up that amount of money in your account. If you don’t have enough to cover the hold in your account and any other charges you have made, you can be charged overdraft fees.
How can you protect yourself from this? Use a credit card or pay cash for gas. Federal law limits your liability for fraudulent charges on your credit card to $50 if you dispute the charge within 60 days of the statement date. Most credit cards companies actively monitor for fraud and offer to protect their customers from fraudulent transactions.
You can use a debit card and a pin, but due to the risk of card skimmers stealing your card number and pin, it is not recommended. If a scammer gets access to your checking account, they can drain all the money out before you realize it. So the next time you get gas, check into a hotel or rent a car, reach for the credit card.