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When you use your debit card to conduct a credit transaction (you do not enter your PIN), the merchant sends us the amount, usually your purchase total, for preauthorization. This amount is placed on hold and removed from your available balance immediately. The hold is released after approximately 72 hours or when the transaction clears, whichever comes first. The hold helps reflect the most current available balance on your account through UFCU’s Online Banking, Phone Banking, Account Alerts and at ATMs.
No, they only apply to debit card purchases when you sign your name or do not enter a PIN. Debit purchases and ATM withdrawals made using a PIN subtract the funds immediately from your account, thereby reflecting an accurate available balance.
Exception: When using your PIN at a fuel dispenser, the merchant may still send a preauthorization request.
Your available balance reflects any preauthorization holds or deposit holds and is used to determine available funds when future transactions attempt to clear the account.
The balance we use internally as transactions clear is called your actual balance or total balance and includes all items that have cleared the account up to that point. This actual balance does not include outstanding debit purchases, share drafts (checks), or automatic drafts. If funds are not sufficient in the actual balance at the time of clearing, an overdraft fee is charged for each transaction that attempts to clear.
Most members depend on the accuracy of their available balances to help them avoid NSF situations or Courtesy Pay fees. Debit card preauthorization holds allow members to view pending transactions and provide timely available balance information. For example:
John visits the ATM and sees his available checking balance is $100, so he withdraws $50. He doesn’t realize his wife made a debit card signature purchase for $75 from their joint account earlier in the day. The resulting balance in their account would be negative when the debit transaction arrives for processing, so their overdraft protection is triggered to transfer $25.
However, if UFCU had placed a debit card preauthorization hold for his wife’s $75 transaction, John would have known that he really only had $25 available to him and could have avoided the NSF situation by withdrawing less money.
No, in fact, we believe this feature provides the information needed to help members avoid overdraft situations and thereby avoid Courtesy Pay fees. There is no change to our overdraft transfer or Courtesy Pay policies or processing.
The advantage of preauthorization holds is that you can check your balance and get a more accurate picture of what is truly available to you before you spend.
Your preauthorization transactions will appear as Pending Transactions within UFCU’s Online Banking. You can also obtain your available balance through UFCU’s Phone Banking and at ATMs.
In addition, you may use an Account Balance Change Alert to notify you via email or text message when your account reaches an available balance threshold you specify.
No. Some merchants, especially gas stations, hotels and sometimes restaurants, will preauthorize an amount that is higher or lower than the actual purchase amount. For example:
Gas stations: Many gas stations preauthorize transactions for amounts ranging from $1 to $75 because they do not know how much gas you will actually pump in advance of your transaction. If they preauthorize $75, we will place a hold for $75, even if your actual transaction is only $45. After 2 hours, we will release the hold and those funds will be available to you again.
If you are worried about large preauthorization holds from gas stations, we recommend the following:
Use a UFCU credit card for your transaction.
Use your debit card as "debit" and enter your PIN.
Hotels: When using a debit card to make reservations in advance, hotels generally will preauthorize an amount equal to an overnight stay, or more, depending on the length of your stay. This will result in a hold on your account up to 72 hours. Then, when you actually arrive, the hotel will place another preauthorization, often larger than the cost of your stay to cover possible incidental expenses. Because these can result in significant holds against your account, we recommend always using your UFCU credit card for hotel reservations.
Online and telephone debit card transactions are generally processed as credit transactions because you do not have the option to enter your PIN. These types of purchases will create a preauthorization hold.
When merchants preauthorize an amount that is different from the final transaction total, there is a chance that the hold and the transaction will not match, and the hold will not release. If the transaction does not match the hold, the system will automatically release the hold on your account in 72 hours.
No. Some merchants will not send the final transaction through to us within the 72-hour time frame of the hold. In that case, the hold will drop off and funds will appear to be available again, however, the debit transaction still has to clear your account. Unfortunately, we have no control over how quickly merchants process their transactions.
It is always a good idea to have overdraft transfer protection set up on your account. Overdraft transfer protection helps you avoid larger Courtesy Pay fees by using your Savings Account, Money Market Account or Line-of-Credit loan to automatically cover the insufficient funds.
When you open a UFCU checking account, your Savings account is automatically established as the overdraft account, but you may also use a Money Market account or Line-of-Credit loan as well. Please contact us for more details.
It is not our policy to remove debit card preauthorization holds unless an error was made. If an erroneous hold was placed, or there are extenuating circumstances, please contact us.