Are you trying to figure out when exactly the hotel is going to charge your credit card for your next hotel stay? Well, unfortunately the answer is not always so clear but we do have some guidance on how the process works.
In this article, I will break down what you need to know about how hotels charge your credit card. I’ll cover things like deposits, authorizations/holds, and give you some insight into what to expect.
When do hotels actually charge your credit card?
Generally, your credit card will be charged at the time of booking for prepaid stays and at the time of checkout for standard stays. If you have incurred any incidental costs, these will usually be charged at check out as well. But each hotel has their own way of doing things so the exact time your credit card is charged is often property specific.
Keep reading below to find out more about this sometimes less than straightforward process.
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Charge versus authorization
Before diving in too deep, it’s a good idea to clarify the distinction between a credit card “charge” and an “authorization.”
A charge is when your card is actually on the hook for the amount of the transaction, meaning that you are responsible for paying that amount.
An “authorization” (also known as a “pre-authorization,” “block,” or “hold”) is when funds temporarily become unavailable to you but you are not necessarily responsible for paying that amount.
If you have a credit card, an authorization means that your credit limit (or spending power) will be temporarily reduced by the amount of the authorization.
If you have a debit card then these funds in your bank account will not be accessible until the hold is released which typically can be higher consequence so be careful about using debit cards for your hotel authorization.
Deposit versus authorization
Some refer to a deposit and authorization as one in the same but these things are actually different.
Some hotels, often resorts, may require a deposit sometime before check-in. This deposit may or may not be refundable depending on your rate and the property. Often there is a deadline you can cancel prior to in order to guarantee a refund.
Sometimes the deposit amount is the same amount as the first night stay but other times it is an arbitrary amount.
As a practical matter, deposits are different from an authorization because if you never show up for the hotel stay, you can still get hit with a nonrefundable deposit. Meanwhile, the authorization likely will not take place until you check-in.
Why do hotels use authorizations?
Authorizations are meant to allow the merchant or hotel to guarantee that they will be able to charge a designated amount so that they do not run the risk of losing out on revenue.
It’s common with hotels, rental car companies, and other types of merchants like gas stations where the amount of the final transaction is not initially clear.
They might be annoying to deal with but if you think about why they are there it makes sense.
Let’s say that there is a traveler that has a credit card with only $20 available on it. If they ran up a hotel bill totaling $500 then the hotel would not have a way to recover the amount due at check-out.
However, if they did a pre-authorization of $500 they would be able to tap into that to cover the amount due.
What do the authorizations cover?
The authorization can be used to cover different types of charges.
For a non-pre-paid stay they can cover the amount of the hotel stay plus taxes. They are also commonly used to cover things like incidentals such as room service, entertainment, restaurant tabs, mini-bar purchases, unregistered pet fees, laundry, etc.
Some hotels also will rely on them to cover potential damage to a hotel room or theft of things like robes, linens, pillows, furniture items, etc. This may be especially true in destinations known for attracting partygoers like Las Vegas.
How much is the authorization for?
The amount of the hold or pre-authorization will be determined by the hotel.
If you did not pre-pay for your stay, some hotels may put a hold on your credit card for the amount of the entire stay plus taxes, plus a specific amount every night for the incidentals mentioned above. That amount could range from $20 to $200 per night or it could be a specified percentage of your expected bill.
Other hotels may put a hold on your account each night based on the amount that you are spending on the room rate or incidentals or a combination of the two.
Your best bet is to inquire about the authorization process to see how it will be calculated.
In some cases, you might be able to negotiate a lower authorization if you think the amount of the hold will cause issues.
How long will the authorization last for?
The hold or authorization on your credit card should be removed about 24 hours after check out. In some instances these holds like to hang around for a few business days so sometimes you do need to keep tabs on them.
Credit card holds in the hospitality industry can be placed for extended amounts of time such as up to 30 days!
Many times you may not even notice that there was a hold on your account unless you are paying close attention to your online bank activity.
Tip: You don’t actually have to pay for your hotel stay with the same credit card that you use for the hold/ authorization.
Different times you will be charged by the hotel on your credit card
There are six different “stages” of a hotel stay when your credit card might be charged by a hotel and they include:
- Prior to check-in
- During your stay
- After check-out
Time of booking (pre-paid or nonrefundable rates)
Prepaid rates are usually discounted room rates that have the least flexible cancellation policy. Essentially, when you make your booking you are not allowed to cancel it without penalty (although in reality you often can make changes).
You can book these rates directly with the hotel but often you will find these with online travel agencies such as Expedia, Hotels.com, Booking.com, and others.
Typically, when you book a prepaid rate you will be charged immediately for the entire stay.
However, that is not always the case.
As confusing as it is, sometimes a hotel will not charge you for a prepaid rate immediately and may wait until a week before check-in to charge you. And in some cases, you may not even have to pay for a prepaid or nonrefundable rate until check-out (this tends to be an overseas thing).
Finally, you should note that sometimes an immediate authorization of a low amount such as one dollar is applied to your credit card at the time of booking. This is presumably done just to ensure that you have a valid credit card.
As mentioned above, some hotels have a policy to charge you a few days or weeks before check-in. This is when those pesky resort deposits are often charged, so always be sure you are clear on whether or not those are refundable or not.
You should always be able to find this information in the terms and conditions when you go through the booking process.
When you check into a hotel you will virtually always be asked to handover a credit card and this is typically when the credit card authorization happens. A good hotel agent should be able to clearly explain the authorization amount and process to you but they don’t always go into detail.
If you are paying with cash then you may have to handover a pretty hefty cash deposit.
Remember, you could be asked to pay for your entire stay at check-in if you booked a prepaid stay or if the hotel has an uncommon policy of asking for full payment at check-in for standard rate stays.
During your stay
As stated above some hotels may apply a new hold on your credit card each day based on your activity. (In my experience this seems to be very rare.)
Some properties could actually charge your card for incidentals as you consume things like room service but for the most part hotels like to add those things up at the end of your stay and then charge you. Therefore, you are usually dealing with an authorization (and not individual charges) until check out.
The exception is when you ask a hotel staff member to charge your card directly instead of charging it to your room or your tab.
For non-prepaid rates, the most common time that you will be charged for a hotel stay is at check out.
If you already pre-paid for your stay, then check out is when you will likely be charged for things like incidentals.
You can handle check out in different ways and that might determine when exactly you get charged.
For example, if you check out at the front desk they will finalize your bill and allow you to review it on the spot. It’s at that time that you will likely be charged.
If you check out via the hotel’s app then your credit card might get ran at that time.
If you simply leave the hotel without checking out on the app or at the front desk then whenever the hotel decides to officially check you out after the standard checkout time, that’s when you will probably see a charge reflected in your account.
After check out
On some stays you may not actually get charged when you check out of the hotel. It’s possible that a hotel may take a couple of days to make the charge and this has happened to me on a couple of occasions.
Sometimes this can be an indicator that something went wrong and so you will want to apply extra scrutiny to your bill to make sure that it is accurate. Other times it may have just been caused by some sort of system delay, holidays, etc.
Knowing when and how your credit card will be charged by the hotel is not always straightforward. In fact, it often requires you to pay close attention to all of the terms and conditions in order to know exactly how credit card holds will work and when you can expect them to be released.
In my case, I try to make it a habit to review my online bank account a week after every stay to check for things like lingering holds and to ensure that the final bill was accurately charged. I also like to check out in person at the hotel so that I have a paper receipt of my stay (the folio).
Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.