Short Definition:
A card authorisation hold is a temporary block that a card issuer places on part of a cardholder's available balance or credit limit the moment a transaction is approved, before any money actually moves.
Full Explanation:
The hold exists because authorisation and settlement happen in two separate steps: the issuer checks and reserves funds first, and the merchant captures the actual payment days later, with only the capture moving real money. Card scheme rules limit how long an unreleased hold can sit on an account — typically a matter of days — after which it drops off automatically even if the merchant never settles. Where the final amount isn't known upfront, such as a hotel, car hire firm, or fuel pump, the Payment Services Regulations 2017 (Part 7, Regulation 78) require the exact figure to be agreed with the cardholder before funds are blocked, and the cardholder's bank must release the hold as soon as the real transaction amount is known.
In Practice:
A fleet manager topping up company vehicles on a fuel card notices the pump places a larger provisional hold than the final fill-up cost, tying up headroom on the card for a few days until the merchant settles — worth flagging to whoever reconciles the corporate statement so a temporary hold isn't logged as real spend.
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Source Link:
https://www.legislation.gov.uk/uksi/2017/752/part/7 — Payment Services Regulations 2017, Regulation 78 (Payment transactions where the transaction amount is not known in advance)
Last Reviewed:
20260726
