Most hotels will let you reserve a room with either a credit card or a debit card. If you decide to book your room with a debit card, you should keep a few things in mind. One of the most important of these is the hold the hotel will put on your card. But there are other issues you should pay attention to as well. This article covers them.
For some, travel is fun. For others, it’s a business necessity. For either, it can present challenges. One challenge is arranging a place to stay. For the most part, today’s hospitality industry makes this challenge easy to overcome. Even in locations where it’s hard to believe a hotel can stay solvent, you can usually find one.
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Another challenge a traveler might face is having to carry a lot of cash. Fortunately, today’s traveler seldom has to face this challenge. Credit cards and debit cards have made it a thing of the past.
So you’re on a trip and you’ve brought your cards with you. Or you’re planning a trip with your cards by your computer. You’ve one more challenge to surmount. You need to decide which card to use when you book your hotel room.
Should you use your credit card? Your debit card? Hotels do often prefer credit cards. Even so, many financially prudent people prefer to use debit cards whenever possible. So do many people who know they just can’t control themselves when they start using credit.
Luckily for such people, making hotel reservations with a debit card is not difficult.
Book a hotel room with a debit card
Most hotels will accept a debit card payment to cover your hotel bill. A few will only accept credit card payments, but most welcome both credit cards and debit cards.
When you use a debit card instead of a credit card, you need to know a few things. Two of those things are your account balance and how hotel owners charge your card.
Know your account balance
When paying with your debit card, you’ll need to have enough money in the linked account. “Linked account” here usually means a checking account. But you might also use a prepaid card, in which case the card’s own account will serve this function. “Enough” in this case means more than what you actually plan to spend during your stay. When you book a room, the hotel will place a hold on sufficient funds to cover your planned stay and then some.
What does “and then some” mean? It means you’ll need more money in your account than you might think.
Hotels don’t follow the honors system
While we know you would never do this, some hotel patrons abuse their privileges. They wreck rooms. They watch lots of pay television. They order room service. And they make themselves costly in various other ways.
Well, a hotel manager isn’t going to take your word for it when you say you aren’t going to do any of these things. The hotel will place a hold on your debit card account that will cover these other expenses. If you don’t end up incurring any, the hold will be released — after you leave.
Though you commit to this hold when you book your room, the hold on your account will typically be placed when you check in. You won’t be able to incur extra charges before that, after all.
Know the hold amount
You can arrange your stay through the hotel’s online reservation system, use a third-party booking site, or just call. Whichever method you choose, find out how much money they will hold on your debit card account when you make your reservation, if possible. Then confirm the numbers when you check in.
Hotel room incidentals and other charges
The hotel will add some amount to cover damages, such as broken furniture. It will also add an amount to cover incidental charges or purchases. These are often called just “incidentals.” Examples include pay-per-view movies, room service, and telephone calls. The hotel might add an additional amount to cover resort fees. Resort fees cover your access to “resort” amenities like a pool. Not all hotels charge resort fees, but those that do make them mandatory. This means they’ll be on your final hotel bill even if you don’t use the amenities.
All these amounts, whether they’ll end up on your final hotel bill or not, will increase the hold. So might other charges specific to your hotel. The dollars can add up.
The hotel should tell you how much this hold will be. Make sure you find out. If you book through the hotel’s own website or hotel reservation system, you should be able to find this out when you book. If you use a third-party website, finding out before check-in could be a challenge. The hotel, not the third-party site, imposes the hold to cover incidentals and damages. If you book through a third-party site, you may only know the room rate. To avoid waiting till check-in to find out exactly what the hold will be, contact the hotel directly.
Can your bank account afford it?
Once you learn the amount, make sure you can afford to have that much money unavailable for other uses. Is the available balance in the linked account high enough?
Say your debit card is linked to your primary checking account. If your funds in the account are low enough, the hotel’s hold could cause a check to bounce. Or it could cause an automatic monthly withdrawal to fail. While that money’s on hold, it’s the same as if you didn’t have the money in the account at all.
Can you avoid some or all of this hold?
Some hotels might permit you to cover some or all of this with a cash deposit. This could let you avoid the hold on funds beyond the cost of your room. But if you have the cash and a debit card, why not deposit the cash to the debit card account then use the debit card? If you don’t have a debit card and need to pay cash for your hotel room, ask about covering incidental charges with a cash deposit.
On the subject of cash, if you want to book in advance and use cash, you’ll have to call the hotel. Online booking systems prefer cards.
A phone call doesn’t guarantee you’ll be able to book in advance to pay cash, by the way. Arranging to accept cash makes enforcing the hotel’s cancellation policy difficult. (More on cancellation policies below.) Can you get a deposit to cover the cancellation fee to the hotel before the deadline? If so, you might be able to persuade staff to let you reserve a room then pay the balance when you arrive. Along with a deposit for incidentals and other potential charges, of course.
Is there any way to shorten the hold?
“Up to a week” after checkout seems a bit much. Is there any way to shorten that?
Well, a hold on your debit card might last less time if you enter your PIN during the transaction. If you don’t enter your PIN, your transaction gets processed like a credit charge. This can mean it takes longer to clear.
With a hotel reservation, though, the transaction finalizes when you check out. So you’ll still have funds on hold for the duration of your stay. Using or not using a PIN will only change how soon money in your account becomes available after that. After all, the hotel’s whole reason for the hold is to protect itself from unpaid expenses. This risk of unpaid expenses doesn’t end till you leave.
One final note. This may vary depending on the hotel’s payment-processing setup. Often, a debit card with the Visa or MasterCard logo will get processed as a credit charge by default. (If you’ve acquired a debit card without one of these logos, the hotel might not accept it.) To make sure you’re asked to enter your PIN, request to have your card processed as debit when you check in.
The bottom line
The bottom line on these holds is that you should find out the details as soon as you can. Find them out when you book your room, if possible. If you can’t find them out when you book, at least try to find them out before you check in. The most important detail: How much over the base cost of your planned stay will the hotel put on hold? This varies from one hotel to another.
If your available balance can handle the hold till up to a week after your planned checkout, you should be good to go.
Know the cancellation policy
Hotels’ cancellation policies vary. More often that not, you’ll need to cancel your reservation 24 hours in advance to avoid cancellation fees. Some hotels, however, will only waive these fees if you notify them sooner. This could mean 48 hours to a week (or more) before your reservation date. Some hotels will charge cancellation fees no matter how quickly you cancel.
Cancellation policies may also vary for a given hotel. Does your reservation coincide with a popular convention or holiday? If so, be prepared to face stricter policies and harsher fees.
Additionally, third-party booking services may have their own cancellation policies. And these might be quite different from the hotel’s.
Is reading hotel and booking service cancellation policies laborious and tiring? Even sleep inducing? This writer thinks so. Still, it is necessary. Don’t neglect it.
Have your debit card with you when you check in
If you book through a third-party website, you might pay the base rate for your room in advance. This doesn’t mean you can leave your card at home, though. Charges beyond the room rate will not be included in your prepayment. All those charges you won’t ultimately have to pay if you behave yourself will still need to be put on hold.
So, to check in, you’ll need to have your debit card with you. You’ll also need to have sufficient funds in your debit card account to cover the hold for the extra charges.
Use a debit card supporting the local currency
Are you visiting the United States from abroad? Visiting a foreign country from your U.S. home base? If so, make sure your debit card supports transactions in the right currency. Visa- and MasterCard-branded cards will usually work anywhere you take them. That is, they’ll work anywhere where you can use cards. But some may charge foreign transaction fees that will make you wish they hadn’t worked.
The best way to avoid nasty surprises is to get a debit card that eliminates these fees. Read our guide to the best of these cards to learn more.
At the end of your stay, check over everything
When you check out, you’ll receive documents detailing all the charges incurred during your stay. We have it on good authority that such errors as double charges for single items are common. You might, say, get one pay-per-view movie for the price of two. Don’t wait till you get home to find out the hotel charged you for something you didn’t receive. If you catch these errors before you leave, you can have the clerk at the front desk remove them. This will be much easier than fixing errors discovered later in a bank statement.
Also check your bank account, both at the end of your stay and after you get home. Report any errors or discrepancies as soon as you find them.
Second thoughts: debit card or credit card?
It happened right about the point when we introduced you to the concept of debit card holds. You thought, “Hmm. Do I really want to deal with this hassle? Why worry about my checking account balance or load up my prepaid card? I’ve got a credit card. Maybe I should just use that.”
You’re not alone. Many people have such doubts. And most people do end up using credit cards when reserving hotel rooms. Why might your prefer one over the other?
With a credit card, it may be easier to spend more
A debit card hold on more funds than you plan to spend can make credit seem preferable. Every hotel you know of will accept credit cards. However, not all will accept debit cards.
Are your bank balance and credit limits typical? If so, you can probably spare more of your available credit than of your available bank balance. Remember that time you forgot about a check you’d written two weeks earlier? You know, that time you spent a few bucks too many on your debit card just before the forgotten check got processed. What a nightmare that was! Okay, maybe that wasn’t you. But you get the point. Why risk this kind of thing when you don’t have to?
With a credit card, the closest you can come to an overdraft is exceeding your credit limit. Normally, your credit card issuer won’t allow this. But you may be able to “opt in” to letting the issuer process charges that put you over your limit. When you do this, you’ll also authorize fees for such charges. Of course, this isn’t an issue if you have a high enough credit limit.
Have you decided to use a credit card but fear exceeding your limit? Consider calling your card provider to request a limit increase. This could be more prudent than an opt-in to allow over-limit charges and the fees that go with them.
But your debit card might be more flexible than you think
Debit cards, of course, don’t allow you to request a limit increase. You either have the funds you need or you don’t. To reserve a room with you debit card, you’ll need a sufficient balance in the linked bank account. Obviously, your bank isn’t going to give you an advance on next week’s paycheck, right?
Mostly right. What happens if you attempt a debit card charge that exceeds your available balance? Normally, you bank will decline the transaction. But the story doesn’t end there. You may be able to opt in to debit card overdrafts. When you do so, you agree to pay overdraft fees for transactions exceeding your balance. Some card users decide the added convenience justifies the risk of fees. Others prefer the live-within-your means discipline imposed by not allowing overdrafts.
Which should you choose?
Ultimately, the choice is yours. I favor anything that makes spending more difficult. The way I see it, anything that does this is a net positive for one’s financial health. This would make me choose a debit card and to opt out of debit card overdrafts. But my situation and yours could be entirely different. What’s the best way for you to book hotels, make related purchases, and pay any extra charges? That depends on you.
Since this has been an article about using your debit card, most of its advice assumes that’s what you’ve decided to do. If you’ve instead decided to use a credit card, perhaps you’d prefer to visit our survey of the best credit cards. Or maybe you’d like to read some credit card ratings and reviews.
Key personal loan statistics
- You can use your debit card to book a hotel room.
- To do so, you’ll need more money in your account than you’re actually going to spend.
- During your stay, the hotel will put a hold on money in your account. This hold will cover such additional charges as fees for room service and pay-per-view movies. It will also cover damages you might cause. It might also cover “resort fees.”
- Make sure you know the hold amount before you check in. You need to ensure you have enough money in your debit card account to cover this.
- Remember that money on hold does your account no more good than money that’s been withdrawn. Do checks or withdrawals need to go through during your hotel stay? Or within a week after your stay ends? If so, make sure your account can cover those after the hold funds become unavailable.
- Know your hotel’s cancellation policy.
- If traveling abroad, consider a debit card designed to avoid foreign transaction fees.
Can you book a hotel room with your debit card? The short answer is “yes.” Should you? That depends. If you don’t have a credit card but do have a debit card, then using your debit card for booking could be a great option. If you highly value the financial discipline that comes with using a debit card, you may want to use it even if you have a credit card.
If you’re using debit, make certain you have the best checking account or best prepaid account you can get. Make sure you know how much money will be placed on hold. Make sure you also know what all the various charges are that you might end up having to pay. And don’t forget to have your card with you when you check in, and to check over everything when you check out. If you do all this, you should be able to enjoy your leisure trip or make your business trip a profitable one. All while using your debit card.
Article Sources & Recommended Reading
- Debit card holds — Maine Consumer Services
- Using debit cards — Consumer.gov
- I went over my credit limit and I was charged an overlimit fee. What can I do? — Consumer Financial Protection Bureau (CFPB)
- Understanding the overdraft “opt-in” choice — CFPB
- Debit cards that build credit — SuperMoney
- My debit card is about to expire – What do I do? — SuperMoney
- How to get money off a debit card without a PIN? — SuperMoney
- At what age can you get a debit card? — SuperMoney