Posted July 15th, 2013 No Comments
State Senators to Study Credit and Debit Card Holds

Companies that temporarily inflate charges to credit and debit cards for purchases at gasoline stations, restaurants and other businesses will face scrutiny from Nebraska lawmakers later this year.

The State Legislature’s Banking Commerce and Insurance Committee will conduct a study this later this summer of the regulations in place for the temporary extra charges that can be applied to credit and debit card purchases when the total bill isn’t immediately known.  The practice is intended to protect merchants from fraud and loss.

The Committee’s findings and recommendations are due before December 31st

The temporary extra charges often apply to customers who use credit or debit cards at gas stations, hotels, restaurants and other businesses where the total bill is not immediately known.  The extra charges are later removed at no cost to the card owners, but the higher bills can remain for two to three days.

The hold renders that money inaccessible to a card holder until the charge clears.  For buyers who are close to their credit or debit limit, the additional charge could lead to overdraft fees, a bounced check or a purchase getting declined.

Legislatures in at least a dozen other states have introduced bills to regulate the credit card holds since 2003 but few have passed.  Groups that represent convenience stores and other businesses in other states have argued that the hold amounts are out of their control; because they contract with credit card processing companies that set the terms of how the technology is used.

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