Car hire do they pre authorize payment?

12
Found 31st Aug 2017
I'm in Canada and I hired a car for 2 weeks Fromm Toronto Airport. They advised me it was $1043 and they asked for my card. They either swiped it or I entered a pin. I can't remember which. Anyway I assumed they were
holding the limit for the rental as that's what they said (Alamo). I then used my credit card throughout the trip as well as withdrawing cash. A payment was declined so unchecked my balance and my card is maxed out and there's no payment or pending payment to Alamo car hire. I have no other means to pay this. What will happen when I return the car. I have an additional credit card I have at home which I could use for payment. If they have pre authorized that amount does that mean they are guaranteed to get the funds from the bank even if it takes me massively overdrawn?
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12 Comments
I'm sorry, I've read this two or three times but I'm still not sure I understand. When you say your card is maxed out, do you mean you have reached your limit? If so, does that mean you have over spent and that the $1043 is still to debit taking you even further over your limit? If a payment has been authorised, it can take you over your limit. If they haven't put the authorisation through, it could be declined. It is difficult to say without more detailed information.
A credit card pre-authorization is much like any other charge to a credit card, except instead of actually debiting funds from the cardholder you just put a temporary "hold" on the funds that lasts for 5 days. At a technical level, the actual duration of the hold depends on the merchant classification code (MCC code). Some type of merchants may qualify for a longer hold than others, but in general if you are going to capture a pre-authorized payment you should do it before the 5th day to make certain the funds will be available. If you wait too long and the pre-auth has expired the post-authoriztion (capture) will be declined and you'll have to contact the cardholder to run the payment over again.

Once a credit card has been pre-authorized the cardholder cannot go and spend this money anywhere else. However, at the same time the charge doesn't actually show up on their credit card statement. (Although, if they call their card issuing bank the card issuer will confirm that a pre-authorization is holding funds on the cardholders account).

The merchant must go in and "capture" the funds within the 5 day period. If they do not, the pre-authorization will expire and the funds will be released by the card issuing bank back to the cardholder.
Found the above on a Canadian website... not sure how accurate it is though. You'd be best contacting your credit card company I think.

Have you maxed it out with other stuff, or is it possible that the pre-auth has made it appear as if you've hit your limit?
All car hire companies I've ever used have performes a pre-authorisation of the amount in full on debit cards. It's only a holding fee bit when you're on a card with a low limit or a currency card it hits you hard, right in the wallet!
Do you not know what you've spent on the card? Can you not work out whether the $1043 has been deducted from your original available balance based on what you've spent during the trip?
Original Poster
Ok so to clear it up a bit better I collected card on 24th Aug and they made me use my card for payment of the $1034 or st least that's what I think they done. I've then went on to spend the money thinking it was the money I had left over but it's not. The card has a £2000 limit on it and available funds are zero. All transactions are accounted for but I've def not paid for the car hire. What happens when I return the car at the end of the rental and payment is not authorized? Would they bill me to the U.K.?
This is a bit confusing. Have you spent your card limit of £2000 on general spending without taking into account the car payment. Can you not add up your receipts so as to have a clearer picture of what's been spent.
I think I understand. You had a card with £2K limit. 'Hired' a car. Used the card for this. Then, assuming the hire company had reserved or taken funds, gone on to use all the credit left on the card. Now you've maxed out the card, checked what you have spent on it, and found no sign of the car payment. So though they have confirmed the card they have neither reserved nor taken funds off the card.
When do you return the car? How long had you had the car before you checked the account? Have you totalled up your spending yet? You must know if you have spent over £1000 on that card, surely. If you have, you're screwed. Can you not transfer funds, using online banking, to this card? Alternatively ring your UK bank and explain what's happened. I believe all banks have reciprocal arrangements in most countries, where they do not actually have branches, for transferring funds (though you will be stung with a fee and interest - probably at both ends).
Alternatively I hear Canadian prisons aren't too bad. Are you any good at sewing mailbag ?
just pay the card through online banking to free up credit on it? also is that pre authorisation a deposit for the rental car incase anything happens... in which case is temporary until you give the car back.
Still don't understand how you've managed to max out the card without thinking about what you're spending, you had a card with roughly $3200 on it before any spending, after the car hire you would have had just over $2000, surely when you were spending you were taking notice of the amounts, and realised you'd spent an extra $1000(£600) that you didn't have?
Sounds like you have paid already but it's on hold. Car company's arnt daft enough to just give out cars without payments
How did you get on with the hire car company?
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