Eli5 why do shops, hotels and so on reserve a larger amount than needed on credit cards.

Question

For example, I’m staying in a hotel, I pay for my room with MasterCard. The total comes to 250 dollar. I check my credit card statement 2 days later and there is 250 dollar off the account and an other 250 reserved.

In: 2

Answer 1

Especially for hotels and rental cars and such they need to make sure you can pay for any damages or extra charges you may have. If you rent a hotel room, empty the minibar before leaving and then when they charge your credit card it gets declined the hotel will have to spend time and money going after you for the bill. They do not want to do this. So they reserve an additional amount on the credit card and when they have inspected the room and counted the bottles in the minibar and the towels in the bathroom they remove the reservation on your credit card.