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

They typically run the amount to verify there is limit, then charge the actual amount and release the hold. They also sometimes overcharge/pre-charge as a deposit for incidentals/damage, ie. in case you consume stuff from the minibar or pay-per-view movies, use paid internet connection, smoke in a non-smoking room, steal a robe, etc.