Hotel credit card pre-authorisations: Tips on how to deal with the practice

You're checking into your hotel and the reception clerk asks to take an imprint of your credit card to pay for any incidental charges. This is a pre-authorisation, and it can happen even if you've paid for your room fully in advance.

At this stage it's not a charge but it locks down some of the funds on your debit or credit card and your available balance is reduced. The reservoir of funds you can withdraw from at an ATM or use to pay restaurant bills takes a hit.

The pre-authorisation amount varies from hotel to hotel, country to country but $50-150 a night is within the ballpark. One problem is that it can take several days after check out for any funds you're owed to be refunded to your account.

In its booking terms and conditions, the Mantra group advises: "The pre-authorised amount is set aside by the card issuer for a period of up to 14 days from the date of pre-authorisation."

There are a few lessons to take away from this. Use a credit card rather than a debit card for the pre-authorisation. When you check out, use the same card to settle your bill or it can take even longer for the funds to be restored to your account.

Some suggest it's better to make a charge at your hotel, however small. This requires the hotel to process the payment when you check out, and your card issuer will be notified to refund the balance of funds charged against your pre-authorisation.

PLAY YOUR CARDS RIGHT

Don't keep all your credit cards and cash in the same place. When you're out and about, take only what you need for the day and if there are two of you divide cash and cards.

See also: The most annoying tips travellers have to pay

See also: What's the difference between a hotel suite and regular room?