As you browse through your bank and credit card statements, you may notice both "authorized" or "pending" transactions.
As their name suggests, pending transactions are charges that have been initiated but not yet fully processed or settled. Restaurants, hotels and car rental companies are just a few of the types of businesses that may initially list charges as pending. Pending transactions are totally normal and tend to be resolved relatively quickly, showing up as authorized transactions as soon as they do.
In this article, we’ll explain what pending transactions are and how they work, and give you an idea of how long the various types of pending charges take to resolve. Plus, we’ll tell you what to do if you have an issue with one.
What is a pending transaction?
A pending transaction is a charge that has been authorized but hasn't been fully processed. Pending transactions can occur when the money needed for the transaction is still being transferred between accounts. They will not yet be reflected on your checking account balance or available credit.
Payments, purchases, and deposits can all result in pending transactions. With a credit card, pending transactions can occur with both account payments and transactions. In some situations, this may cause you to go over your credit limit, so it's a good idea to check your balance if you're planning a large purchase or several within a short amount of time.
How long do pending transactions take to clear?
Pending transactions generally take between one and five business days to clear. That time can vary based on the type of transaction, the payment network, and the bank or credit card issuer.
Here are some general guidelines for how long pending transactions can take:
- Pending credit card transactions can take up to 3 business days to clear.
- Direct deposits usually clear by the next business day.
- Check deposits usually take up to 2 business days.
- Wire transfers usually take 1 business day, while international wire transfers can take up to 2 weeks.
- ACH payments usually take 1 to 5 business days.
Are pending transactions already deducted from my account?
Pending transactions are not yet deducted from your bank account, despite showing up in your account activity and available current balance. They are transactions that have been authorized by the merchant but have not yet been processed by your bank. The amount of the transaction will be temporarily deducted from your available funds, but the actual deduction will only occur when the transaction is processed. It's important to keep track of your pending transactions—if you don’t have enough money in your account to cover them, you could be hit with overdraft fees or other unexpected charges. Also, pending transactions aren't included in your balance if you're charged interest for a late or partial payment.
Can pending transactions be declined?
Yes, pending transactions can be declined even after they initially appear on your account as pending. This may occur for a variety of reasons:
- There’s insufficient funds to cover the charge
- Your bank has flagged the transaction as fraudulent
- There’s been a technical or processing error related to the transaction,
- The charge exceeds your credit limit
- The authorization hold expired
- There’s been a merchant finalization delay
If a pending transaction is declined, the funds that were pending will typically be released back into your account, adjusting your available balance. Whether you rely on paper statements or rely on mobile banking, it’s important to regularly monitor your transaction history to stay informed about the status of any pending transactions and to address any issues promptly with your bank or the merchant. If you need more clarity, reach out to your financial institution.
What causes pending transactions?
Some of the most common reasons for pending credit card transactions include bank holds, debit card holds, credit card holds, merchant holds, and a variety of other reasons.
Bank holds
Banks may place holds on accounts to monitor for unusual activity or protect against fraud, such as in cases of payment disputes or unusual spending patterns.
Debit card holds
In instances where you can't use your PIN for a debit card transaction, your debit card issuer will label the transaction as pending for up to 4 business days.
Credit card holds
Credit card payments take less time to clear than debit card payments. Usually, your credit card issuer will verify that you have sufficient funds, and then clear the transaction within 48 hours.
Merchant holds
Merchants like hotels and gas stations use authorization holds to verify the card and reserve funds for potential additional charges, causing transactions to show as pending.
Canceled transactions
If a transaction is canceled after being authorized, it may still appear as pending until fully processed.
Subscription renewals
When a subscription is due for renewal, a merchant may request authorization from the credit card issuer to ensure the card is still valid and has sufficient funds, resulting in a pending transaction.
Fraud and anti-fraud authorizations
Unknown pending transactions can indicate potential fraud. Conversely, companies may apply small pending charges as a security measure to confirm card ownership and prevent fraudulent activity.
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How to fix an issue with a pending transaction
If you want to cancel a pending transaction, you'll need to reach out to the merchant. They can then contact your credit card issuer. Several factors can impact your ability to cancel a transaction:
Purchase type/category
Some merchants, like restaurants and gas stations, will typically place a hold on your card that results in a pending transaction. Travel agents may place a hold that lasts up to 30 days. Be aware that with some categories, your best course of action is simply to wait.
Delayed shipments
If your charge is pending due to a delayed shipment, contact the seller and ask them to cancel the transaction until they complete the shipment.
Holidays
During bank holidays, your card purchases may lead to pending transactions. Usually, the pending payment will be finalized during the first business day following the holiday.
Banking hours
Banking hours are usually 9am to 5pm, Monday through Friday. Any credit card charges outside these hours will likely be held as pending payments until at least the next business day. If the charges don't clear by the next business day, consider contacting the merchant to see if they can lift the pending payment.
Gain complete transaction visibility with Ramp
If you’re looking for complete transparency in your pending account charges, look no further than Ramp. Ramp gives you visibility into all of your transactions, in one place.
Ramp’s automated expense reporting and categorization tools have proven especially helpful for small business owners looking for a centralized location for all of their finances. Plus, Ramp’s tools are available on-the-go via the Ramp mobile app.
These expense management tools come paired with Ramp’s corporate charge card, which offers an average savings of 5% on expenses. Ramp’s comprehensive platform also includes the following:
- Chargeback for unknown and questionable charges
- Spend control and management features
- Cutting-edge security capabilities that make it easy to identify and flag fraudulent, suspicious, and unauthorized charges in real-time
