International hotels-holding deposits on Starling and similar

sturgeon

Hi everyone,

Some advice is needed please. When I’ve travelled abroad to a destination where my usual credit card charges transaction fees I’ve used my starling card. There’s no issue using abroad and it works well. 

However I’m struggling with holding deposits, for example when turning up to a hotel they want a card on file and put a temporary charge on it which can be many hundreds. This doesn’t get returned by Starling until 30 days or so later so I’m then having to transfer that amount in and just do without that large amount for a month. 

I’ve now attempted to book and pay for an experience in the UAE but the site timed out and the payment wasn’t processed. This wasn’t a hotel booking but a reservation I’ve made which requires prepayment. Starling are endlessly asking for the retailer to send emails to me in a very specific format citing date/time of attempted transaction, that they will not attempt to claim the funds etc. i cannot order a small business to use their specific email template and am fed up now. I’ve shared multiple emails confirming no booking was made plus they found the failed transaction and confirmed they cannot charge for this. I can’t email the supplier again. 

Are these holding deposits that don’t get refunded for 30 days, particularly for international hotels, common on all debit cards? Do Revolut or Monzo do the same? 

I used my credit card in a USA hotel recently for the holding deposit to avoid this pain but I’m not sure they attempted to charge an amount per night or somehow just kept it on file. I’d happily use my credit card but want to avoid a transaction fee on the deposit. If the transaction is refunded would that fee also be refunded?

I want to dump starling but if all debit cards and similar banks operate in this way then fair enough. Any suggestions welcome!

[Deleted User]

Holding deposits (pre-authorisation of funds to be clear) are extremely common, particularly in the US where pretty much any half decent one will need the card and will run a check and block some funds as a sort of deposit. Release of funds depends on the bank. I would definitely be using a CC as that way they are holding the bank's money not yours (effectively, because it will be released, I realise you have to pay if they do charge you!) and you can dispute the transaction if needed without having cash issues. In the US you might find they don't allow a debit card to be used in case you withdraw the money before any hold appears

DullGreyGuy

These arent holding deposits nor is anything refunded... card transactions are typically done as a two step process, an authorisation and then collection. In most cases the two happen back to back but in certain cases there may be a gap between the two or the collection may never happen. When authorisation is given the monies are ringfenced to in theory ensure that they are still available when collection request comes through. How long funds are ringfenced for is in the control of your bank rather than the merchant. In most cases its 14 days or less however Sterling do state they will hold a ringfence for up to 31 days.

In these kinds of scenarios (eg hotels) companies arent typically taking a deposit but simply getting an authorisation to ensure you can afford to pay. The money never leaves your account, just ringfenced to stop you spending it, and so equally nothing to be refunded.

Assuming you arent the type to decide to pack the hotel's bathrobes then you could using a credit card to give the authorisation and foreign fees wont apply because no collection is made. Then at checkout/settlement pay with your Stirling card for your charges to your room. The only risk is if they discover an issue after checkout it would be charged to the CC and incur the foreign currency fees... probably a bigger risk with hire cars than hotel bookings.