What Are Pending Charges in a Checking Account?

by Todd Duvall
Debit card transactions aren't as instant as you might think.

Debit card transactions aren't as instant as you might think.

BananaStock/BananaStock/Getty Images

While “pending charges” may sound like something out of an episode of "CSI," it actually has to do with your debit card and your checking account. In simplest terms, “pending charges” are debit card charges that are on hold but haven’t yet cleared your account.

One Card, Two Types of Transactions

When you use a debit card to purchase something, the transaction can be handled in two different ways. If you are asked to enter your personal identification number, or PIN, the money is deducted from your checking account immediately. But if the purchase is handled the same way a credit card transaction would be handled — and you sign a receipt instead of entering your PIN — a “hold” will be placed on your account for the amount of the purchase. This is known as a “pending transaction.”

Accurate Accounting

Being able to see pending charges to your account lets you better manage your account balances and avoid any potential overdraft fees. Looking at your up-to-the-minute checking account online, for example, you would see any recent transactions (checks that have cleared, debit card transactions, ATM withdrawals, automatic/scheduled payments), as well as any “pending” charges. Knowing that the charge is “pending” and has not yet cleared, you can quickly transfer funds or make a deposit in order to avoid any costly overdraft fees should the pending amount place your account balance below zero.

Understanding the Terms

Depending on your financial institution, pending transactions are usually listed at the top of your online banking account and come with their own set of unique terms. Typically, a pending charge will be listed as “POS, Pending,” which means it was a point of sale transaction (you swiped your card and signed the receipt) and the transaction is pending. It will also list a “description,” which in this case would say “Pre-Authorization,” along with the name of the merchant and a transaction number. Finally, the transaction amount will be listed, usually in parenthesis, showing that it’s a “withdrawal.” Let’s say you just bought a $75 pair of shoes. When you check your account online, it will look something like this: POS, Pending Pre-Authorization HOUSE OF HEELS 83554177 ($75.00)

What’s the $1 Charge?

You go to the store, spend $48 on groceries using your debit card and that’s that — $48 is deducted from your checking account. But what happens when you pump gas? In this case, the gas station needs to make sure a purchase will be approved. So when you swipe your card, a $1 amount may show up as pending on your account. This pending status may stay there for a few days, until the actual purchase price is posted. Some places — such as hotels — may place an amount greater than your actual amount on hold. They do this in case you tap into the minibar, take home a bathrobe or damage something in the room during your stay. While this is perfectly legal, it can tie up your money for up to a week before the extra hold drops off.

About the Author

Based in the Pacific Northwest, Todd Duvall has been a writer since 1983. He has written for various local, regional and national clients, winning numerous awards. Duvall received a Bachelor of Arts in communication from Washington State University's Edward R. Murrow College of Communication.

Photo Credits

  • BananaStock/BananaStock/Getty Images