What Are Pending Charges in a Checking Account?

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.

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.

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.

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.

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.