When I’m travelling, often a hotel or car rental company will want your card as a security deposit so they can put a ‘hold’ payment on it.
For example, Avis have a fuel deposit of about £50 - they put it on your card as a pending payment and when you deliver the vehicle back with fuel in it, they cancel the pending payment and don’t really charge you for it.
If you use a credit card in this scenario, you don’t have any issues because you won’t pay the balance for a month. However, when you use Monzo any payments like this are deducted from the balance immediately. This means that it’s still better to carry a credit card for these kind of security deposits.
Would be great if Monzo could find some way to solve this problem.
with any debit card the hold will lock those funds in your account make them un-spendable in case the transaction is taken by the company and not released.
You can imagine Monzo’s balance as being your ‘available’ balance, as it is called with many other bank’s apps. Your total actual balance is only affected once the payment is claimed so when it is released your available balance will go back up. Same with Monzo.
Yes. Credit cards won’t allow you to spend the amount held on an authorisation, but it’s invisible. It makes sense to me to make it visible but sometimes the reverse takes too long. This can be manually corrected by speaking to a COp via the app as far as I know.
I agree, it would be great. But how? This is a serious question: any suggestions?
Obviously they could (and in my opinion should) make the “pending” marker more obvious, but while that would make it clearer what’s going on, it still wouldn’t really change the situation. Is it even possible to make debit cards “more compatible” with these sort of “holds”?
We get a lot of these queries and we can refund them but we do need proof in a lot of cases. I’m pretty sure we’re looking for a solution so contacting COps isn’t needed. Not sure how this will.manifest.
In the last open office, @tom responded to a question about credit cards by describing how Monzo could have some of the benefits that people use credit cards for, without actually having a credit card. I think this would be a good candidate for that.
I recently stayed in a hotel in copenhagen and a deposit of £90 was taken. I only ended up spending £4 in the mini bar.
However, I actually preferred the deposit being excluded from my avaliable funds. As it gave me a buffer at the hotel, if I wanted to use room service or anything.
In my account it showed as £90 spent and then the day after I checked out, the same transaction (date I checked in) showed as £4.
I do honestly wonder what he is thinking about here, because for me the advantages of a credit card are all inherintly connected to the credit aspect. And this is one of them:
The whole point of a deposit is that you temporarily part with some money. This money can either be yours (eg debit card) in which case it affects your spending ability until you get it back. Or you can borrow some money (eg credit card) in which case you still have your money available to spend.
I cannot see how this fundamental difference can be changed.
As far as using a debit card for these purposes goes: in my opinion monzo has a strong advantage over other banks here, because they will cancel the pre auth if presented it evidence that they should. Most banks just let it sit until it either expires or the merchant reverses it.
The only option I can see is a separate pre-authorisation “overdraft” sitting separately to your usual, spendable overdraft.
Eg: Limit of £200. Pre-authorisations will come from that (ie. Monzo cover it for you) and then at the end of the trip they deduct what you spend from your actual balance.
It’s a little niche of an option but that would sort of work. I think.
It works less in a credit card way and more in a charge card way, which isn’t very common in the UK. Essentially you agree to pay the balance in full at the end of the month/stay rather than minimum installment payments.
Yes, true. At this point you’d effectively have a credit/charge card, though, and all the disadvantages of credit/charge cards come into play as well (eligibility, credit checks, potential to become indebted, etc.)
Which can mean that those who probably don’t need this form of credit will get it, and those who would need it can’t get it.
I hate that hotels do it. I recall as a student I saved up for so so long to go on an expensive holiday. All paid for. Got myself some spending money all good.
Hotel required £50 per night hold - which left me with basically nothing to spend. Really angered me that I was doing this for a fully paid room that didn’t even have a mini bar!
The most annoying part of it IMO is the part thas out of Monzos hands… The time it takes people to clear held stops.
I have multiple 1 quid BA checks taken 9 days ago now… Having booked flights the day the checks were made you would think a week is enough time for a company like BA to sort it out and refund or unblock.
I know I can request it… But I am not going to hassle people over a couple of quid, that will I assume fix itself. Its just untidy and annoying… Also I find it often generates a +1 payment rather than nixes the original deduction which my my logic a hold and cancel hold should simply vanish.
I’m in a situation where I used my Monzo card mistakenly for pre-authorization breakage deposit at a campsite. Realizing my mistake I asked for the pre-auth to be reversed and for the pre-auth to be done on a credit card, which the campsite did. But 8 days later I’m still £300 short? How long should it take for Monzo to realize the transaction will not take place and credit my account. The transaction is still showing as pending,
Can be a while (I have 30 days in my head, could be wrong) as the campsite are just allowing it to drop off without collecting. Contact in app and see if they can help but I’m not sure what proof they’ll need
Contact in app support. Monzo have been fantastic with hotel authorisations for me, just getting an email from the hotel that the authorisation wasn’t needed anymore and they returned the money instantly.
Cheers, yep I tried the contact in app thing and they said 28 days. A bit rubbish given the supplier reversed the pre-auth, it should be reflected instantly.
Not sure about Android, but on iOS you can reverse transactions yourself if you’re sure the merchant won’t collect the money. You immediately get credited the amount (although the merchant is still free to take it back if they think it’s rightfully theirs).
Go to the transaction, and click “Something Wrong? Tell Us!”
