PERSONAL FINANCE

When you use a debit card to buy gas at the pump, you may notice that a hold gets put on funds in your account for a few days – sometimes for more than what you bought. What gives?

A hold of up to $75 can be put on your bank account, even if you bought only $50 worth of gas. And it can take a few days to clear. To protect merchants from fraud, an authorization is sent to the bank when a debit card is swiped at a self-pay pump. That triggers a hold of funds, which then has to be reconciled with the final purchase amount.

Visa Inc., the largest payment processing network in the country, said last month it would make changes in its systems this fall to allow debit card payments from gas purchases to clear much faster, usually within a few hours. MasterCard hasn’t said whether it would also speed up its own payment clearance system.

Meantime, avoid debit card holds by paying inside at the cashier after filling up. If you pay with a debit card and use your personal identification number, the transaction will clear right away.

Paying with a credit card at the pump also can trigger an authorization against your credit line, but that’s different from having a hold put on cash in your checking account. A credit card authorization wouldn’t affect cardholders unless they were right up against their credit limits.

The economic downturn has prompted credit card issuers to change contract agreements with cardholders – alterations that spell bad news for consumers. Those intricately worded “contract updates” that you receive could include costly changes.

Credit card companies are adding to their revenues by raising interest rates and increasing fees for things such as going over your charge limit, not making a payment on time and annual fees. The time lag between when the bill is mailed and when it’s due has been slashed, from 25 days to a minimum of 14 days.

Those introductory, superlow interest or zero interest rate deals are offered for a certain number of months, but a single late payment could prompt the credit card company to yank up your rate before the introductory period ends.

Check out the Web site run by Americans for Fairness in Lending ( www.affil.org) for things to watch out for.

From wire reports