Caution: Holiday travel could lock up your credit limit

Written by
Richard Barrington
Terms apply; see the online credit card application for full terms and conditions of offers and rewards.

At we discuss the most up-to-date news and trends within the credit card space. Since we first pioneered the concept of online credit card reviews in 1998, our team of financial experts has provided comprehensive and unbiased credit card reviews for more than 175 cards, plus hundreds of additional resource articles to help educate everyday cardholders so they can feel more confident about their card choices. All our content is written and reviewed by industry experts. Though our content may occasionally contain references to products from our partners, we maintain strict editorial integrity and advertiser relationships and compensation never influences ratings, reviews or featured products. The difference between editorial content and advertising must always be clearly stated. Learn more.

Having a credit card charge denied can quickly cast a shadow over your holiday spirit. It’s especially awkward if you’re traveling for the holidays.

Imagine you’ve just completed a delicious meal in a fancy restaurant. You’ve sent the check up for payment and the server returns with an anxious look on their face.

Perhaps instead you’re standing in line with your kids to be admitted to a popular attraction. When your turn comes, you confidently tap your card and the screen reads “denied.” You try again but the card reader stubbornly insists on turning you down, as your kids and the line of people behind you become impatient.

If these sound like scenes from a vacation nightmare, you should know there are things you can do to avoid having a card denied while you are traveling for the holidays.

The fact is that travel expenses can quickly max out your credit card limits. This is because of the high costs involved and because of the policies some companies use to charge your card.

How can holiday travel affect your credit limit?

Tying up too much of your credit limit can have two adverse effects:

  • If it causes you to max out your limit, a charge may be denied and you may find that card unusable until you’re able to make a payment.
  • Because your credit utilization ratio accounts for 30% of your credit score, using too high a portion of your credit limit can hurt your score. Especially in cases where you’ve been charged for reservations months in advance of your vacation, this could have a meaningful impact on your credit terms.

The following are some things you should know about how different companies charge your card when you travel, and some tips on how to avoid using up your credit limit while you’re away for the holidays, or any time of the year.

Hotel reservations

Travelers often plan their trips months in advance. Depending on how you make your reservation, this can keep a chunk of your credit limit locked up that whole time.

A big key is whether you made a prepaid reservation. Prepaid reservations generally offer you a more favorable rate than ones you can cancel. However, they also charge your card immediately.

So, be aware that making a prepaid reservation could lock up part of your credit limit long before you travel. Also, if you don’t pay off your balance in full, you could be paying interest on the charge for months in advance of your trip.

Finally, be aware that when you arrive at the hotel, besides charging you for the cost of the room they may put a hold on your credit card to cover “incidental” charges incurred in your stay. The unused portion of this hold will be released when you check out, but in the meantime that’s another portion of your credit limit you won’t be able to use.


When you pay for an airline ticket by credit card, the cost of the ticket will be charged immediately whether the ticket is refundable or non-refundable. Any refunds that are necessary are made by the airline company, and there may be a few days delay before those are reflected in your credit card balance.

The main thing is that as with hotel reservations, booking your trip months in advance may eat up a chunk of your credit limit long before you travel.

Car rentals

When you rent a vehicle, the car rental company may put a hold on your credit card for an amount in addition to the agreed-upon cost of the rental.

This hold sets aside a portion of your credit limit to cover the cost of any damages to the car, or any other charges above the contracted price. This hold will be released when you return the car if no additional charges are necessary.

So, be aware that when you rent a car, the hit to your credit limit may be bigger than what you expect to pay for the rental.

Gassing up your car

Whether you’re driving a rental or using your own car, when you fill up your tank you may tie up more of your credit limit than you think.

When you tap or swipe your card at a gas pump, the card has to be approved before it is known how much gas you’ll buy. So, gas stations have the credit card company put a hold on an amount that is likely to be more than sufficient to cover the cost.

These hold amounts can be as high as $175. Even if your fill-up ends up costing much less than that, $175 of your credit limit will be tied up until the hold is released. This can take anywhere from a several hours to a few days.

The excess amount of the hold is likely to be fairly small compared to your credit limit. But, if you’re already carrying a substantial balance, it could be enough to push you over the edge.

Tips for managing your credit limit

To avoid having problems because too much of your credit limit is tied up by travel-related charges, consider trying the following:

  1. Don’t rely on a single card. Young adults in particular may still be on their first credit card. An upcoming trip can be a good reason to get a second credit card as a back-up option.
  2. Know your credit limit on each card. Knowing the limits of each card you have tells you how much credit you have to work with.
  3. Keep track of what you charge to each card. Be mindful of the limits and balances on each card before you decide which one to use. This step may also help you think about which rewards program would be best for the type of purchase you are about to make.
  4. Pay down balances before a big trip. Ideally, clear out some room in your credit limit before you travel. This can help you avoid maxing out your cards when you’re not in a good position to do anything about it.
  5. Gas up a few days before you travel. If you’re traveling by car, fill up the tank a few days before you travel. That will give the hold on your credit limit a chance to clear before you start charging other vacation expenses. Another alternative is to pay with cash – which may also earn you a discount on the price of gas.
  6. Request an increase in your balance. If you’re planning your travel months in advance, consider requesting an increase in your credit limit. According to data from the Federal Reserve Bank of New York, more than two-thirds of such requests are approved, so the odds are in your favor.
  7. Utilize credit card rewards. Redeeming credit card rewards is an excellent way to offset the cost of your trip altogether. Using points, miles or cash back to cover the cost of your travel expenses can help you avoid eating up too much of your available credit, and help save you money in the long run.

Even if you don’t log as many travel miles as Santa Claus, these tips can help your holiday cheer – and your credit limit – last throughout your journey.

Richard Barrington
Cardratings Contributor

Richard has over 30 years of experience in financial services, including 23 years with the investment management firm Manning & Napier Advisors, Inc., where he led the Marketing Group and served on the firm’s Investment Policy Group and Executive Group. Over the years, Barrington has...Read more

Featured Partner Cards:


The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Reasonable efforts are made to maintain accurate information. See the online credit card application for full terms and conditions on offers and rewards. Please verify all terms and conditions of any credit card prior to applying.

This content is not provided by any company mentioned in this article. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any such company. does not review every company or every offer available on the market.