How do “held” amounts appear on statements and affect balances of traditional credit cards?
"The ""hold"" is just placeholder that prevents you from overspending until the transaction is settled. The merchant isn't ""holding"" your money, your bank or card provider is protecting itself from you overdrawing. In general, it takes 1-3 days for a credit transaction to settle. With a credit card, this usually isn't an issue, unless you have a very low credit line or other unusual things going on. With pre-paid and debit cards, it is an issue, since your spending power is contingent upon you having an available balance. I'm a contrarian on this topic, but I don't see any compelling reason to use debit or stored value cards, other than preventing yourself from overspending. I've answered a few other questions in detail in this area, if you're interested."
The most important number on your credit card statement is not your available credit. The number you should be focusing on is your account balance.  Before the refund, you had a balance of $0. That means that you did not owe the bank anything.  You then got a $400 refund. This put your account balance at +$400 (sometimes shown on your statement as $400 CR).  This means that you have a credit of $400, or the bank owes you $400.  If you now spend $400 at a store, your balance will go back to $0. GIC perhaps? These would be quite similar to Certificates of Deposit where one is agreeing to lock up their money for a term and be paid a percentage for doing so. There are various kinds as some may be linked to market returns in some cases and others are just simple interest. "This question has been absolutely perplexing to me.  It has spawned a few heated debates amongst fellow colleagues and friends. My laymen understanding has provided me with what I believe to be a simple answer to the originator's question.  I'm trying to use common sense here; so be gentle. FICO scores, while very complex and mysterious, are speculatively calculated from data derived from things like length of credit history, utilization, types of credit, payment history, etc. Only a select few know the actual algorithms (closely guarded secrets?).  Are these really secrets? I don't know but it's the word on the street so I'm going with it! Creditors report data to these agencies on certain dates- weekly, monthly or annually.  These dates may be ascertained by simply calling the respective creditor and asking.  Making sure that revolving credit accounts are paid in full during the creditors ""data dump"" may or may not have a positive impact on ones FICO score. A zero balance reported every time on a certain account may appear to be inactive depending on how the algorithm has been written and vice versa; utilization and payment history may outweigh the negativity that a constantly zero balance could imply. Oh Lord, did that last sentence just come out of my head? I reread it four times just make sure it makes sense. My personal experience with revolving credit and FICO I was professionally advised to: Without any other life changing credit instances- just using the credit card in this fashion- my FICO score increased by 44 points.  I did end up paying a little in interest but it was well worth it. Top tier feels great! In conclusion I would say that the answer to this question is not cut and dry as so many would imply. HMMMMM" "The simplest answer to why you can't see it in your online statement is a design/business decision that was made, most probably originally to make online statements differ as little as possible from old fashioned monthly printed statements; the old printed statements never showed holds either. Some banks and card services actually do show these transactions online, but in my experience these are the rare exceptions - though with business/commercial accounts I saw this more, but it was still rare. This is also partly due to banks fearing lots of annoying phone calls from customers and problems with merchants, as people react to ""hey, renting that car didn't cost $500!"" and don't realize that the hold is often higher than the transaction amount and will be justified in a few days (or weeks...), etc - so please don't dispute the charges just yet. Behind the scenes, I've had bankers explain it to me thusly (the practice has bitten me before and it bothered me a lot, so I've talked to quite a few bankers about this): There are two kinds of holds: ""soft holds"" and ""hard holds"". In a soft hold, a merchant basically asks the bank, ""Hey, is there at least $75 in this account?"" The bank responds, and then has it's own individually set policy per account type as to how to treat that hold. Sometimes they reserve no money whatsoever - you are free to spend that money right out and rack up NSF fees to your heart's content. Yet some policies are to treat this identically to a hard hold and keep the money locked down until released. The hard hold is treated very much like an actual expenditure transaction, in that the money is locked and shown as no longer available to you. This varies by bank - some banks use an ""Account Balance"" and an ""Available Balance"", and some have done away with these dual terms and leave it up to you to determine what your balance is and what's ""available"" (or you have to call them). The key difference in the hard hold and a real expenditure is, technically, the money is still in your bank account; your bank has merely ""reserved"" it, earmarking it for a specific purchase (and gently promising the merchant they can have their money later), but the biggest difference is there is a time-limit. If a merchant does not process a completion to the transaction to claim the money, your bank will lift the hold after a period of time (I've seen 7-30 days as typical in the US, again varying by institution) returning your money to your balance that is available for purchasing and withdrawal. In every case, any vaguely decent banking institution allows you to call them, speak to some bank employee, and they can look up your account and inform you about the different sort of holds that are on your account that are not pending/completed purchase transactions. From a strictly cynical (perhaps rightly jaded) point of view, yes this is also used as a method to extort absurdly high fees especially from customers who keep a low balance in their account. I have had more than one bank charge NSF fees based on available balances that were due to holds made by gas pumps, for instance, even though my actual ""money in my account"" never went below $0 (the holds were for amounts larger than the actual transaction). And yes, the banks usually would waive those fees if you bothered to get someone on the phone or in person and made yourself a nuisance to the right person for long enough, but they made you work for it. But I digress.... The reality is that there are lots of back and forth and middle-men in transactions like this, and most banks try to hide as much of this from you the client as possible, partly because its a huge confusing hassle and its part of why you are paying a bank to handle this nonsense for you to start with.  And, as with all institutions, rules and policies become easily adjusted to maximize revenues, and if you don't keep sizable liquid minimum balances (100% of the time, all year long) they target you for fees.  To avoid this without having fat wads of extra cash in those accounts, is use an entirely disconnected credit card for reservations ONLY - especially when you are traveling and will be making rentals and booking hotels. Just tell them you wish to pay with a different card when you are done, and most merchants can do this without hassle. Since it's a credit card with monthly billing you can often end up with no balance, no waiting around for a month for payments to clear, and no bank fees! It isn't 100%, but now I never - if I can possibly avoid it - use my debit/bank card to ""reserve"" or ""rent"" anything, ever." Context clues hun. I was talking about if you go to Chilis and swipe your card for $20 and leave a $5 tip the processing amount the bank takes into account when telling you your available balance is much more likely to be $23 than $25. So the bank knows I went to Chilis the second I swipe my card, but doesnt know the exact amount. I was saying a lot of people dont understand that. They see they spent X at Chilis (processing) and assume it to be fact. I don't understand why you're having such a difficult time with this concept.   Also comparing swiping a debit card as credit to writing a check (in terms of when they show up on your account) is a terrible comparison. When a check goes through the accurate balance is taken out all at once a few days later, but when you swipe a debit card as credit a tentative balance is taken out immediately and adjusted to the actual balance when it settles.   And calling me ignorant because I don't need the help writing down where my money is at or goes is pretty ironic. "Why would you consider it null and void? It might be that something went wrong and the business ""lost"" the transaction one way or another. It might be something else. It might never appear. It might appear. In one of the questions a while ago someone posted a link of a story where an account was overdrawn because of a forgotten debit card charge that resurfaced months later. Can't find the link right now, but it can definitely happen." "Executive summary: It sounds like the merchant just did an authorization then cancelled that authorization when you cancelled the order, so there was never an actual charge so you'll never see an actual refund and there's no money to ""claim"". More detail: From your second paragraph, it sounds like they just did an authorization but never posted the transaction. A credit card authorization is basically the merchant asking your credit card company ""Does sandi have enough credit to pay this amount and if so please reserve that amount for a bit."" The authorization will decrease the total credit you have available on the card, but it's not actually a charge, so if your billing cycle ends, it won't show up on your statement. Depending on which company issued your credit card, you may be able to see the authorization online, usually labelled something like ""Pending transactions"". Even if your credit card company doesn't show pending transactions, you'll see a decrease in your available credit, however you shouldn't see an increase in your balance. The next step, and the only way the original merchant gets paid, is for the merchant to actually post a transaction to your card. Then it becomes a real charge that will show up on your next credit card statement and you'll be expected to pay it (unless you dispute the charge, but that's a different issue). If the charge is for the same amount as the authorization, the authorization will go away (it's now been converted to an actual charge). If the amounts are different, or the merchant never posts a transaction, the authorization will be removed by your credit card company automatically after a certain amount of time. So it sounds like you placed the order, the merchant did an authorization to make sure you could pay for it and to reserve the money, but then you cancelled the order before the merchant could post the transaction, so you were never really charged for it. The merchant then cancelled the authorization (going by the start of your third paragraph). So there was never an actual transaction posted, you were never charged, and you never really owed any money. Your available credit went down for a bit, but now should be restored to what it was before you placed the order. You'll never see an actual refund reflected on your credit card statement because there was no actual transaction." "&gt; Or just remember how much you spent. The purpose of my comment was to say the online balance isn't a true balance, not that I had trouble balancing a book.   Except that you rather obviously *don't* comprehend what the meaning of ""true balance"" is.  The balance the bank shows on it's online system (or it's statements) is very much a ""true balance"" **of the transactions the BANK is aware of** (i.e. the ones that have been processed).  That you think the bank should somehow be ""magically aware"" of the fact that you just signed a credit card transaction -- or that you wrote a check and mailed it off to someone -- demonstrate that you lack a fundamental comprehension of the system.  And the ""just remember how much you spent"" as an excuse for not properly (independently) **recording (and mathematically subtracting)** what you have spent...  Is demonstrative of both ignorance AND laziness." There are two basic issues here.  First, there is the difference between accounting terms and their dictionary definitions.  Second, once you dig into it there are dichotomies similar to put vs call options, long sales vs short sales, bond yield vs interest rate.  (That is, while they are relatively simple ideas and opposite sides of the same coin, it will probably take some effort to get comfortable with them.) The salient points from the Wikipedia article on debits and credits: In double-entry bookkeeping debit is used for increases in asset and expense transactions and credit is used for increases in a liability, income (gain) or equity transaction. For bank transactions, money deposited in a checking account is treated as a credit transaction (increase) and money paid out is treated as a debit transaction, because checking account balances are bank liabilities. If cash is deposited, the cash becomes a bank asset and is treated as a debit transaction (increase) to a bank asset account. Thus a cash deposit becomes two equal increases: a debit to cash on hand and a credit to a customer's checking account. Your bank account is an asset to you, but a liability to your bank.  That makes for a third issue, namely perspective. Most bank registers (where you write down entries) show deposits (+) to account as a CREDIT. Payments, fees, and withdrawals are DEBITs to your bank accounnt. On loans such as credit card accounts, a credit to your loan account is a payment or other reductions of the amount you owe. A charge to your account is a DEBIT to you loan account. They did this just to confuse us! As Joe mentioned, you can carry a balance on your credit card for some grace period (typically 1 month). You will not be charged any interest if you pay your balance at the end of the grace period. I think of it as a way to get liquid immidieately for making purchases. For example, you want to make a large purchase but your funds are in some investment account which might take ~1 week to get to you. You can use the credit card to make the purchase and use that grace period to move your money from investments to checking account and pay for your purchase (without paying anything extra). This helps you keep your money invested and not having to keep large amounts in checking/savings account, which does not generate any returns. "Doesn't make any difference.  Reconciling is important, but if you are constantly checking the online balance in between (because you are NOT keeping track of a running register balance) then the fact that you *eventually* ""balance"" is irrelevant...  And in fact if you're NOT maintaining a register, then you're really not ""reconciling"" (or ""balancing"") anything.... you're just looking over a bank statement and saying *""OK that looks right""*; or, as is more likely in your case saying *""Waitaminute, that's not right ... Oh, I guess I forgot about that transaction... and that one... and that other one.""*" I'm not sure if someone else answered already in the same manner I will. I can't guarantee for sure if it's the same in the U.S.A. (it might since major credit cards companies like Visa/MC/AMEX are American companies) but in Canada having/keeping unused CC is a disadvantage because of the following: Banks and financing companies look more at the total amount of credit available to you than at how much purchases you have on your cards. Ex: Let's say that you have the following: - Visa cc with $10,000 limit and $2000 worth of purchases (made more than 30 days ago) on it. - Mastercard cc with $10,000 limit as well and $1000 worth of purchases (less than 30 days old) - A major retail store cc with $2000 limit and $0 balance. Hypothetical situation: You want a bank loan to do some expensive house repairs and are looking for a lower interest rate than what your cc can offer. The bank will not care about the amount on the cards. They will add-up all the limits of your cc and treat your loan request as if ALL your cards were filled to their respective limit.  So in this case: they will consider you as being right now in debt of $10K+$10K+$2K = $22,000 instead of only $3000 and they might:  1. refuse you the loan 2. grant it only if you transfer all purchases on a single card and cancel all the others. 3. Once the $3000 is transferred on one of the cards (and the others cancelled), they can require that you reduce the limit of that card. Hope this helps! They hold most of time rental value for example if you rent car for 5 days and decline insurance offered at counter - they will ideally hold  5days x rental value per day + insurance x 5 days  most of them round of this figure. if the card is issued from overseas like asia they hold extra $ 500 for collection issues.  hope this helps you to plan - this is general thumb rule. "tl;dr It's a difference between cash and cash equivalents and net cash and cash equivalents.  Download the 2016 annual report from http://www.diageo.com/en-us/investor/Pages/financialreports.aspx On page 99 is the Consolidated Statement of Cash Flows at the bottom is a section ""Net cash and cash equivalents consist of:""   Net cash and cash equivalents consist of: 2016-06-30   2015-06-30 Cash and cash equivalents                      1,089          472 Bank overdrafts                                 (280)         (90)                                                  809          382  The difference between net cash of 809 million and 382 million is 427 million, matching the ""Change in Cash and Cash Equivalents"" from Yahoo. I do not know that bank overdrafts mean in this situation, but appears to cause cash to show up on balance sheet without being reflected in the net cash portions of the cash flow statement. And the numbers seem like balances, not year of year changes like the rest of the statement of cash flows.  2015 net CCE              382 2016 cash flow          + 427                          ---- 2016 net CCE              809 Cash from overdrafts    + 280                           ---- 2015 balance sheet cash 1,089"