Holds on debit cards can derail travel plan of spending wisely

— -- Who wants to return from vacation this summer to a stack of credit card bills? I know; it's sort of like asking who wants to stay one more night in a motel room with more than a hint of mildew.

Plenty of people are packing their debit cards instead of credit cards as the plastic of choice this summer because they want to avoid digging themselves deeper into debt.

Consumers need to watch for fast curves in the road, though, when it comes to using debit cards on vacation. There can be onerous holds placed on your cash, unwanted ATM fees and even debit-card-related fraud.

Some hotels will hold 115% or 120% of the room charge plus tax on a debit card at check-in. The trouble is, you don't have access to that amount of money in your checking account when a hold is in place. And that might trigger overdraft charges.

Lydia Westbrook, research director for the American Hotel & Lodging Association, noted that the hold might be for seven days or longer in some cases.

The Federal Trade Commission notes on its website that how long that chunk of your money is blocked could depend on how you pay the bill, too. It's possible the block could be replaced in a few days, the FTC noted, if the consumer pays the bill with the same card used at check-in.

"However, if you pay your bill with a different card, or with cash or a check, the company that issued the card you used at check-in might hold the block for up to 15 days after you've checked out," the FTC said.

Gerri Detweiler, director of consumer education for Credit.com, said people driving across country and stopping in a few hotels along the way could accumulate a fair amount of holds on their money.

Depending on the balance in your bank account, blocking could lead to a string of $35 overdraft charges or bounced check fees for insufficient funds while the block remains in place.

Jean Ann Fox, director of financial services for the Consumer Federation of America, said if you've opted in to pay overdraft fees triggered by your debit card, you may face overdraft fees for purchases if your account is blocked. It depends on how much extra money you have in the account.

She noted that blocking problems can occur when using a debit card at the pump to buy gasoline, too. Fox recommends paying inside the station and using your PIN so you're charged only for the gas you buy and no extra money is held.

A warning about crooks

A crook could create more headaches on the road — if a debit card is your only source of cash.

One of my relatives took his debit card on the road during spring break. He had been keeping track of his spending via his laptop. But one day, the debit card was refused when he was paying for dinner.

He checked his account and found that someone had charged three items at a Best Buy across the country in California. One was $499 and two others were for $250. All three were under the $1,000 daily spending limit that sets off red flags on his account.

Experts say if you're going to take a debit card on vacation, change the red flag alerts to a lower amount to deal with the possibility of fraud. Ken Lin, CEO at CreditKarma.com, said in general it's better to travel with a credit card.

Once my relative spotted the problem, he immediately called the fraud number on the back of his card. The card was canceled — but that left the vacationer without access to cash.