Speedway, SuperAmerica ripoff change in their usage of credit / debit cards Midwest Nationwide

This is more of a bank rip-off than a gas station problem. To collect more fees, banks have exploited the technical limitations of how debit cards work.

There are two things a merchant does when you use a credit or debit card. The first is "authorization." The merchant contacts the bank and asks if your account is good for a certain amount. If the bank says yes, then the bank is guaranteeing they will pay UP TO that amount on the consumer's behalf later. Then, up to a couple of days later, the merchant will "close" the deal with the exact amount of the purchase. Upon closing, the money is transferred from the consumer's account to the merchant.

Usually the amount authorized and the amount closed are exactly the same. But in certain cases they are not. At a restaurant, they authorize the tab plus about 20% for a possible tip. Later they will close based on what you wrote for the actual tip. Rental car companies often authorize a security deposit, but don't actually take it unless you don't return the car on time. And then there's pay at the pump. Before you pump, the station doesn't know how much gas you will buy, so they authorize a large amount. It used to be common practice to only authorize $1.00 to see if the card is "live". Some stations may still do that, but then they risk not being paid if there isn't enough money in the account.

If it's a CREDIT card, an authorization counts against the credit limit, but is otherwise invisible to the consumer. The next authorization may be declined if it would be over the limit, but that's about all bad that will happen from an outstanding authorization.

DEBIT cards tied to checking accounts, or "check cards" work differently. Banks count the authorization against your available balance. If it ends up taking the balance negative, they might even say you were "overdrawn" and charge a fee. This is COMPLETELY BOGUS. Your money does not leave the bank until the merchant closes the transaction. The bank did guarantee to pay UP TO the authorized amount, but they didn't actually pay it.

The solution is simple. Do not pay at the pump with a debit card. Pump first and then take your card to the cashier inside. This way the only amount the bank ever sees is the actual purchase amount. In general, if you ever go near a zero balance, the debit card is NOT your friend. The excessive authorizations and delayed closures will burn you.