Credit card security could drop you in real hot water

It’s emerged that credit card companies are stowing away money from your account without you knowing anything about it. And if your credit card or debit card is close to its limit or your overdraw amount, you could end up paying £50 a day even if you’ve only spent £10 on a trinket.

This is how it works. Say you make a transaction worth £200 and the vendor tells you your card has been declined, but you subsequently use the same card to confirm the same transaction, £400 will be deducted from your card. The additional £200 is held in an escrow account and refunded to you after two days.

That’s all very well if your credit limit or current account is healthy – but if you go over your limit, you will automatically incur charges from the issuing company, even though the “decline” security notice is auto-triggered by the card company.

And so you might well end up paying £50 or more for your £10 trinket, and experience the discomfort of having a naughty tag put against your card or current account.

Doesn’t seem very equitable, does it?