How do pending transactions work? - NerdWallet Australia (2024)

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  • What does ‘pending transaction’ mean?
  • How pending pre-authorised transactions work
  • How long does a pending transaction take to clear?
  • How to cancel a pending transaction

Pending transactions can confuse consumers because of the lag between the charge and when it’s processed.

What does ‘pending transaction’ mean?

A pending transaction is a credit card transaction that is authorised but not yet processed. Your bank has approved the charge, but the transaction still needs to be processed by the merchant.

When a transaction is pending, the amount charged gets deducted from available funds until up to five days after it takes place. That amount remains in your account balance until the payment is fully processed.

» MORE: What is credit card processing, and how does it work?

How pending pre-authorised transactions work

When you pay with a credit or debit card, your bank authorises the transaction, and the amount charged is taken out of available funds. It stays as a ‘pending’ transaction in your list of charges until processed by the merchant. Once this happens, the transaction is no longer pending, and your account balance is updated.

For example, say you have a $2,000 credit card balance and use it to pay for a $500 hotel stay. Your available funds will be $1,500, but your account balance will remain $2,000 until processed.

Pending charges are a normal part of using a credit card. Plan for pending transactions no matter who you bank with.

To avoid overspending, refer to available funds or wait for transactions to appear on your statement. Debit card transactions (when you select savings or cheque) are deducted from the total balance immediately, making it another alternative.

» MORE: Pros and cons of using a credit card

How long does a pending transaction take to clear?

Pending charges are often confusing to consumers because of the processing delays. Some pending transactions take up to 10 days to approve, but most pending charges are processed within five day. It depends on the merchant and credit card companies involved.

Processing times for the Big Four banks:

  • ANZ: 3-5 days
  • CommBank: 3-5 business days, but can be up to 10
  • NAB: 3-5 business days
  • Westpac: Up to 5 days.

If you use your card for pre-authorised payments, such as a hotel or car hire security deposit, expect it to take longer for the money to be credited back onto the card. This is considered a hold, not a pending transaction, as it’s not technically a charge.

How to cancel a pending transaction

You can’t cancel a pending transaction. You must wait until the charge is processed to launch a fraud investigation or request a chargeback.

If you don’t recognise the charge, take a moment to reflect. For example, if you have a joint credit card account, recurring subscription or have travelled recently, you might not even remember the charges. If you aren’t sure where the charge came from, contact your bank immediately.

🤓 Nerdy Tip

Lock your credit card if you’re unsure about a transaction. This won’t stop pending transactions but prevents future charges. Check your online banking daily and set up text notifications for unfamiliar transactions.

Frequently asked questions about pending transactions

Do pending credit card transactions accrue interest?

Pending charges don’t accrue interest. Transactions aren’t included in your credit card account balance until they’re fully processed. So, if a transaction takes five days to process, the day it is processed is the day it will start to accrue interest, not the day you made the purchase.

» MORE: How to calculate credit card interest

Does ‘pending’ mean the money has already been taken from your account?

A pending transaction means it’s authorised and being processed. While the amount charged is taken from your available funds, it won’t be reflected in your account balance until processed. Check your available funds to see your current balance in real time.

Does a ‘pending payment’ mean it’s paid?

When a payment is pending, it means the merchant received the payment but the charge is still being processed. It usually takes three to five days to process a transaction on a credit card. When a transaction is authorised, it confirms to the merchant that a card is valid and there are available funds.

What types of transactions require pre-authorisation?

Every time you make a purchase with a credit card (or select ‘credit’ with a debit card), the transaction will be pending until the merchant processes it. This isn’t specific to certain transactions or purchase amounts.

About the Author

Amanda Smith

Amanda Smith is a freelance reporter, journalist, and cultural commentator. She covers culture + society, travel, LGBTQ+, human interest, and business. Amanda has written stories about planning for retirement for…

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How do pending transactions work? - NerdWallet Australia (2024)

FAQs

How does a pending transaction work? ›

Pending transactions are transactions that haven't been fully processed yet. For example, if you make a purchase with a debit card or credit card, it will almost always show as pending immediately when you view your account online or in a mobile banking app.

Will a pending transaction definitely go through? ›

It's simply a recent payment that you've made with a debit card or a credit card. You may have bought something in a shop or online. Either way, the word 'pending' shows that the payment is still being processed by the retailer and is waiting to leave your account.

Does a pending transaction mean they already took the money? ›

Although a pending transaction signifies your vendor has yet to receive payment or the deposit funds aren't released yet, the amount involved is typically reflected from your bank account. This gives you an accurate, up-to-date picture of the money you have available.

How long does a pending transaction take to expire Australia? ›

Your bank has approved the charge, but the transaction still needs to be processed by the merchant. When a transaction is pending, the amount charged gets deducted from available funds until up to five days after it takes place. That amount remains in your account balance until the payment is fully processed.

Do pending transactions still go through? ›

It's also common to see this when online shopping, as some merchants may hold off on processing the payment until your order has shipped, this includes international purchases too. Essentially, pending transactions mean the money has been committed to a specific purchase, but it's still moving between accounts.

How long does a transaction sit in pending? ›

Pending transactions are payments that would normally go into or out of your account within 7 days. When you use a debit card to pay for something, it reduces the available balance in your current account. Similarly, when you use a credit card to pay for something, it increases your available balance.

Can a pending transaction be successful? ›

It can either be Pending, Successful, Failed, or Reversed. Pending: This is the initial status of a transfer immediately it is made. It is a temporary status that usually changes within seconds to "Successful" or in some cases "Failed".

Can a pending transaction be declined? ›

A pending deposit to a bank account may be declined if the account the deposit comes from lacks sufficient funds. A pending check deposit to a bank account could be declined if the check was filled out incorrectly, is fraudulent, is over six months old or has a stop payment.

Can I spend money that is pending? ›

Until it processes, a pending transaction could put a hold on an account balance or credit limit. That doesn't necessarily mean you can't use your credit card or bank account. But it can affect your available balance—or the funds you're able to access.

How long can a pending transaction last? ›

A charge can be pending on your account for up to five days. There are several factors that affect how long a pending charge will appear on your credit card. These include when you made the transaction and how long it takes the merchant to process it. Card pre-authorizations may also show on your account for longer.

Can I use my available balance if I still have money pending? ›

Available balance is how much money you are able to spend right now, including any pending transactions. Meanwhile, the current balance shows how much money is in your account without subtracting pending payments or withdrawals. Current balance can be useful in some situations, like when doing your monthly budgeting.

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