If you check your bank statements online, you may notice that some of your transactions are listed as "pending" rather than "complete." If a transaction is pending, the bank has not yet approved the transaction. Most banks provide you with an available account balance, which reflects your balance minus any transactions that are still pending. Base purchasing decisions on your available balance rather than your entire balance so that you do not accidentally overdraw your account due to pending transactions.
When you deposit a check into the bank, it often takes one or more business days to clear. The bank must verify funds with the bank the check is drawn on and electronically transfer the money into your account. If you deposit a large check such as an inheritance check, it may take up to a week to confirm the funds. If a deposit is pending, do not spend it. Your bank will charge you an overdraft fee if you spend more money than is currently available in your account, even if you will have the funds once your deposit clears.
Debit Card Transactions
When you pay for merchandise with a debit card, sometimes your bank takes a day or two to approve the transaction. The bank "reserves" funds while it is approving the transaction, meaning that it puts the amount you paid on hold so that you cannot access it. Thus, your bank balance reflects the transaction immediately even though it might take a few days to complete.
Hotels and rental car businesses often use a credit card to hold a reservation for you. The business owner puts the amount of your deposit on hold on your debit card but does not officially charge you until you arrive at the hotel or car lot. If you pay using cash, the business owner cancels the transaction on your card, which releases the funds back into your account. If you choose to use your debit card for your final payment, the business owner will charge the transaction to your card. While your card is holding the reservation, the bank lists the reservation amount as a pending transaction.
Pending transactions affect your available bank balance. If you use automatic drafts to pay your bills, you can run into trouble if a pending deposit does not clear prior to the date your creditor debits your account. In addition, you may get confused about how much money is in your account if your online statements do not reflect pending transactions. Always keep track of your deposits, withdrawals and balance as you deposit funds or pay for items; do not rely on online statements to tell you how much money you have in the bank.