How do pending transactions work? - NerdWallet Australia

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.

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

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.

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.

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.