How to Cancel a Pending Credit Card Transaction in Canada

Being the responsible cardholder that you are, you regularly check your account online, monitoring all transactions. Everything seems accurate until you notice a charge marked “pending.” Should you be worried? What is? And how can you cancel it?

In this article, we’ll review what this type of transaction is and whether you can cancel a pending credit card transaction in Canada. We will also walk through what happens if the charge posts anyway.

What are Pending Credit Card Transactions?

Before we can discuss cancelling a pending charge, we must understand the difference between pending vs posted credit card transactions. A pending transaction is a charge on your credit card that has been authorized by a merchant. Your credit card issuer has not yet finalized it, which essentially means that the charge is “in progress.” With this in mind, remember that charges you see here are only temporary. They don’t always post.

Common reasons for pending charges are hotel, gas station, and car rental holds. For example, when you check into a hotel, they often ask you to put down a credit card as a security deposit. The hotel chain can hold these funds until they are sure no extra charges apply to your stay. For example, if there is any damage to your room, the hotel can cash in your deposit.

A pending charge doesn’t show on your credit card balance, but it will take away from your credit limit. Once posted, though, it will reflect in your balance and show on your credit card statement. If it is dropped, then your credit limit will increase by that same amount.

Can You Stop a Pending Credit Card Transaction in Canada?

In short, no. You can’t cancel a pending transaction yourself. Pending charges are in the hands of the merchant, who controls them, and your credit card network, which processes them. Until the charge is either finalized and posted, or released, your bank doesn’t have the ability to delete it.

So, what can you do? The best way to proceed is by contacting the merchant immediately. You can ask them to either reverse the charge or not finalize it. If, for example, you have spotted a duplicate transaction, the business may be able to stop the authorization before it settles.

You can also wait and monitor the account closely. Some pending transactions will fall off automatically within a few business days. Or, if it gets posted, there are a few things you can do.

Steps to Take if You Spot a Problem

If you see a pending transaction that doesn’t look right, don’t panic. Most of the time these charges resolve themselves. But there are a few steps you can take to make sure you’re protected.

Step 1: Confirm the transaction

Pending charges may appear under an unfamiliar name. For example, the merchant name may vary, seeming suspicious at first. But it might be legitimate. Review your recent purchases and receipts before you assume the charge is incorrect.

Step 2: Contact the merchant

If you recognize the store, but not the amount, you can reach out to the merchant directly. If there is an issue with double-billing or a cancelled purchase, the business can often void or adjust the charges themselves.

Step 3: Call your bank or card issuer

If the merchant is unable or unwilling to adjust the charge, you can reach out to your bank. While they can’t cancel a pending charge, they can freeze your account to block further fraudulent activity. They can also mark the item for investigation once it gets posted, allowing you to take advantage of the credit card’s fraud protection.

Step 4: Keep documentation

Save your notes, emails, receipts and cancellation confirmations. Also, store any direct correspondence with the merchant. If the charge posts as is, having this evidence can help you make your case to the card issuer.

What if the Transaction Posts Anyway?

Sometimes, despite your best efforts, a pending charge may still post to your account. Should that happen to you, you still have options. The first thing to do is file a dispute with your credit card issuer. They can help whether you have issues with a duplicate charge or spot a transaction you didn’t make yourself.

If the transaction is fraudulent, be sure to ask your bank to review it and freeze your account. They can then cancel your current credit card and issue a new one. You can also use a credit card lock to prohibit transactions immediately.

The important thing here is speed. In Canada, generally, you must report any issues to your bank within 30 to 45 days of your statement date, depending on your issuer’s policy. Waiting too long means you may be out of luck on disputing the charge.

See Finly’s in depth guide on filing a credit card dispute in Canada for more information.

Conclusion

Pending credit card transactions are confusing, especially if you’ve never dealt with one before. But, in most cases, they drop off your account within a few business days or adjust before the final, posted charge. While you can’t cancel a pending charge yourself, you can contact the merchant and also, your bank, if need be.

The key to safeguarding your card is to monitor the account regularly and follow up if something looks off. Staying proactive can help you both protect your card and give you peace of mind.