Hack-at-the-Pump – Tips for Buying Gas with a Debit Card

A couple nuggets I picked up while spending a year writing a custom credit card processing gateway from scratch (pro tip: avoid doing this if you can). Short Version is you should always walk inside and pay the attendant instead of paying at the pump, here’s why (long version):

First Tip – Have you ever pulled into the gas station on fumes, slid your trusty debit plastic into the pump payment area only to have it decline your card (knowing full well you’ve got a little bit – but not a ton – of fundage in there)? Here’s how the system works:

You’re bank account has exactly $20 in it and you want to buy $10 in gas. When you swipe your card at the pump, it contacts your bank to find out if you have the funds available, but there’s a catch. At the time you swipe, the machine has no idea how much you’re going to spend, so it will tell the bank you’re going to buy roughly a tankful of gas (which, as I write this, probably translates to anywhere between $80-$100) and ask if you have enough in your account to cover the transaction. Now, using our above example, you clearly don’t have enough cash to cover this.

If you find yourself dangerously low on gas (as well as cash in your checking account), try going inside and paying the attendant directly. This way, you have control over how much he tries to authorize your card for. This has saved my bacon on more Thursday nights than I care to remember…

Second tip – If you keep a tight leash on your spending (and who doesn’t), here’s something you ought to know. In the above situation, let’s say you actually have $300 in your checking account and pay for gas at the pump. When the pump authorizes your card for the full-tank amount (whether you buy that much or not), many banks will allocate that money out of your account for several hours (or even days, in some cases). In other words, the bank will make $100 unavailable to you, even if you spend only $10. The reason they do this is that they need to be sure that your account has sufficient funds to pay the merchant at the end of the day (when all authorizations are settled with the bank) – which could potentially be the full tank price.. Another fantastic reason to pay inside, every single time (unless you have so much money that it doesn’t matter).

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