Can a hotel charge my credit card without notification?

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Published on January 16, 2024 | 3 min read

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Woman in the hotel texting on smartphone

Back in November 2021, reader Lauren had a query about her hotel billing situation:

“I thought I’d start a new life in Oregon about two years ago and things haven’t gone quite like I planned. Unexpected costs, car repairs, illness, housing, etc. Been living in a motel and the manager has ran my credit card for the month without my knowledge or authorization two times now. The charge just appears one day. I told her the first time not to do that. I might want to use a different card. She did it again this month, I didn’t have enough in the account and now I’m overdrawn. Can she keep doing this?”
— LaurenBankrate reader

Lauren’s question remains relevant today, and so we’re revisiting this topic with updates since our initial publication.

No billing without permission

First of all, a business can’t charge your card without your permission. It would need to get your authorization first. This holds true whether you’re paying with your smartphone or for any other online card-not-present transaction. Hotels, extended-stay or otherwise, are no exception to this rule of no billing without permission, and it’s likely that the hotel obtained Lauren’s permission upfront to bill her card.

The FTC and “negative options”

There are sneaky ways that businesses can try to charge your card without your express permission, but authorities frown on such practices. For instance, the Federal Trade Commission advises that it runs afoul of the law “to bill people for negative options, automatic shipments or continuity programs without their express consent.”

A negative option refers to the practice of merchants automatically enrolling you into ongoing subscriptions or charges unless you take action to decline them or opt out. Examples of negative option transactions include:

A business that sends you periodic notices offering goods, such as books, and then follows up with sending and charging you for the goods because you didn’t refuse the offer.
A magazine subscription that’s automatically renewed when it expires unless you expressly cancel it.
A seller that offers a free or discounted trial period to try out a product or service, and then automatically bills you at a higher rate when the trial period ends.

Hotel payments and policies

Hotels are considered merchants and must get a cardholder’s consent before charging your card. Generally, hotels can authorize a temporary hold on your card at check-in that covers your expected hotel bill as well as a nominal amount for “incidentals.” If you avail yourself of the minibar snacks left invitingly in your room, for example, the additional hold covers what you’ve eaten. At checkout, If you’ve racked up more charges than the amount of the initial incidental hold, you’d make up this difference with your final bill.

In an extended-stay situation, the authorized hold that a hotel or motel places on your credit card typically “prepays” the period you expect to stay. It can also charge the card on file at periodic intervals by placing a hold on your card for the money due.

Changing your card on file

It sounds to me like Lauren’s hotel manager was acting legally, because the hotel would likely have gotten her authorization in advance — at the time she checked in — to place a hold on her card at periodic intervals for the amounts due. If you’re in this type of situation, you should talk to the hotel’s management and see if they can change the card on file for future payments.

Considering that this is an extended-stay hotel, if you’re not sure how long you’re staying or whether your credit card has enough credit available to cover the stay’s total charge, switch to a card that has an adequate line of credit to cover your anticipated stay. Otherwise, your card issuer could charge an overdraft fee for going over your credit limit, unless you’ve opted into overdraft protection.

The bottom line

Businesses cannot legally charge your credit card without authorization. Hotels will typically get your authorization to place a hold on your card for your stay at the time you check in, and they don’t need to notify you every time you’re charged. If you have an open-ended stay and are concerned that you don’t have adequate credit on the card you used to checked in, talk to your hotel management and switch to a different card. If you stay in hotels frequently, consider getting a co-branded hotel credit card or a travel rewards card that could at least bring down your overall hotel costs via points, miles or cash back.