Actually, an authorization does remove available funds from a credit card's available credit line. That's the whole point of an authorization: it "reserves" that amount of money for the merchant's use (whether the merchant posts the charge at the close of that business day when processing the batch or whether it is processed a week later when the customer checks out or returns their car).

When doing training with new employees, I often use my card for test authorizations so they can see how the process works. After four or five test rentals, I have gone into my card to see my available credit is now $1,000 lower. (My BofA AS Signature card takes it one step further and actually shows the pending charges itemized separately.)]

Also, there is little to no way for a merchant to "release the authorization" at check-out. An authorization is valid for a time period specified by the card-issuing bank. For my BofA Visa, unclaimed authorizations tend to fall off in about a week. It varies by card-issuing bank--some release it in just a couple of days, whereas others hold onto it for up to 30 days.

Regardless of the card-issuing bank's policy, a merchant generally has (by right of the merchant agreement they have signed with their acquiring bank--merchants only have agreements with their merchant banks, not with any cardholder banks) up to 30 days to claim funds from an unused authorization. (This can cause issues for cardholders: if an authorization "expires" and the funds are released back into the cardholder's available credit, and the cardholder subsequently maxes out his card, the rental agency/hotel can still submit a charge against that authorization after the cardholder has maxed out the card, which would then cause the cardholder to go over his/her limit [and incur associated overlimit fees/penalties]).

In any case, most car/hotel authorizations are, in effect, released--because the merchant submits a charge against the authorization at the close of the transaction. A few days later, when that charge makes it through all of the interchange networks and back to the card-issuing bank, the card-issuing bank sees that a $125 charge was posted against the $325 authorization #03225C. At that time, most banks will reconcile those two things together and convert the authorization into the charge, releasing the extra $200. I have seen a few banks continue to hold the $200 difference out of the customer's available credit until the authorization expires, however.

But--in the case of a prepaid transaction, where the merchant places an authorization on the customer's card that may never be used (assuming no incidental charges come up), that authorization just floats out there in cyberspace until the card-issuing bank decides to expire it. The merchant has very little control over that authorization once it has been made. If this causes an issue for a cardholder, the merchant has a couple of options:

• Process a $1 charge against the authorization and subsequent $1 refund to cause the bank to release the authorization, but this will take several business days to work through the system
• Contact the cardholder's bank directly and attempt to have them void the authorization (some banks make this difficult, and there is no standard procedure--some will accept the merchant's request over the phone, some will require a fax on company letterhead, and others simply won't do it at all)
• Some Point-Of-Sale systems--but not all--allow the merchant to manually release an authorization through the Visa network only, but only Visa--MasterCard, American Express, and Discover do not have this functionality [actually, rather than delete the authorization, the POS software requests that Visa change the authorization amount to $1]

Because of the difficulty, most RACs (and, I would assume, hotels) just leave the authorization out to expire. Given that it's a relatively small number of people who walk out with an unclaimed authorization and only a fraction of those people are affected by the loss of access to credit, it's not worth the hassle. If someone has need for the authorization to be released, they can contact the merchant and have the merchant try the above methods to void the authorization--but that is a relatively rare occurrence (I would estimate it's less than 1% of total transactions).

Regarding debit cards: from a purely technical standpoint, they function pretty much like credit cards, with one exception: banks usually only retain unclaimed authorizations for a couple of business days. While the merchant can still claim funds against an authorization up to 30 days later, people who have only debit (and no credit) cards also tend to be living paycheck to paycheck and have a small buffer in their accounts--meaning overdrafts due to expired authorizations are a definite possibility.

Add in most peoples' unfamiliarity with the concept of an "authorization" (they think that money is pulled out of a credit card or debit card instantaneously) and lack of attention to the difference between the "balance" and "available" columns on their online banking page, and now all of a sudden, the merchant is the recipient of angry phone calls claiming that the merchant caused the customer to overdraft or that the merchant held onto funds too long or whatever and that the merchant should pay the customer's NSF fees. (Believe me--I've been on the receiving end of those calls.)

So, many merchants in this sector (who even accept debit cards at all) have developed a policy with debit cards: CHARGE the deposit (don't just authorize it) and refund the money when the transaction is done. While refunds can take awhile to post, at least this way, the customer knows up front just exactly how much is being held and cannot complain about confusion over nebulous authorizations that may or may not even be visible.

Both because debit cards cause customer service issues ("What?! You're going to hold $500 of my hard-earned money?!) and because they are an indicator of risky customers (i.e. people with bad credit), many agencies simply don't accept them as collateral for a $30,000 vehicle--a wise, IMHO, course of action.

As for PL's vendor agreements regarding credit/debit card acceptance and deposit amounts, I can't speak to that because we don't do business with the opaque side of PL/HW. Were I to guess, though, I would guess that PL opaque customers are at least slightly more risky than full retail customers, simply because being someone looking to save money tends to also be someone who has less money (not always, but usually). Someone on an expense account or with a Centurion card and whose time is more valuable than money likely has the resources to pay for incidentals, whereas someone who is looking to spend $35 on a motel room probably has fewer liquid assets floating around.

While it may be against PL's vendor agreement and may not even be supported by factual data, I can definitely see the OP's hotel owner's line of thought.

A related question: if a hotel's standard policy is to authorize $200 on every guest's card (regardless of booking method), is that hotel still held to Priceline's requirement to only authorize $100? That would be one thing that would potentially turn me off from accepting PL bookings.