When you swipe your credit card, the terminal at the store makes a request of your bank, and your bank has only a few seconds to accept or reject the transaction. Once the transaction is accepted by your bank, it appears in the Pending transactions.
At the end of the business day, the store submits all of the final transactions for the day to their bank in a batch, and the banks all trade transactions in a batch, and money is sent between banks. This is the process that takes a couple of days, and after this happens, you see the transaction move from your Pending transactions into the regular transactions area.
Most of the time, the pending transaction and the final transaction are the same. However, there are cases where it is different. A couple of examples:
- Pay-at-the-pump fuel is authorized before it is known how much gas you will be pumping. So the pending transaction is typically for a high amount, and the final transaction contains the actual cost of the fuel pumped.
- A restaurant authorizes the transaction before you enter a tip amount, changing the total of the final transaction.
With a credit account, the fact that the final amount is not known for a few days is no big deal: after all, you don't have any money in the account, and if you end up spending more than you have, the bank will happily let you take your time coming up with the money (at a steep cost, of course).
With a debit card tied to your checking account, the transaction is handled the same way, as far is the store is concerned. However, your bank is not going to run the risk of you overdrawing your checking account. They also are not going to run the risk of you withdrawing money from your account that is needed to cover pending transactions. So they usually treat these pending transactions as final transactions, deducting the pending transaction from your account balance immediately. When the final transaction comes through, they adjust the transaction, and your balance goes up or down accordingly.
This is one of the big drawbacks to using a debit card, in my opinion. If a bad pending transaction comes through, you are out this money until it gets straightened out.
