Hotel deposit is usually charged upon check-in
Hotel deposit is usually charged upon check-in – Igor Alecsander (canva)

While traveling, you want everything to go as planned. You wouldn’t like a last-minute cancellation of your booking. The same perspective applies to hotels – they need to run their business smoothly and avoid extra costs, including unexpected cancellations, damages, and cost from guests. This is why a common practice is to charge travelers a hotel deposit.

The amount of hotel deposit is usually as much as a one-night stay rate. The typical charge for a hotel deposit is $100 for hotels that charge more than $100/night. This amount guarantees your reservation and gives the hotel more security in case of cancellation or damages.

In this article, you can find more information about how this works, what types of cards you can use to pay the deposit, and some policies that you can expect from hotels. You will even find tips on how to avoid paying a deposit and more.

What is a Hotel Deposit

The term ‘hotel deposit’ is sometimes confusing since it can refer to two things:

  1. An amount charged when you make a reservation to ensure that you’ll show up on check-in day. Not all hotels implement this.
  2. An amount charged when you’re checking in to cover possible damages or additional costs that occur during your stay. Most hotels implement this.

While the value of the deposit can vary, it is usually as much as a one night stay in the particular lodging. However, be aware that the amount can be lower or higher, depending on the particular hotel’s policy. For example, the hotel might charge you $100/night for hotel deposit upon check-in, but if later they found out that there’s damage in the room, they might hold up to $200/night until the matter is resolved.

The hotel will charge a deposit to your credit card, usually at the time of booking or a little bit later, but before your arrival (the one to secure your reservation). If the hotel only requires deposit to cover for damage, they might charge you during the check-in procedure. It is usually refunded at the moment of checkout if there is no damage to the room or flat you were renting.

The damage deposit is a type of safety bond between the renter and the owner of the property. Be sure to avoid hotels and lodgings that have information that the amount of the deposit can change at any time, as it might cause you trouble.

Be aware that if you have a fixed-rate loan associated with the bank of your credit card and you are penalized with a damage fee, you might get prepayment penalties on the loan rate.

Why Do Hotels Charge a Deposit Fee?

A deposit fee gives hotels some kind of security and limits eventual financial and property damages. One of the reasons why an accommodation owner can ask you for a deposit is to make sure that you are planning to appear at the lodging and pay for it. This prevents most people from canceling their reservation at the last minute. If a traveler decides to not go to the place, especially in the lower season, the hotel can be left without any income for that particular accommodation.

While hotels would like to trust that every person would treat their property with respect, the reality is a bit different. A security deposit can be used in case of any damage made to the lodging by the guest. That includes some serious damages such as breaking furniture, as well as small things, like petty stealing (for example towels or small appliances such as kettles).

Keep in mind not to confuse hotel deposit fee and hotel’s resort fee as each of them has a different purpose. You’ll get your hotel deposit back but won’t get a charged resort fee back. Find out more about in our article about hotel’s resort fee.

What Is An Advanced Deposit Hotel?

Advanced deposit hotel is a type of hotel that requires a deposit in order to ensure the reservation. This type of accommodation usually doesn’t refund the deposit and is used by people who want to book their holidays a lot of time in advance.

How Can I Avoid Paying My Hotel Deposit?

There are some hotels that don’t require a deposit from guests. You can search for that kind of accommodation or even contact a hotel that requires a deposit and ask if it is possible to waive that payment.

If you are traveling on a tight budget, a security deposit, even though refundable, can be a burden. Here are some tricks that can help you to waive a hotel deposit:

1. Call in advance to check with the hotels

Planning your trip way in advance? Call a few hotels and check if any of them offer accommodation without an advanced deposit. Book the one with the option to not pay the deposit.

2. Ask the hotel manager to waive the deposit

Already checking in? Ask the receptionist or hotel manager about the possibility to waive the deposit or include it somehow in the hotel bill. You might think that this won’t work, but the truth is that because of the huge competition in the market, many hotels are willing to accommodate customers the best they can.

3. Inform them that you won’t use any of the paid perks

One of the other reasons hotels ask for a deposit is to make sure that the guest won’t leave the property without paying for extra perks such as the bar, gym, spa, etc. If the hotel doesn’t have those perks or if you are able to convince the manager you won’t be using them, you might get out without paying the deposit.

4. Utilize travel insurance to cover possible damages

Travel insurance can be very helpful while traveling, including supporting waiving your deposit fee. Verify if your hotel accepts travel insurance – this type of insurance ensures that the accommodation owner will receive compensation in case of any damages.

Do All Hotels Ask for a Deposit?

Nowadays, most hotels require a security deposit. While you can find a few that don’t, you should better check their quality. Rent-by-the-hour spots or motels of low quality might not require an upfront payment and usually expect payment in cash. They also seldom ask for ID, which in the USA is mandatory. You might prefer to pay your deposit and enjoy your stay.

Paradoxically, other types of hotels that don’t ask for a deposit are very expensive, high-end establishments.

How Long Does A Hotel Hold Onto Your Deposit After You Have Checked Out?

The time that it takes for the deposit to get back to your account can vary from hotel to hotel. What is worth knowing is that hotels usually release the payment within 24 hours after the guest has checked out. Unfortunately, it can take up to one week to see the charges gone from your credit card account.

Before you blame the hotel, be aware that this prolonged waiting time is on the card issuer’s side. Each provider has their own standards regarding how long a charge like this can be pending on your account.

The hotel will notify you that the deposit is returned, but you might still see it as pending. In that situation, if you want to know how long you have to wait for the money or if the amount doesn’t come in when expected, contact your credit card provider.

Will I Get My Deposit Back?

As explained above, the main goal of a security deposit is for a hotel to have coverage in case of damage to a room by a guest. That means that in most cases the deposit will be returned to the traveler. You just have to leave your lodging in the state as you checked in, without damaging any property of the hotel.

Can I Book a Hotel Without a Credit Card?

While it is difficult to find a hotel that allows booking without a credit card, it is still possible. In major chains, for example, IHG, Choice, or Hilton, you can still pay for a deposit in cash on arrival.

The Booking.com website gives you the option to use the filter that allows you to search for accommodations that do not require a credit card (not always available). You can also use PayPal or a prepaid card.

Many people prefer to avoid credit cards, but it’s worth mentioning that if you choose the right provider, you might actually save some money and gain rewards.

Can I Use My Debit Card to Pay a Security Deposit for a Hotel?

Paying a hotel deposit with a credit card is a much more common and easier practice. However, if you do not have a credit card, you might still be able to work around it.

You might need to contact the hotel to discuss this option. Although some hotels give you a chance to pay with a debit card, you need to remember that in the case of using one, the money for the deposit won’t be marked as “on hold” as in a credit card case, but it will appear as a regular expense (money out). Only when the hotel sends it back to you, will it appear in your bank account.

Getting your deposit money back on your debit card might take much longer than on your credit card. You might need to wait for a return for up to 30 days.

Using Debit Card vs Credit Card: Summary

CategoryCredit CardDebit Card
Charging methodOn HoldMoney Out
Refund periodUp to 1 weekUp to 30 days
AcceptanceMost hotelsCertain hotels

Before You Enter and Exit Your Hotel

While you might feel tempted to just get your room key or leave your hotel as soon as your stay ends, it is worth remembering a few things that will help you to avoid unexpected fees, including losing a deposit.

1. Read Carefully Through the Cancellation Policies

In the case of high-end hotels, the amount for the deposit can add up quickly. If you are not sure if you can make it on time for check-in, be sure to carefully read the cancellation policies of the hotel of your choice. You might notice that most of them include a passage that informs guests that the deposit is non-refundable.

Hotels usually have stricter cancellation policies during peak season or when big events are happening in the area. Be sure to verify how long in advance you have to rebook your hotel or resign from the accommodation in order to avoid extra fees.

In case of booking through a third-party website, always make sure what their cancellation policies are, as they can be different from the hotel’s.

If you don’t have much experience using these third-party websites, check out our article on the best times to book a hotel. There are so many tips on finding great deals according to companies like Booking.com, Expedia, and more.

2. Ask about Any Additional Fees During Check In

Before you get your key, the person who deals with your booking should inform you about how much money they have “authorized” on your credit card regarding incidental purchases, such as using the mini-bar, Wi-Fi, and so on, and eventual damages.

A good hotel should disclose all that information when you book, so there shouldn’t be any surprises. You should also be informed about extra fees for using hotel facilities, for example, the sauna or fitness center, towels, toiletries, and so on.

3. Consider Using a Credit Card

While you might not be convinced to use a credit card while booking hotels, it might be a better idea. In the case of a credit card, the hotel merely has your money on hold. While using a debit card, they actually take a particular amount out of your account. Of course, if everything is alright, you will get your money back, but you must be aware that it will take some time.

4. Remember That Deposits Are Collected by the Hotel, Not the Booking Site

Booking sites are becoming more popular: they are easy to use and provide a comparison of many accommodations. However, you have to remember that they are not responsible for extra fees such as deposits. You might prepay for your room through a website, but most likely, the hotel will ask you for your credit card for incidental charges and extra fees.

5. Verify Your Documents and Bank Account Before Leaving

It can happen, mostly by accident, that the hotel makes a mistake on your bill. It can be a double charge for an item from the mini-bar, it can be an additional fee for something you never used, etc. If you spot those mistakes before checking out, you will save yourself a lot of hassle.

If extra charges go through your credit card, you will need to call the hotel, dispute the charges, and hope they will believe they are the ones who made the mistake. Plus, you will have to check your account to be sure all the accidental fees were refunded.

It’s tempting to just check in to your room and then quickly check out to go on with your trip. However, spending a little moment to have a look through the policies and checkout documents can save you a lot of trouble and money.

Now that you understand how hotel deposit works, utilize our top recommended list of hotel booking sites to secure yourself the best deal on your next trip.

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