Having a credit card declined is one of those things in life that’s just plain uncomfortable. There you are, standing in line to buy something, and you’re told your credit card is declined. And if a long line of customers is behind you, then your level of discomfort is likely to double – or even triple.
When it happens, you can weather this uncomfortable situation with grace and aplomb. If you think you didn’t insert your card’s chip properly and want to try again, that’s fine. But if your card is declined a second time, your choices are limited to the other cards (or cash) you’re carrying at the moment.
If you don’t have a backup, stay calm. You can ask the merchant if you can put the items on hold until you can return with a different credit card or even a debit card. As soon as you get home, call your issuer to find out why it happened.
Chances are, your credit card was declined due to one of the following seven reasons.
7 Reasons Your Credit Card Was Declined
Fortunately, there’s a limited number of reasons your credit card was declined. Some are easy to fix, but others will take a little bit of digging, as well as some patience, to sort out.
1. Your Credit Card Has Expired
It still pays to open the (snail) mail. But if you’re behind with your personal paperwork, your new card could be sitting in your home somewhere.
If your new card isn’t anywhere to be found, it could be lost in the mail or stolen. You need to call your issuer right away and report that you haven’t received the card.
While you’re on the phone, confirm that your issuer is sending you a new card. And start opening your mail every day!
2. Your Account Was Flagged for Fraud
There’s a variety of reasons this can happen. Obviously, it could indicate that your credit card issuer knows your account has been compromised. Always call your issuer quickly to determine what has happened.
It’s also possible that your card was flagged because of what the issuer considers “suspicious activity.” This could mean that your card was used to purchase an item in an unusual location. For instance, if you live in Boston and you suddenly make a purchase in Bangkok, your issuer might worry you’ve been hacked.
To prevent your card from being flagged for fraud, let your issuer know when you’ll be traveling away from your normal haunts. Having your card declined is uncomfortable, but losing access to your credit card when you’re a long way from home is enough to ruin a trip.
3. Your Card Doesn’t Have Enough Available Credit
Sometimes, this is an innocent mistake. You used your card to hold a reservation, and a portion of your credit limit is still on hold.
But if you’ve actually maxed out your credit card, that’s more difficult to resolve. If you didn’t opt in to over-the-limit fees, then when you try to buy something that exceeds your credit limit, your card will be rejected.
And, trust me, that’s a mercy rejection. If you’ve used up your available credit, it’s way past time to step away from your credit card.
Check the balance on your credit card statement and determine how this happened. If this is a temporary problem, call your issuer and talk to the hardship department. Someone there might be able to help you on a short-term basis, which could mean a reduced annual percentage rate or lower minimum payments for a year.
4. Your Credit Card Payment Is Past Due
This can happen because of poor money management or insufficient cash flow. The key is finding the root cause so you know how it happened. Sometimes, setting a budget and tracking your spending takes care of sloppy payment habits.
But if it’s a cash flow issue, you need to go through your budget and cut some expenses, even if just temporarily. Call your issuer to report that you’re catching up on your payments. If you get current with your account in less than 60 days from the due date, your late payment may not be reported to the credit bureaus.
5. You Charged an Extra-Large Purchase
This is an interesting one because it can happen even if you have more than enough available credit for your purchase. This is similar to making a purchase while on a faraway trip.
Unless you make large purchases often, this type of transaction is outside of your routine. Your issuer could worry that someone has stolen your account numbers or your physical card and has gone on a shopping spree.
If you plan to charge an expensive item, such as a used car, call your issuer beforehand. Then the issuer will know the purchase is legit when you request authorization.
6. You Entered the Wrong Account Information
I actually did this a few years ago when I decided to do my Black Friday shopping online. I wanted a new leather jacket, but only if I could get one for half-price. I’d already picked out the one I wanted and was just waiting for the discount early on Black Friday morning.
Only one was left in my size, and I panicked. I typed so fast that I entered the wrong account number. I realized my error and, fortunately, still got the jacket.
It’s also easy to key in your security code (also known as the CVV number) wrong if you’re in a hurry. If you’re sure you haven’t made a typing error and your card is still being declined, then call your issuer and ask why your card was blocked online.
7. Your Credit Card Issuer Closed Your Credit Card Account
Credit card issuers aren’t required to notify you if they decide to close your account. So it’s possible your card was rejected because it’s been closed without your knowledge.
If you haven’t used the card for some time, an issuer might close your account due to inactivity or after a big drop in your credit score. Call your issuer and ask why your account was closed. It’s also possible that the account was closed in error, so it pays to follow up with the credit card company.
It can also happen if you’re an authorized user on someone else’s account. The primary cardholder could decide to remove you from the account. It’s important to stay in touch with the primary cardholder so you aren’t surprised by any actions the person takes.
What to Do When You Get Home
You need to call your issuer as soon as you can and find out why your credit card was declined. You might be told that your new credit card was mailed to you last month. Or, if fraud is suspected, you might be asked to verify purchases before your card can be used again.
Sometimes, it’s more complicated than having an expired card or a false fraud alert. If you’ve missed a payment, get your account back in good standing before it damages your credit.
Whatever the issue, be sure you stay on top of the situation until it’s resolved.
How to Prevent Your Card From Being Declined
There’s no way to guarantee that you’ll never have to suffer such an embarrassment again. But if you pay attention to just a few things, you can certainly decrease the odds of it happening.
- Keep low balances: Your credit utilization ratio is the amount of credit you’ve used compared with the amount you have available. You should keep your ratio under 30%, or your credit score will suffer. If you don’t pay attention to your utilization ratio, you could end up maxing out your card. That can result in getting your card declined because your purchase exceeds your available credit.
- Pay bills on time: Use a budget and track your expenses. Set up email and text reminders so you don’t make late payments. Making late payments not only can result in having your card declined, but it will also decrease your credit score. The higher your score, the bigger the drop.
- Notify your issuer when you travel: If your issuer knows you’re in Europe, a purchase in Italy won’t be a red flag for fraud.
- Make your issuer aware of large purchases: Let’s say you’re using a rewards card to pay for your new refrigerator. If a large expense is way outside the lines of your normal patterns, the issuer might flag your account for suspicion of fraud.
- Pay attention to notices from your issuer: I know it’s difficult to keep track of the many ways you get messages these days. But do read messages and alerts from your credit card company.