Why Is My Credit Card Being Declined?

If your credit card has been declined, you may be wondering why. As it turns out, there are many reasons that a credit card provider may elect to decline a transaction, ranging from suspected fraud to card expiration date and more.

For those asking themselves, “Why is my credit card being declined?” it helps to contemplate a variety of factors that may have led to an incomplete transaction. By considering each in turn, you can get to the root of the concern – and take the steps needed to restore your credit card to proper working order.

What Does It Mean When A Credit Card Is Declined?

When a credit card is declined, it means that the financial provider who backs your card either declined to provide funds for the transaction or that the transaction was unable to be completed.

Don’t take it personally when this happens, either: Many potential variables, from the reliability of a retailer’s Internet connection to how well their card reader is functioning, can impact whether a credit card purchase goes through. Read on to learn more reasons why your card may have been declined and how you can prevent it from happening again.

6 Reasons Why Your Credit Card Was Declined

As noted, any number of hiccups and errors can cause your credit card to be declined. Several of the most common concerns encountered include the following.

1.     You Made A Typo Error

Entering even a single digit incorrectly when inputting your credit card number, expiration date or security code can cause a credit card transaction to stall and not go through. That’s because credit card providers and merchants are constantly on the lookout for fraud and identity theft, making it important that you double-check all information before providing it. Common errors that credit card holders typically make when inputting key details include:

• Incorrect account number
• Incorrect expiration date
• Wrong CVV number (security code)
• Wrong billing address

2.     You’ve Reached Your Spending Limit

Every credit card comes with a spending limit – a cap that financial providers have placed on how much credit they are willing to extend. If you rack up enough charges on your card to reach this spending limit, it could result in a declined credit card. Should this occur, you will not be able to borrow any more money once this limit is reached and your card will be maxed out.

If you consistently push your spending limit – and especially if you don’t make timely payments – it can damage your credit score. Bearing this in mind, it pays to keep a close eye on money management. Doubly so, as it pays to not exceed a 30% credit utilization ratio, it’s worth noting that potential lenders will consider this figure when determining whether to extend you credit and loans. It can also impact how much interest they will look to charge you for doing so.

3.     You’ve Fallen Behind On Payments

Falling behind on payments and failing to keep up with bills may cause your financial provider to decline a credit card transaction. It’s best to remain timely with payments to avoid encountering this situation, which (if left unaddressed) can impact your credit history and credit score. Should you routinely do so and consistently exceed your credit card’s grace period, concerns will be reported to credit bureaus. It’s important to budget accordingly for any upcoming expenses and track payment dates so as not to accidentally miss a deadline or expense, as missed payments can affect your credit overall.

4.     There’s Been Fraudulent Activity Flagged On The Account

Identity theft is one of the fastest growing financial crimes worldwide, and credit card providers are always on guard against it. Noting this, any fraudulent activity that’s flagged on your account could raise a security concern and result in a declined credit card. Activities that may raise credit card providers’ suspicion include out of the ordinary spending, traveling to a new location without notifying your card issuer and making uncommon or uncharacteristically large purchases.

5.     Your Credit Card Has Expired Or The Account Has Been Closed

Credit cards are only cleared for use until they reach a predetermined expiration date, prior to which your financial provider should alert you and send you a new card. Trying to use an expired card will result in your credit card being declined. Likewise, if you don’t typically use your credit card or haven’t kept a close eye on billings, you may be unaware that your credit card has been canceled or the account has been closed after a long period of inactivity.

6.     There Is A Large Transaction Pending

Pending transactions are billings charged to your credit card by a merchant for which funds have been set aside but not yet paid out of your account. Even if you have the necessary funds available to make additional purchases, any large purchases may be flagged for security confirmation by your credit card provider until approved. Similarly, rental car providers and hotels may place a temporary credit line hold (as insurance against incidental damages) in the form of a pending transaction on your card as well. These transactions may cause you to bump closer against your spending limit than you’d realized.

What Can I Do After My Credit Card Is Declined?

While it may be exasperating when your credit card is declined (or declined repeatedly), remember: Not all such scenarios necessarily have anything to do with your actual spending ability, and there are steps that you can take to remedy the situation.

Stay Calm

Having your credit card declined can feel frustrating and embarrassing, especially if it’s declined while you are in the company of others. But like any other common problem, it helps to remember that the situation is just a puzzle waiting to be solved. If you don’t have another payment option readily available (the easiest way to remedy the situation and determine if issues are being caused by connectivity concerns or a faulty card reader), remain polite and don’t be embarrassed. Step out of line, review the action items below, give your credit card company a call and come back when the issue is resolved.

Review Your Information

Ask yourself: Did you correctly input all information? Are you entering an accurate credit card number, security code and billing address? Is it possible you made a typo? It’s important to review your information to make sure that all details have been correctly entered.

Contact Your Credit Card Company

Should an issue arise, it’s important to promptly give your credit card company a call. Once you’ve verified your identity, explain the situation and work with them to resolve the issue. Remember: Customer service representatives are standing by, ready to help – and ready to verify that the issue has nothing to do with your account or spending ability.

How To Prevent Your Credit Card From Being Declined

There are several steps you can take that can help you prevent your credit card from being declined in the future.

Set Up Account Alerts

Cardholders enjoy the option to receive automatic alerts when potential identity theft, fraudulent activity or suspicious purchases are encountered. You’ll want to update your contact information and activate these features so you can stay on top of any concerns. Likewise, if you plan to travel in the near future, especially to an international destination, it’s also important to notify your card provider in advance so they don’t flag purchases made on the trip as potential security concerns.

Stay On Top Of Your Payments

Creating a monthly personal budget and sticking to it is important. To make sure you don’t miss any payments or deadlines, you can also set up and configure automatic bill payment options as well. If you routinely find yourself running up against your spending limit, you may also wish to consider asking for a credit limit increase (which can help boost the maximum amount you can spend on the card) if you’re in good financial standing.

Carry Additional Payment Methods

As individual cards are prone to hiccups, glitches and errors, it’s important to carry additional payment methods with you at all times. This may include keeping more than one credit card or debit card on hand when you head out to make purchases. You might also wish to set up mobile and online payment solutions, which allow you to pay via a smartphone application.

The Bottom Line: You Can Prevent Your Credit Card From Being Declined

Been there, done that: We’ve all had credit cards declined for one reason or another at some point in time.

Reasons for these issues are manifold, ranging from issues with retailers’ card reader connections to concerns with spending limits and suspected fraudulent activity.

Should your credit card be declined, don’t take it personally, and don’t freak out – taking a few simple action steps can help you get to the root of the problem and resolve any issues. That said, it always pays to keep alternate payment options in hand, just in case it takes some time to get ahold of your credit card provider and get potential concerns sorted out.

Pro tip: If you’re having challenges making monthly credit card payments, you can also prevent your card from being declined by consolidating your credit card debt into a lower payment options with a personal loan.