Why Your Credit Card Declined? [Reasons And Prevention]

Introduction

Credit card declines are unpleasant and stressful. A card might be refused for several reasons, so don’t panic. Not having enough credit on the card or fraud warnings prohibiting new purchases are frequent issues.

Your card may be declined for reasons besides inadequate funds and Fraud. You can prevent many of them or lessen the likelihood of your card being denied at a restaurant or online.

What Should I Do If My Credit Card Declined?

First, double-check your entries. Call the card’s issuing bank or credit union if the issue persists. They may be able to diagnose and remedy the problem. If your credit card has troubles, have another method of payment ready.

Top Reasons Why Your Credit Card Was Declined

From human mistakes to malicious activities, your card may be denied. Here are some frequent answers.

1. Typographical Errors and Mistakes

Online shoppers must submit their debit card number, expiration date, CVV number, shipping address, and billing address. It’s complicated and prone to mistakes. Cross-check all the data before clicking the purchase button since any errors will result in a denied transaction.

When swiping, you must enter your 4-digit PIN. If not, the transaction will fail. Notably, you have limited tries. Multiple incorrect PNs restrict account access.

2. Your Significant Purchase Was Flagged as Fraud

Credit card issuers may flag your account if you go on a spending binge or make a major purchase. Similar to travel, unusual card behavior may activate fraud protection and cause your issuer to freeze your account, prompting a card denial.

Notifying your credit card issuer of expenditure changes prevents account locks. If you have more money to spend long-term, increasing your credit limit will let you spend more each month while maintaining your credit score. Just watch your balances.

3. Incorrect Payment Information

It’s simple to mistype a credit card number, expiry date, or security code while shopping online or through the mobile app. Or your billing address is outdated. All of them might cause a refused transaction. Verify your card details.

Too many errors might freeze your account. In such a situation, contact your issuer to clarify. If you have several billing addresses, double-check your information before submitting it. Notifying your issuer of address changes helps avoid Fraud.

4. Your Credit Limit has been Reached

You may find your credit limit in your cardmember agreement or contact your issuer. People with weak or no credit may have credit limitations of $500 or less, while those with great credit may have $20,000 or more limits.

Your purchase may be refused if it exceeds your credit limit. You should know each credit card’s credit limit and amount, so you don’t hit it before your monthly statement period expires. Ask your issuer for a greater credit limit if you’re often near the boundary.

Keep your credit use below 30% to maintain a decent credit score. If you’ve hit your limit, pay off debt before spending more. Consider shifting your debt to a low-interest card or taking a low-interest personal loan. Bankrate’s credit usage calculator can instantly calculate your ratio.

5. Missed Payments

Your issuer may limit your credit card usage if you’re late on payments. Call the issuer and explain the problem. They can help you get your account current.

Late payments generally result in late penalties and a penalty APR. Talk to your issuer if you’re missing payments due to financial difficulty. You may qualify for a reduced payment plan that lets you keep using the account.

6. An Expired or Deactivated Credit Card

Three to six months before your existing card expires, look for your replacement card. You don’t need to wait if you get it before expiry. Activate it immediately and destroy your old card. If you don’t get a replacement card, you’ll get a letter with payment choices.

Any changes the main cardholder makes to an account you’re an authorized user might affect your behavior. All cards on an invoice will be temporarily suspended if one is reported lost or stolen. This also happens when the main cardholder surpasses the credit limit or misses a payment. Authorized users may be impacted.

7. Technical Issues

A card may not operate due to the bank or merchant’s technical difficulties, such as a sluggish internet connection, power loss, or processing delays. In such instances, withdraw cash from an ATM.

8. Make a Purchase While Traveling

Using your credit card while abroad may raise a red signal with your provider. Banks and card issuers consider many transactions in a short time as a symptom of card theft.

Your issuer may freeze your account to safeguard your information. If this occurs while traveling, you may phone your issuer to let them know the transactions are acceptable, but telling them ahead of time is preferable.

9. There’s a Hold on Your Card

Credit card holds may make large transactions difficult. Car rental firms and motels may retain your credit card for a few days after check-out or vehicle return.

Make sure your credit card can handle several holds. Pending holds take time to charge or fall off your statement. Contacting your issuer or retailer may remove it, but patience is typically required. Consider using one card for reserving your accommodation and transportation and another for everyday expenditures.

How to Prevent Your Credit Card From Getting Declined

Many card declines are avoided if you handle your credit accounts proactively. Sokunbi suggests monitoring your credit card activity and contacting your issuer if you see anything suspect. Here are several ways to prevent future card declines:

Stay Below Your Credit Limit: Avoid a denied card and hit your credit score by not maxing out your card. Regularly monitor your expenditures to avoid reaching your credit limit.

Sign up for Account Alerts: Many issuers provide SMS or email notifications about unusual account activity, so you can avoid using your card if Fraud is attempted. Balance and expenditure alerts are available.

Pay Your Balance on Time and in Full Every Month: Good credit habits reduce the likelihood of your card being refused for late payments or going over the limit and increase your credit score.

Be Aware of the Card’s Expiration Date: Credit cards expire after a few years. If your card is expiring, contact your issuer for a replacement.

Notify Your Issuer of Your Travel Plans in Advance: A call to your issuer before you go will simplify making purchases in the U.S. and overseas.

What Can I Do to Avoid Blocking?

Merchants utilize blocks to ensure bill payment. This affects your credit or cash. If you’re approaching your credit limit or have a low bank account balance when a block is imposed, your card may be refused. You can minimize the hassle.

1. Discuss Blocking

When you check into a hotel or hire a vehicle, inquire whether your card will be blocked.

Block size
Why that amount?
Block how long?

2. Reduce Card Blocking

You are using the same card to pay a “blocked” charge. If you pay with another card, cash, or check, the ban may last 15 days. The card issuer doesn’t know how you paid.

Ask when the previous block will be lifted when you pay or check out.
Remind the front desk if you use a different card, cash, or cheque.

Bank or credit union? If you have or are contemplating a credit or debit card, ask the bank or credit union:

Do companies get blocks?
Blocks, how long?
Who can buy blocks? Shop around for credit or debit cards. Compare offers using shorter chunks.

For debit cards, seek a bank or credit union overdraft line of credit. This is a check-based loan. The overdraft line of credit helps prevent bouncing checks or having your debit card denied.

[Read More – What Does a 750 Credit Score Mean?]

Conclusion

Spend below your credit limit, pay off your amount every month, and tell your issuer of your trip intentions. Managing your card account and contacting your issuer requires modest actions. Sometimes calling your issuer may authorize a genuine transaction they classified as Fraud. The increase the security isn’t harming anybody, despite being inconvenient.