You’ve just finished loading your groceries onto the conveyor belt, excited to complete your purchase using your trusty credit card. But instead of the satisfying “approved” message, the cashier breaks the news that your card has been declined. Frustration sets in, but before you let it ruin your day, remember that there’s usually a reason behind the decline. Let’s explore some of the most common causes and what you can do to resolve them.
Most Common Reasons Your Credit Card is Declined
1. Incorrect Payment Information Provided
Sometimes, in the rush of online purchases, we accidentally enter the wrong credit card details. This is especially common when we have to manually input the information. Before clicking that final purchase button, double-check your card number, mailing address, authorization code, and any other details. Alternatively, if you have a virtual wallet, explore options like Apple Pay to bypass the need for re-entering your information.
2. Credit Limit Reached
Credit cards come with a limit, especially for those new to the game or those with secured credit cards. Hitting your limit after a few purchases is not uncommon. To avoid this, keep a close eye on your spending and utilization for that particular card. Aim to keep your utilization at 30% or lower, as it signals responsible credit usage to credit bureaus and issuers. Maxing out your credit limits or carrying a balance month to month could impact your credit score and hinder future credit limit increases.
3. Card Expiration
Credit cards come with an expiration date, and attempting to use an expired card will result in a decline. Similarly, if you’ve received a new card to replace an old one, the old card will deactivate after a specific period, even if it hasn’t expired yet. Ensure you activate your new card as per the instructions provided. Look for a sticker on the card with directions, such as a phone number or website. Activating your card ahead of time prevents any unexpected declines when you need to use it.
4. Failure to Activate Your Card
Forgetting to activate your new card will also lead to a declined transaction. Each time you receive a new card, it is essential to follow the activation process. Check the instructions that come with the card, often found on a sticker. It could include a phone number to call or a website link to visit. By activating your card promptly, you can avoid any potential declines when you’re ready to make a purchase.
5. Traveling outside Your Usual Area
Some credit card companies recommend notifying them when you plan to travel, whether domestically or internationally. This alert helps them distinguish genuine purchases in unfamiliar locations from potential fraud. While not mandatory for all credit card issuers, providing travel information can prevent unexpected declines while you’re away.
6. Making an Unusually Large Purchase
Your transaction history plays a role in determining whether a purchase is flagged as potential fraud. If you’re trying to make a significantly larger purchase than your usual spending pattern, your credit card issuer might decline it as a precaution. To avoid any setbacks during checkout, consider giving your credit card company a heads-up about your plans. Let them know in advance that you intend to make a substantial purchase to ensure a smooth transaction.
7. Chronic Late Payments
Continuously falling behind on payments or consistently making late payments can result in your credit card issuer freezing your account. This freeze prevents further purchases, even if you haven’t reached your credit limit. It’s crucial to make at least the minimum monthly payment to maintain a good standing with your card. Staying in good standing allows you to use your card as needed, while falling behind could limit your future purchasing power.
8. Inactive Account
Attempting to use a card that has been dormant for an extended period may result in a declined transaction. Issuers have the authority to close inactive accounts that haven’t been used for a certain number of months or years. To avoid unexpected account closures, set up your card for auto-payments on regular expenses, such as streaming subscriptions or phone bills. Pay off the card in full every month while maintaining some activity on the card. If your account does get closed accidentally, reach out to your issuer to resolve the issue.
What to Do When Your Card is Declined
When things don’t go as planned, it’s easy to feel flustered. Here’s what you can do to handle the situation smoothly:
-
Immediately try a new credit card: If you have another credit card available, use it to complete your transaction. This allows you to get your items and give your credit card issuer a call later. If you don’t have an alternative card or purposely want to use the declined one, you may need to abandon the purchase for now.
-
Call the credit card company: Dial the number on the back of your card and connect with your credit card company. Explain that you encountered a decline and seek clarification on the reason behind it.
-
Seek a resolution: Inquire with your issuer about the steps you can take to resolve the situation. This might involve making an immediate minimum payment or informing them of your location to verify the attempted purchase.
How to Prevent Credit Card Declines
Before your card faces another decline, adopt these preventive measures:
-
Set up account alerts: Utilize your credit card’s mobile app to receive regular notifications about your account activity. Stay informed and in control by setting up alerts for popular cards like the [card_name] or [card_name].
-
Make regular payments: Aim to pay off your balance in full each month to maintain good standing. If necessary, at least make the minimum payment each month. Automating your payments can help avoid missing any due dates, or consider adding payment reminders to your calendar.
-
Monitor your credit report: Regularly check your credit report using your credit issuer, bank, or any of the three major credit bureaus through AnnualCreditReport.com. Keep an eye out for any suspicious activities or errors and report them immediately. Regularly monitoring your credit score ensures you stay on top of any issues related to your cards.
Frequently Asked Questions (FAQs)
Can a credit card block increase the chances of having my credit card declined?
Yes, some car rental companies and hotels may place a block or hold on your credit card as a down payment or deposit. This action reduces the available credit on your card, which may come as a surprise when making a purchase. To avoid any surprises, inquire with the company about when the block will be lifted and how long it will remain in place.
Is it bad if your credit card is declined?
Experiencing a declined credit card can be frustrating, particularly if you have no other means of payment. However, it’s not always your fault. Sometimes, it could be due to the merchant or even the credit card issuer.
For more juicy financial tips and advice, visit Personal Finances Blog.