Top 8 reasons credit cards get declined

You’re at the register, ready to make your purchase. You present your credit card, and you wait. You wait a long time. And then you get the dreaded message – your credit card has been declined.

You know it’s something that happens. But when it happens to you, it’s frustrating, embarrassing and – if you don’t have an alternate form of payment, it can be a huge hassle.

Knowing why your credit card was declined, and the steps you can take to prevent it in the future will help ensure your next transaction goes through without a hitch.


Top 8 reasons credit cards get declined


1. You’re making purchases while traveling

If you use your credit card to make a purchase while traveling – even buying something as harmless as a new set of bed sheets – simply doing so in a different city could cause an issue. Logging a lot of credit card activity in different locations (whether international or domestic) raises a red flag to credit card issuers that your card could be stolen. And it could result in getting you locked out of your accounts.

Safety tip: Call your issuer before your trip

To avoid losing access to funds while traveling, notify your bank and credit card issuers of your travel plans. A quick preemptive call at the number on the back of your card will save you the headache later.

2. Your large purchase triggered fraud protection

If you happen to go on a spending spree or make an inordinate purchase, your credit card issuer may get an alert. Any card activity that’s outside of the ordinary triggers fraud protection, and may get your card declined.

Safety tip: Request a credit limit increase

As with travel, simply notifying your credit card issuer of your spending changes helps to fend off account locks. Also, requesting a credit limit increase so you can make larger purchases while preserving your credit score also helps.

3. You’ve reached your credit limit

Your credit limit is the amount of credit your issuer agrees to extend to you. Cards for people who are new to using credit or who have poor credit may have low limits of $500 or less – while top tier cards may allow close to $20,000.

If your credit card purchase exceeds your credit limit, your purchase may be denied.

Safety tip: Keep track of your available balance

It’s a good idea to keep your balance at 30-50 percent of your credit limit. If you’ve reached your limit, you can pay down your debt, transfer your balance to another card or request a credit limit increase.

Keep in mind, a credit card issuer can reduce your credit limit if your credit score has dropped or you’ve continuously missed payments. But they have to give you 45 days notice before making a change.

4. You’ve entered incorrect payment information

When attempting to make your purchase, you may have entered your credit card number, expiration date or security code incorrectly. Or perhaps your billing address is outdated, which can also lead to a declined transaction. Too many accidents like these can put a freeze your account.

Safety tip: Enter data with care and keep information current

Enter your information carefully and review before hitting submit, especially if you have multiple billing addresses. If you’ve recently changed addresses but forgot to notify your creditor, do so immediately. This helps prevent fraud.

5. You’ve missed credit card payments

If it’s the first time you’ve missed a payment, your issuer may extend a grace period of up to two billing cycles before freezing your account. But if you have a history of missed payments, you may find your card getting declined, even if you’re just a few days past your due date.

Safety tip: Schedule automated payments

In some cases, you may be able to make a payment on your phone while you’re in the store and finish your transaction. But setting up autopay can reduce the risk of missed payments.

Not only do missed payments make it impossible to use your card, they can also dramatically reduce your ability to qualify for the best rewards credit cards in the future.

6. Your card has expired

Maybe you forgot to check the expiration date, or you overlooked the new credit card in the mail you haven’t sorted yet. Trying to use an expired card is a sure way to have your transaction declined.

Safety tip: Activate your new card ASAP

Look for your new credit card in the mail as soon as three to six months before your previous card’s expiration date. Activate it as soon as you receive it, and destroy your old card. If you don’t receive a new card, you’ll get a letter that explains your options for paying off your remaining balance.

7. There’s a hold on your card

Rental car companies and hotels may put a hold on your credit card that isn’t lifted until a few days after check out, or you return the vehicle.

Safety tip: Account for holds when budgeting for travel

Be sure your credit card has enough available credit to accommodate multiple holds at the same time. Consider using one card for booking your hotel and transportation, and another for daily spending so you aren’t stressing the limits on one card.

8. The primary cardholder deactivates the card

If you’re an authorized user on an account, any change that the primary cardholder makes can affect your activity. For instance, if a card is reported lost or stolen, all cards on the account will be temporarily deactivated until new ones are issued.

Similarly, the primary cardholder may have reached the account credit limit or missed a payment, affecting the authorized user.

Safety tip: Communicate with the primary cardholder

When two or more people share one credit card account, it’s important to discuss card usage to avoid issues. If you’re an authorized user and your card gets declined, your first call should be to the primary cardholder. There may be a simple explanation for the snafu.

Bottom line

While it’s an annoyance, remember that in some cases, your card being declined may be a protective measure. In other cases, it can easily be solved with a phone call. Keep the lines of communication open, and you should enjoy uninterrupted card activity.