Having your credit card declined can be embarrassing, especially if you don't have any other form of payment on hand.
There are seven reasons why your card may have been declined. Read on to learn more about each and what you can do about it.
1. You've Reached Your Credit Limit
The simplest explanation for having your credit card declined is that you simply don't have enough available credit to make the purchase. This can especially be a problem if you have a low credit limit.
Some credit card issuers allow you to go over your credit limit but will charge a fee if you do it. As such, it's always a good idea to stay well below your credit limit to avoid potential embarrassment or fees.
Using less of your available credit can also help improve your credit scores. Most experts recommend using less than 30% of your credit limit at any given time. But the lower, the better.
If your credit limit is just a few hundred dollars, however, that can be tough. Consider requesting a credit limit increase to give you some more breathing room. There's no guarantee you'll get what you want, but if your credit is better than when you first got the card, you could qualify for a higher limit.
Another reason you may be at your credit card limit is if you continuously have a high credit card balance. Taking steps to pay down credit card debt will benefit you in many ways—including higher credit scores and paying less money in interest.
2. Your Purchase Was Flagged as Fraud
Credit card fraud is the most common form of identity theft, and card issuers are always improving their ability to spot unauthorized charges.
Unfortunately, this sometimes backfires when you're traveling internationally or using your card in a way you don't normally use it.
If you have your credit card declined like this for a legitimate purchase, it can be frustrating. When it happens, you can call the number on the back of your card to clear things up. But if you're overseas or otherwise don't have access to call your credit card issuer, it's essential to have a backup plan.
In other words, have at least one or two other payment methods in your wallet in case your credit card gets declined. This can be a second credit card, a debit card, a prepaid debit card or cash.
Also, let your card issuer know where you're going before you leave on an international trip. This can help you avoid having your credit card declined because you're not close to home.
You can also often set up text alerts with your bank or credit card issuer so you can easily confirm if something is or isn't fraud.
3. You Have a Large Pending Transaction
If you haven't maxed out your credit card, it's still possible to have your credit card declined because your balance is too high.
This can happen if a car rental company, hotel, gas station or other merchant puts a hold on your credit card. These holds are common with such merchants because they want to be sure that your card won't get declined when they charge the full balance you owe.
The problem is that it can take a while for a hold to drop out of your pending transactions; it can even linger after the real charge has hit your account.
You can try to call the credit card issuer or the merchant that placed the hold to get it removed. But sometimes you just have to wait until it falls off.
4. You Entered the Wrong Information
If you're shopping online and have your credit card declined, it could be because of a typo on your part. Between your 15- or 16-digit card number, your expiration date and your security code (CVV code), it's possible that you transposed some numbers incorrectly or fat-fingered a digit.
If your card is declined, double-check to make sure that you entered all of your card information correctly. Do the same if you're giving your card information to someone over the phone who is trying to process a payment for you.
5. You're Behind on Payments
If it's been a while since you've made a payment on your credit card, it's not in the card issuer's best interests to continue allowing you to use it. What's more, having a late payment on a credit card can damage your credit.
In a case like this, call the issuer to find out what you need to do to get your purchasing privileges back.
In general, you'll need to get current on your payments. But if you're experiencing financial hardship, the issuer may allow you to use the card again if you get on a modified payment plan.
6. Your Credit Card is Expired
Credit card issuers are typically proactive about sending you a new credit card in the month or two before your current one expires.
But if you've moved and didn't update your address or the new card hasn't made it to you yet, you won't be able to use your account until you get a new card with a new expiration date.
If you have moved, log into your online account to make sure that your address is up-to-date. Then contact the credit card issuer to request a new replacement card sent to your current address.
If your address is current on your account and you still haven't received the card, call the card issuer to verify when the replacement card was sent.
If it was recent, you might just need to wait a few more days. But if it's been a while, the card may have been lost in the mail or stolen. Request a new replacement card and keep an eye on your account for unauthorized purchases.
7. Your Card Account Has Been Closed Without Your Knowledge
There are several reasons a credit card issuer might choose to close your credit card account. For example, card issuers keep tabs on your credit report even after you first get approved.
If it determines that you've become a risky borrower, it could preemptively close your account to avoid potential losses. Other common reasons include:
- You haven't used your card in a long time, and there's no balance.
- You've broken the terms of the card agreement.
- You're an authorized user on the account and the primary cardholder has removed your card from the account.
- Your account was closed by mistake.
You won't know if this is the reason your credit card was denied, so you'll need to call the card issuer to find out what's going on.
Depending on the reason, it may be possible to plead your case. But if the card issuer won't budge, you'll need to rely on one of your other payment methods.
Always Have a Backup
Having your credit card declined likely won't happen often. But it's still a good idea to have a backup credit card handy, or at least a debit card or cash in case it does.
Also, be sure to keep an eye on your balance to avoid getting denied for credit limit reasons, and always try to pay your balance on time and in full each month.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer, or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.