Why Is My Credit Card Being Declined?

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Having your credit card declined can be frustrating, embarrassing and a little bewildering. When it happens, ideally you'll have a debit card or backup credit card to finish checking out. But once you're out of the store, it's a good idea to find out why your card didn't go through. The quickest way to do so is to contact your card issuer immediately.

Your credit card could get declined for a variety of reasons, from the simple (your credit card expired) to the potentially more serious and complex (potential fraud was detected). Here's why your card may have been rejected—and what you can do to prevent it from happening again.

1. You've Reached Your Credit Limit

If you've made several purchases on your credit card recently, you might have inadvertently maxed out your card. Some credit card companies give you a little leeway and will approve an over-the-limit charge so you're not declined in the store. However, they may charge a fee for the overage.

The risk of exceeding your credit limit is higher if you have a low credit card limit—say, a few hundred dollars. If that's the case, you may want to use the card for smaller purchases, such as your morning Starbucks fix or a streaming service subscription. That way, it'll be easier for you to pay off the balance each month and avoid hitting your credit limit.

There's another important reason to avoid maxing out your credit card: It'll help your credit scores. Credit utilization—how much of your available credit you're using—plays a significant role in your credit scores. Keeping your individual credit card balances, and your total credit card usage, under 30% of your available limit will keep your utilization low, which can help your credit. Once your balances push your utilization over 30%, your credit scores can suffer.

2. Your Purchase Was Flagged as Fraud

Because credit card fraud is the most common type of identity theft, card issuers are constantly on the lookout for suspicious activity. While a legitimate purchase being flagged as potential fraud can be annoying in the moment, it can ultimately protect you. If identity theft goes undetected, someone could steal and sell your personal information and run up significant charges on your card.

When your card is declined and you know you have plenty of available credit, call the phone number on the back of the card. A representative should be able to lift any freezes the issuer put in place.

If you're planning to travel abroad, call your card issuer ahead of time and let them know. They can add a note to your account so you're less likely to get declined while you're away. However, it's smart to carry backup cards or other forms of payment when you travel internationally.

When possible, consider using a card with an EMV chip, a contactless card or a mobile wallet for payments. EMV chips tend to be more secure than magnetic swiping strips, though they can still be copied by fraudsters. Contactless and mobile payments lower the risk that the card data will be copied or that the card itself will be stolen.

Still, it's helpful to review your transaction history every few days to check for unauthorized purchases. You also may be able to set up text alerts or smartphone notifications for every purchase, or purchases over a certain amount, charged to your card.

If you see purchases you didn't make or authorize, contact your credit card issuer right away. They can reverse the charge and send you a new card. Changing your passwords and PINs for online accounts can prevent further fraudulent activity.

3. You Have a Large Pending Transaction

Companies such as rental car providers and hotels may put a hold on your card to ensure you have enough available credit to pay your final bill. While the hold is in place, your card issuer might decline other purchases until it's cleared. Merchants will tell you when they're placing a hold for things like incidentals or security deposits, so you can ask them how long it typically takes to release the hold.

If you have an idea of the hold window, you can use alternate payment methods during that time to avoid embarrassing or stressful situations. Or, if you need access to the credit line sooner, you can call the credit card issuer or the merchant to request that they lift the hold. There's no guarantee that they'll do it, but it's worth a try.

Your best bet is to build transaction holds into your budget. If you know you'll be renting a car or checking into a hotel for a week, you can set aside some extra savings in your checking account or make sure another card has plenty of credit so you're not worried about getting declined.

4. You're Behind on Payments

Credit card issuers can restrict your card use if you haven't made a payment recently. You may not realize that you've fallen behind until the card is declined, so the best thing to do is call the issuer and explain your situation. They can tell you exactly how much you need to pay to bring the account current and start using the card again.

Late payments usually mean late fees, but your issuer may be willing to waive the fee to help you get on track. If you're going through a financial hardship, the issuer may offer you a modified payment plan that allows you to continue using the account while you catch up.

Once you're in a stable place, you may want to create a strategy for paying down your credit cards so your monthly payments are more manageable. There are a number of ways to pay off debt, including debt consolidation loans, transferring your balance to a lower-interest card or working with a credit counselor to negotiate more affordable terms.

5. Your Credit Card Is Expired

Your credit card company will likely send you a new credit card before your current one expires. However, if you moved and forgot to update your address or accidentally continued using your old card, you may get declined.

The card may also have been lost in the mail or stolen, so if the expiration date passes and you haven't received a new card, contact your issuer. They can tell you when the card was sent and whether you should wait a little longer, or they can send out another one.

To help avoid being declined over an expired card, always update your contact information with your card issuer when you move.

6. Your Credit Account Was Closed Without Your Knowledge

Card companies close accounts for a number of reasons. If your credit score has dropped significantly since you opened the account, they may choose to close it because you're now a high-risk borrower.

Card issuers also close inactive accounts, so if you haven't used a particular card in a while and you're not carrying a balance, that could be the problem. If you were an authorized user on someone else's account and the primary cardholder removed you from it, you'll no longer be able to use the card.

In some cases, creditors close accounts by mistake. The only way to know for sure why an account was closed is to contact the issuer. Unfortunately, issuers are not legally required to tell you that they've shut down your account, which is why it's a good practice to log in and check the status of your accounts regularly.

How to Help Prevent Your Card From Getting Declined

You can take a few simple steps to help manage your credit card accounts and avoid getting declined when trying to make a purchase.

  • Sign up for account alerts. Many card issuers offer online and mobile app account management, and taking advantage of those options can help you keep your account in good standing. By setting up fraud alerts and purchase alerts, and checking your balance and transactions at least once a week, you can help prevent identity theft and avoid using too much of your available credit.
  • Use autopay. If your issuer has an autopay option, that may help you avoid late payments. You can schedule your monthly minimums to be withdrawn automatically so you don't have to remember to do it each time the bill comes, then make additional payments to pay down your balance when possible.
  • Pay off your balances each month. Paying off your card each month will not only help avoid embarrassing encounters at the cash register but also help improve your credit scores.
  • Pay attention to notices from your issuer. Keep an eye out for letters from your credit card company. They may give you a heads up that a new card is on the way or that your issuer is offering new security features to protect your account; implementing those could lower your chances of being a fraud victim.
  • Monitor your credit. Experian's free credit monitoring service can help you keep track of your accounts and your overall credit. You'll receive real-time alerts about suspicious activity and changes to your credit report, along with notifications about balance decreases and credit utilization updates.

There are no guarantees against your card being turned down. Even if you manage your account perfectly, your issuer might make a mistake or block legitimate purchases in an attempt to prevent fraud. But by proactively monitoring your account and your credit, you can reduce your chances of being declined.

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