Why Do Credit Cards Get Declined?

Why Do Credit Cards Get Declined?

July 16, 2015         Written By Jason Steele

Don’t you hate it when you go to make a purchase, but your credit card is declined? It’s hard to tell what’s worse, the embarrassment of being presumed to be broke, or the lack of accurate information offered by the merchant. Here are some of the key reasons why your transaction might not go through:

Technical problems

Despite your embarrassment, the merchant is often responsible for your credit card being declined. For example, a retailer’s credit card terminal may not be able to communicate with the payment network, or a telephone representative may input your number incorrectly. Some cashiers may even tell you that your American Express card is declined, when in fact, they store doesn’t even accept American Express!

False positive fraud alerts

Another factor that is largely out of your control is the tendency of card issuers to mistakenly block transactions that they suspect to be fraudulent. For example, if you make two purchases of the same amount, from the same store, within a few minutes, card issuers often assume that you are mistakenly being double charged, and will decline the second transaction. So consider that the next time you decide to go back to make one more purchase.

Another instance when card issuers may suspect that a transaction in fraudulent is when you are traveling overseas. In these situations, it may be easier to presume that your card number has been stolen by Russian hackers rather than the fact that you are sightseeing in Moscow. To prevent this problem, travelers should notify all of their credit card issuers in advance of their travel, including the countries they will visit and the dates of their trip.

Finally, when you make an unusually large purchase, a card issuer may also suspect fraud and decline the transaction. So if you are planning to make a charge that is several times larger than normal, it is a good idea to contact your card issuer in advance to notify it, even if the charge is within your credit limit.

Account issues

Despite the fact that many credit cards are declined due to no fault of the cardholder, there are also some instances where purchases are declined due to issues with their account. Obviously, your card will be declined if it is expired, or if it has been previously reported lost or stolen. In addition, most card issuers will decline transactions in excess of the account’s credit limit, but not all. For example, some cards have no preset spending limit, or a credit access line that you are allowed to exceed under certain circumstances.

Another problem you can face is when your account is not in good standing. Missing a single payment is unlikely to trigger the denial of a purchase, but if you are more than one payment behind, your account will most likely be suspended, preventing you from making any new purchases.

What to do when your card is declined

After you have tried to process the transaction once or twice, you will want to check the most obvious problems. Is your card expired, or are you inadvertently using a card that reported lost or stolen, or from an account that was closed? Double check that the retailer accepts that particular credit card, and ask the representative if they have been having any problems processing cards today.

But in most cases, you will want to avoid the hassle of troubleshooting the problem any further at the cash register and just use a different credit card or another form of payment. Later, you will want to contact the card issuer and ask what the problem was. If the store successfully attempted to process the charge, then the card issuer should have a record of that and reason the card was denied. If there is no record of a payment attempt, then it was likely a technical error and the card issuer should be able to confirm that your card can be used to make purchases elsewhere.

But in many cases, you won’t even need to reach out to your card issuer. Often card issuers are now able to email, text, or call you when there is a problem with a transaction. In these cases, they may simply want to confirm the authenticity of the charge in order to prevent fraud. Thankfully, these issues are quick and easy to resolve, sometimes while you are in the store.

If the issue turns out to be an account problem more serious than an expired card or a false fraud alert, then you will want to take immediate steps to resolve it. For example, you may be able to request a larger credit line, or a transfer of part of your credit line from another account you have with the same issuer.

By taking steps to quickly resolve these problems, you can continue to enjoy the security and convenience that your credit card offers.

The information contained within this article was accurate as of July 16, 2015. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Jason Steele

Jason Steele is a journalist that covers credit cards, travel and consumer credit. As one of the nation's leading experts in credit cards, Jason has contributed to dozens of travel and personal finance outlets including NerdWallet, Credit Karma and the Points Guy, where he serves as the Senior Points and Miles Contributor. Jason has also been widely quoted in mainstream media in outlets such as the Washington Post, the USA Today and Bloomberg Business Week. Jason is also the founder and producer of CardCon, which is the annual Conference for Credit and Credit Card Media.
View all posts by Jason Steele