Why Your Credit Card Declined and What to Do About It

You’re at the grocery store. You’ve just scanned all of your items. Now, all that’s left to do is to scan your credit card.

You put your chip into the machine and wait for it to read “accepted” . . . only for it to read “declined” instead. While you’re still able to pay for your groceries with another card, you’re wondering, why was your first credit card declined?

There are a number of reasons for why your credit card could have been declined. Below, we’re going to discuss the most common of these reasons, and tell you exactly what to do to get your credit card up and running again. Let’s go!

Reasons Your Credit Card Declined

Credit cards get denied all the time and for a variety of reasons. In most cases, it’s due to one of the following.

You’re Out of Credit

The most simple explanation for a credit card being denied is that the credit card doesn’t contain enough credit to complete the purchase. You can’t spend over your credit limit.

For instance, let’s say that your credit limit is $5,000 and you’ve accumulated credit to the tune of $4,925. You go to the grocery store and spend $95 on a purchase. This puts you over your limit by $20.

Your credit card will not simply charge you the $75 remaining and allow you to pay back the additional $20 later. It will simply reject the transaction in totality.

You Haven’t Been Making Payments

One of the conditions of having a credit card is making monthly payments on that card. Generally, there is a minimum payment due every month, usually between 2% and 5% of the total credit used.

While your issuer might allow you to miss a few monthly payments, there will be a limit as to how many you can miss. Once you’ve reached this limit, your issuer will cut you off and prevent you from using your credit card any further.

In other words, if you haven’t been making payments on your credit card, it will be denied at the register.

Your Issuer Flagged Your Account

Another potential reason for why your credit card was declined was that your issuer put a flag on it. If a flag was put on your card, it’s going to remain inactive until you call up your issuer and have it taken off.

Flags are generally put on credit cards as a means of preventing spending fraud. While they’re usually not the cardholder’s fault, they usually come about due to the spending actions of the cardholder.

For instance, if you use your credit card on vacation 1,000 miles away from your home, it might be hit with a flag. If you use your card to buy a $2,000 sound system despite the fact that you usually make purchases no higher than $50, a flag is a possibility.

Basically, the point of flagging a credit card is to protect the credit of the cardholder. Unfortunately, the system is not perfect and can result in false positives.

Your Issuer Closed Your Account

What you might not realize is that card issuers have the option to cancel the accounts of their customers at any point. They legally don’t even need a reason to do so.

However, perhaps the most common reason as to why an issuer might cancel an account is that it goes unused. To better understand this, you’re advised to read more about credit card processing.

Your Card is Expired

Perhaps the first thing to check when a credit card gets denied is the expiration date of the card. If your card is even a single day past its expiration date, it’s going to be denied.

Usually, credit card issuers will send new cards out to their customers in the mail before this time arrives. Make sure to activate your new card and replace your old one prior to its expiration date.

Your Card is on Hold

If you’re staying at a hotel or renting a car, your credit card might be on hold. Holds such as these can make it impossible for you to use your credit card during the duration of their existences. Your only option is to wait them out.

What to Do if Your Card Was Declined

Having your credit card denied can be a little embarrassing. However, it’s nothing to get in a huge fuss over. Psychologically, it’s best to think of the situation as a comedy of errors.

The problem can be easily rectified in just three steps. Those steps are as follows.

Pay With Another Card

When your card gets denied, there are two things you can do at the moment: 1. You can use another card to complete the transaction, or 2. You can cancel the transaction entirely. The point is to get the situation over with so that you can set out on fixing the problem.

Get in Touch With Your Issuer

Once the situation is over with, you need to call your issuer. There should be a phone number for your issuer on your credit card itself. Talk to the representative, ask why your card is being denied, and smooth out any problems that may exist.

As long as you don’t have any huge balances to pay, this should work to make your card operational again.

Take Steps to Ensure This Doesn’t Happen Again

Finally, you’re going to want to take steps to ensure that your card doesn’t get denied in the future. Usually, you can do this by informing your issuer of out-of-town vacations and big purchases before they occur. Your issuer will put a note on your card and will make sure not to flag it.

Of course, you need to make your payments and stay under your limits as well.

Learn More About Money Matters

While having your credit card declined can be frustrating, it’s not the end of the world. All you have to do to remedy the problem is get in touch with your card issuer and take measures to ensure that it’s not denied again.

Looking to learn more about money matters? If so, Plunged in Debt might be able to help. While we focus on the financial situations of celebrities, we also offer useful advice on a range of different financial subjects.

Have any questions? Contact us!

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