Why Was My Credit Card Declined?

credit card declined

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If you are a credit card or debit card holder, you probably have had the frustrating and even embarrassing experience at one time or another when you received a “credit card declined” notification.

Whether you are purchasing online or offline, you are at risk of a credit card decline in various ways that you can anticipate and prevent.

To save yourself the hassle of not being able to buy what you want when you want, and to protect your card from fraud or unwanted purchases, here are common situations that lead to your bank restricting further purchases.

Your Credit Limit Was Hit

Most credit cards have strict credit limits which you need to abide by or your credit card issuer will shut down your card.

During holiday season or months when you buy family members presents or go away on vacation, you are more likely to hit a credit limit.

Murphy’s Law means your credit card will probably stop working when you need it most. For example, when you are at a grocery store or dining out a restaurant.

To lower the risk of receiving a credit card declined notification when a credit limit is breached, consider a budgeting tool like Personal Capital or Mint to keep track of monthly costs, and plan for spikes in spending.

Credit Card Declined Notice When Abroad

Perhaps one of the most frustrating times to find out your credit card no longer works is when your feet hit the sandy shores of some heavenly vacation spot.

Your getaway spot is idyllic and the sun is shining but you can’t pay for a taxi to your hotel or dinner at the local hot spot.

The reason you might encounter this credit card restriction is that your credit card company keeps track of your spending patterns and knows generally where you make purchases.

If you fly to the Maldives and start spending money but your credit card issuer thinks you are still in New York, your card may be declined.

To make sure your card isn’t shut down when you need it most when abroad, inform your credit card provider ahead of time that you will be away and, for a specific time period, they will accommodate you by adding a permitted geographic region to your card purchases.

Zip Code Errors

If you own a car, you have almost certainly run into a situation where you need to fill up on gas in a hurry but you are not permitted to pump fuel because your credit card is declined.

While it is possible that the pumps at the gas station are not operating properly, a common faux-pas is entering an incorrect zip code.

Sometimes the keys are sticky and you inadvertently double-press one number which causes the error.

Or if you moved home recently, it is easy to type in an old zip code subconsciously.

Usually, these types of glitches that result from zip code errors are easily fixed and don’t require a call to your credit card provider to unlock your card.

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Large Credit Card Purchases

Credit card providers need to continuously monitor credit card fraud and so when you make large purchases, you are at risk of your transaction being denied.

A common situation when you need to make a larger purchase than usual is when you purchase a mattress, furniture, or new home appliances.

Your credit card company will expect your previous spending pattern will closely mirror your future spending so when you try to make a big purchase they may view it as suspicious and, to protect both you and them from an unwanted transaction, lock your card.

If you plan to make a large purchase, call your credit card company in advance and let them know the name of the store where you expect to make your purchase so they can give the transactions a thumbs up.

If you didn’t give your credit card company notice ahead of time, all you need to do is verify that you did make the purchase which will give them the green light to process the transaction.

Unusual Credit Card Purchases

Most people have fairly predictable spending habits where they pay for groceries, entertainment, clothes, and so on. So, when a weird or unusual purchase is spotted, they will frequently stop the transaction in its tracks before the debit hits your account.

For example, if your credit card company knows you are a male but all of a sudden a transaction for an expensive designer ball gown displays on your account, your credit card company may approve the transaction if you have a history of similar purchases but equally may deny the purchase transaction if the spending pattern is unusual.

Credit Card Fraud

You don’t have to receive the infamous scam email from a “Nigerian Prince” that dupes you into sending money to Africa to have your credit card company flag potential fraud on your card.

These days hackers spend umpteen hours trying to break into valuable databases that contain credit card information.

It’s such a big industry that the dark web is filled with marketplaces where hackers buy and sell credit card information using cryptocurrencies, like bitcoin, zcash, monero, litecoin and ethereum.

Your credit card company monitors your spending regularly to spot when your card may have been compromised by hackers and when credit card fraud is likely.

They don’t want to be left “holding the bag” by approving a fraudulent transaction because it means they are on the hook to refund your money. So, you will typically find that credit card companies are quick to shut down your credit card when the risk of fraudulent activity is detected.

Hotel Or Rental Car
Credit Card Hold

When you jet off to the sandy shores of an exotic destination, the hotel and rental car company you choose is very likely to place a hold on your credit card.

They do so in order to protect themselves in case you spend excessively on hotel meals or entertainment or have an incident where a car is damaged.

So, while it may seem like a nuisance to you, a hold placed on your credit card is generally done so with good reason.

Nevertheless, it’s easy to forget that your credit limit is partially tied up when you are out and about in a local town paying for guided tours or other fun activities.

One way to get around this restriction is to ask the rental car company or hotel if they would be open to a cash deposit upfront. That way you don’t have to be anxious about exceeding a credit card limit or making an impulse purchase when you’re roaming about a new city sightseeing.

While you could equally carry cash around with you on your vacation, you might feel uncomfortable laden down with cash compared to holding plastic in your wallet.

Canceled Credit Card

If you are a couple who shares a credit card with your significant other, you might well know each other so well that you can almost finish each others’ sentences.

That level of familiarity means you or your partner may decide to cancel a card on a whim and neglect to let the other person know.

The bottom line is it’s worth double checking with your significant other to make sure they didn’t inadvertently cancel a credit card without informing you.

Expired Credit Card

Credit card companies are generally quite good about sending customers new cards when old ones are due to expire.

But every once in a while something will go awry. For example, you may move to a new home and forget to update your credit card company or perhaps the new card got lost in the mail.

Whatever the reason, you may find yourself receiving a “credit card declined” alert when inadvertently attempting to use an expired credit card.

Keep track of the expiry date of your credit cards to minimize the chances of this occurring and, worst case, give your credit card company a call and ask them to express ship you a new card so you are not left in the lurch.

Credit Card Default

You might assume that credit card companies don’t “talk” to each other so if you went into credit card default with one provider you could still buy goods and services with another.

But credit card companies are savvy and keep an eye on your credit score, so when major changes occur, the operating terms of your credit card may change.

For example, if you defaulted on your credit card debt with one issuer, another credit card provider may impose restrictions on your card use.

If they do decide to lower your credit card limit, they are required by law to give you 45 days notice before making any changes, so you will have a little runway to prepare.

Address Errors

It’s common these days when companies are offering limited-time only deals that you are permitted a certain amount of time to make a purchase.

In the hurry of the moment, you may be keen to lock in your purchase and checkout quickly to guarantee your purchase.

During these high intensity times, like Black Friday, it’s easy to make a typo error on your address or some other line item which causes the transaction to fail.

Often these errors are hard to pick up because you could probably swear you typed in your address correctly the first time.

But if in doubt, double check each line item of your personally identifiable information and see if you can spot a typo that is causing a mismatch and a processing error.

Has your credit card ever been declined? Was it for a reason other than the ones mentioned above? Share with us your experiences below.

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