8 Reasons Your Credit Card Was Declined (And What To Do About It)

You’ve placed all your groceries on the conveyor belt, and the cashier has completed scanning them. They provide you with the total, and you proceed to tap your card. However, instead of the customary “approved” message, the cashier informs you that the card has been declined.

Occasionally, despite your best efforts to be vigilant, your credit card may face a decline. Before becoming frustrated or upset, it’s important to remember that your card was declined for a specific reason. Here are some of the most prevalent causes for a declined card and steps you can take to address the issue.

Most common reasons your credit card is declined

1. Incorrect Payment Information Provided:
   At times, when entering your credit card details, you may inadvertently make errors in the numbers. This is more common with online purchases, especially if you need to manually input your credit card information. Before finalizing your purchase, review your credit card details, including the card number, mailing address, authorization code, and any other required information. If you have a digital wallet, check if the retailer accepts options like Apple Pay to streamline the checkout process.
2. Credit Limit Reached:
   Most credit cards come with a designated credit limit. If you are new to credit cards or have a secured card, your limit may be lower than those with a longer credit history. This means you could reach your limit quickly after a few purchases. To avoid this, keep a close eye on your spending and credit limit. Aim to maintain your credit utilization below 30%, as this shows responsible credit usage to both credit bureaus and your card issuer. Higher credit utilization and carrying a balance from month to month can impact your credit score and future credit limit increases.
3. Expired Card:
   Credit cards have expiration dates, and attempting to use an expired card will result in a declined transaction. The same occurs if you’ve received a new card to replace an old one, and the old card has become inactive due to its expiration or a replacement.
4. Card Not Activated:
   Failing to activate your new card will also lead to declined transactions. Whenever you receive a new card, it is essential to follow the activation process. Typically, you can find activation instructions on a sticker affixed to the card, which may include a phone number to call or a website to visit. Activate your card promptly to avoid issues when you intend to use it.
5. Traveling Out of the Area:
   Some credit card companies may require you to inform them of your travel plans, whether domestic or international. This notification helps them distinguish your legitimate transactions from potential fraud. While not mandatory for all card issuers, it’s a prudent step to prevent declined card transactions while traveling.
6. Extra-Large Purchase:
   Card transactions reflect your typical spending patterns, and a significantly larger purchase that differs from your usual behavior may trigger a fraud alert. To ensure a smooth checkout for substantial purchases, consider notifying your credit card company in advance.
7. Late Payments:
   Consistently making late payments or falling behind on payments can lead your credit card issuer to freeze your account, preventing further purchases. Even if you haven’t reached your credit limit, making at least the minimum monthly payment is essential to maintain your card in good standing.
8. Inactive Account:
   If you attempt to use a card that has been dormant for an extended period and it’s declined, your account may have been closed due to inactivity. Credit card issuers may close inactive accounts. To prevent this, set up your card for auto-pay for one or two regular expenses, such as a streaming subscription or phone bill, and pay the card in full every month. If your account is mistakenly closed, contact your issuer to resolve the issue.

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What to do when your card is declined

When situations deviate from the expected course, it’s common to feel flustered and uncomfortable. To prevent any complications, follow these steps:

1. Try an Alternative Credit Card: Immediately attempt to use another credit card if you have one on hand. This allows you to complete your transaction and exit the store promptly, after which you can contact your credit card issuer. However, if you lack an alternative card or your intention was to use the specific card in question, you might need to reconsider your purchase.
2. Contact Your Credit Card Company: Dial the phone number provided on the back of your card to reach your credit card company’s customer service. Explain that you encountered a declined card while attempting a transaction and express your desire to understand the cause.
3. Seek Resolution: Inquire with your issuer about the necessary steps to resolve the issue. This could involve making an immediate minimum payment or providing your issuer with details about your current location to confirm the authenticity of the transaction.

How to prevent your credit card from being declined

To proactively avoid the possibility of a card decline, you can take the following steps:

1. Activate Account Alerts: Utilize your credit card’s mobile app to configure account notifications. You can opt to receive alerts via email as well. Regular account alerts help you stay informed about your account activity. Even if you own popular cards like the Chase Sapphire Preferred® Card or the Citi Premier® Card, you can customize your mobile app to send you notifications.
2. Maintain Timely Payments: Ensuring you pay off your balance in full each month is crucial for maintaining a good standing. If, for any reason, you need to carry a balance, always make at least the minimum payment every month. Consider setting up autopay to avoid missing payments, or mark important payment dates in your calendar to receive alerts about impending due dates.
3. Monitor Your Credit Report: You have the option to regularly review your credit report through your credit issuer, bank, or any of the three major credit bureaus via AnnualCreditReport.com. Check for any suspicious activity or transactions you didn’t initiate, and promptly report any potential fraud. Continuous monitoring of your credit score helps you stay informed about any irregularities related to your credit cards.

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Frequently asked questions (FAQs)