Why Your Credit Card Was Declined

Man paying with credit card reader in shop
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Having your credit card declined is possibly one of the most embarrassing moments of our lives, especially if you’re the first in a long line of customers or worse, you don’t have another payment method.

When a cashier swipes your credit card, the payment system communicates with your credit card issuer to determine whether your credit card is valid and you have enough funds available for the transaction. If everything is fine with your credit card, the system sends back an “approved” message and your transaction completes. However, in some cases, the credit card issuer sends back a message declining your credit card transaction.

Five Reasons Your Credit Card Declined

There are a few common reasons your credit card could be declined. Some of them could be a miscommunication between you and the credit card issuer. Or, it could be due to something you’ve done with your account. Here are a few common reasons that might explain why your credit card declined.

You Don’t Have Enough Available Credit

Your available credit is the difference between your credit card balance and your credit limit. You could run out of available credit after a spending spree or if you’ve had your credit limit cut unexpectedly. Keep in mind that authorization holds from places like hotels and car rental agencies also reduce your available credit.

Your Account Is Closed

Credit card issuers can close credit cards without warning for a variety of reasons. Or, it’s possible that your credit card issuer sent a letter, but you haven’t received it yet.

Your Payment Is Past Due.

If you’ve missed a few credit card payments, your credit card issuer has likely suspended your ability to make new payments. You’ll have to bring your account current to restore your purchasing privileges.

Your Credit Card Has Expired

Check the expiration date on your credit card. If the expiration date has passed, that would explain why your credit card declined. Your credit card issuer may have sent a replacement card in the mail. You just need to get the new card and activate it.

Your Account Has Been Flagged for Fraud

Credit card issuers are constantly monitoring your credit card transactions to be sure they fit the pattern of your typical purchases. Anything outside your normal spending habits could be flagged as fraud and cause your credit card to be declined.

What to Do If Your It Is Declined?

If your credit card is declined, the easiest thing to do is complete your transaction with another payment method—cash, debit card, or another credit card.

To find out what’s happening with your account, give your credit card issuer a call. They’ll be able to tell you the exact reason your credit card declined. In some cases, like suspected fraud, for example, your credit card issuer can fix the issue so your transaction can process normally.

How to Handle Not Having a Backup Payment Method

Picture the worst-case scenario of having your credit card declined, but not having a backup source of funding. With some businesses, you can simply put your merchandise back on the shelf and come back later for your goods when you have another payment method. In other cases, when you owe money for goods you’ve already consumed or services you’ve already received, you’ll have to work out a solution with the business.

Stay Calm and Polite

Don’t blame the waiter or the restaurant. They’ll be more willing to work with you if have a pleasant attitude. Ask if you may be allowed to return to the business later to settle your balance after you’ve resolved the issue or retrieved another payment method. (You might have to speak to the manager to make this request.) Give the business your contact information as a little extra assurance that you can be contacted for payment.

Offer to Give up a Piece of Collateral Until You Return

If the business is reluctant to allow you to leave without paying your bill, offer to leave something with them that would guarantee you’ll return.

Call Someone for Help

A friend or family member may be able to pay over the phone or bring a backup source of funds so you can take care of your payment. In that case, you’d then owe your friend rather than the business.

Having your credit card declined is always a possibility. Even if you make all your payments on time and keep your credit card in good standing, you don't know what's happening on the credit card issuser's end. Always carry at least two forms of payment with you, e.g. a credit card and a debit card. That way you won't run into a problem completing a transaction.