Having your credit card declined at the point of sale can be embarrassing and frustrating, especially if it happens in a store. No one wants to rummage for another payment method under the tired gaze of a cashier -- or to have to put items back and buy them later.
But if you know what causes a declined card transaction, you can then take steps to ensure this doesn’t happen to you. Here are some common reasons your card might get declined.
You’ve reached your credit limit
Credit cards come with preset spending limits that cap how much you can borrow at any given time.
These limits are often lower for individuals who are building credit for the first time. For example, starter credit cards may come with credit limits as low as $300 or $500. In comparison, credit cards for people with established credit can have credit limits of $10,000, $25,000 or more.
If a transaction pushes you over your credit limit, your card issuer may decline the charge. For example, if the current balance on your credit card is $4,950 and your credit limit is $5,000, a $100 purchase may be denied.
It is possible to exceed your credit limit and have a charge go through, but you have to opt into this service. And this usually comes with an over-the-limit fee, so be mindful before exceeding your credit limit.
Large pending transactions are eating up your credit limit
Occasionally, a large pending transaction takes up a big portion of your available credit. For example, a hotel stay or car rental might result in a hold of a certain amount on your credit card until your final bill is charged, taking up your credit line.
Restaurants and rental car companies may place holds as well, and your credit card company could place an administrative hold on your card if you don’t make your credit card payments.
Although you may still see available credit, this hold could prevent your credit card purchases from going through until it’s removed from your account.
Your card is expired
Every credit card comes with an expiration date that -- depending on your issuer -- is printed on the card front or back. This date indicates how long the card can be used.
Since expiration dates for new credit cards are often years away, they’re easy to overlook. If you try to make a purchase with a credit card that’s expired, however, your purchase will likely be denied. Typically, your card issuer will automatically send you a new card before your current card expires.
If you use your card to make a purchase for a future event -- like a hotel stay or flight -- make sure your card’s expiration date falls after your plans or that your issuer will update the vendor with the new card’s info. You can also call your issuer and ask to renew the card early.
Suspicious activity that looks like fraud
If you try to make an uncharacteristically large purchase or significantly and suddenly change your spending patterns, it’s possible your credit card could be denied due to fraud suspicions, according to the Federal Trade Commission. This doesn’t mean you don’t have the available credit for a purchase or that you can’t use your card -- it just means you’ll have to take additional steps to get the credit card purchase to go through.
For example, some credit card issuers will send you a text message that lets you approve transactions flagged for credit card fraud on the spot. You can also call credit card companies using the number on the back of the card to confirm you’re making the purchase.
You’ve missed a payment
If you’ve made a late payment on your credit card, you’ll face several different consequences at once. First, Equifax -- one of the three major credit bureaus -- notes that if you don’t make a credit card payment within 30 days of the payment due date, it can hit your credit report. Additionally, your credit card issuer can block new purchases if you’re behind on payments, which could trigger your card getting declined.
Since your payment history is the most important determinant of both your FICO score and VantageScore, you’ll want to make a payment as soon as possible to avoid late fees and further impact on your credit. A missed payment could stay on your credit reports for up to seven years.
Steps to take when your card is declined
When your card is denied, your best course of action is to check your credit card account online or call the card issuer using the number on the back of your credit card. This lets you find out the reason for the denial, and you may be able to resolve it on the spot.
If you can’t resolve the issue because you’ve exceeded your credit line or missed a card payment, work to get your account back in good standing before using your card again.
How to prevent your card from being declined in the future
Here are some steps to take to ensure credit card denials become a thing of the past:
- Check your card expiration dates regularly. An expired card could lead to a denial. Watch for new replacement cards in the mail as expiration dates approach. Your card issuer should send them automatically. If you notice your card’s expiration date is approaching, you can also call your card issuer and request a replacement.
- Keep your credit utilization low. Most experts suggest keeping the amount you owe on your credit cards (also called your credit utilization ratio) below 30% of your available credit to improve your credit score. This will also help you avoid maxing out your card, which could trigger a merchant to decline your card.
- Pay your credit card bill on time. Paying your bill early or on time can help you avoid late fees and damaged credit scores. It’ll also help you avoid any holds placed on your account by your issuer.
- Request a higher credit limit. If your balance keeps getting close to your card’s credit limit, you can also call your card issuer to find out if you can get your credit limit raised. Then again, this may be a sign you need to rein in your spending and focus on paying down debt instead.
- Set account alerts. If you find it hard to track your account balance regularly, set up account alerts with your credit card issuer to avoid going over your credit limit and getting your card declined.
The bottom line
There are plenty of reasons why your credit card might be denied. In some cases, contacting your credit card company is all you need to do to get the charge approved. And you can avoid many credit card denial scenarios by paying your bill on time and keeping your credit utilization ratio low.
If your credit card is denied out of the blue, it’s possible your credit card issuer has spotted signs of fraud or another situation is limiting your ability to make purchases. Your best bet is to call your credit card issuer to find out what’s going on so you can take steps to fix it.
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.
