One of the most embarrassing financial moments any of us will encounter is having our credit card declined. And somehow, this always seems to happen at the most inopportune moments. Like when you're at the grocery store and a long line of customers is waiting for you to get out of the way, or when you're out on a big date and the waitress has to come back to the table and announce that you have not, in fact, been able to pay for your date's meal. Mortifying!
While having your credit card declined is certainly uncomfortable in a social sense, what's more unsettling is when you're not sure of the reason behind the merchant's rejection of your card. Many of us use our credit cards as our primary tool for making day-to-day purchases, so getting locked out of being able to buy gas or groceries is certainly enough to give the plastic-dependent among us a fright.
There's no one explanation for why credit cards get declined -- in fact, there are many. But if your card has been refused and you're not sure why, it's probably for one of these four common reasons.
1. You've made a "suspicious" purchase
Credit card companies have become savvy at recognizing fraudulent purchases made with your card; often, they're able to detect a nefarious charge before you can. However, the net that they cast to catch credit criminals is very wide -- sometimes too wide. Occasionally, your credit card company will mistakenly label a legitimate charge (one that you've made) as fraudulent purchase and will temporarily stop your ability to use the card. Of course, they think they're stopping a thief, but in reality you're bearing the brunt of their overzealousness.
Not to worry, though: This misunderstanding is usually cleared up with a phone call to the credit card company to verify that your card has not, in fact, been compromised.
2. You've reached your credit limit
One of the most straightforward reasons your credit card could have been declined is that you've reached the credit limit your card issuer set on the card and the company simply won't let you borrow any more money until you've made a payment. Maxing out your credit card impedes your ability to make purchases, but it's also bad news for your credit score. In general, it's best not to exceed 30% of the available credit you've been issued on each card, so if your credit card is maxed out, you've well exceeded that guideline.
To be able to use your card again -- and keep your credit score from plummeting -- you'll need to make a hefty payment to it, pronto.
3. Your card has been blocked by a hotel or rental-car company
If neither of those scenarios can be blamed for getting declined, think about the places you've used your card recently. If you've paid for a hotel stay or a rental car with your card, either of those businesses could be the culprit.
Hotels and rental car companies frequently issue "holds" on a customer's credit card when the imprint of the card is initially taken. This is to ensure that the customer will have enough available credit to pay for the car rental or hotel room when the final charges are placed. So if you've recently stayed in a hotel or rented a car, call your credit card company and see if a lingering hold is the reason your credit card stuck in payment purgatory.
4. Your card has been exposed to a potential threat
Again, credit card companies have become very adept at picking up on potential identity theft, so if there's a possibility that your card could have been exposed to a threat, your card might be rendered temporarily unusable. If you've purchased something online at a site that wasn't secure or used your card in a store that may have been the subject of a credit card skimming scheme, your credit card company will make every effort to keep your card from being used for unauthorized purchases -- including shutting the card down.
If your card has been declined and you're completely stumped as to why, be sure to get in touch with your credit card company -- there's a good chance the company is trying to protect you from a scam.
There are lots of potential reasons your credit card could have been declined, so be sure to do some investigating right away. Check your credit limit and give your credit card company a call; you'll probably turn up the answer -- and be able to take appropriate action -- faster than you think!
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