Published in: Credit Cards | Dec. 27, 2019

7 Reasons Your Credit Card May Be Declined -- and How to Resolve Them

By:  Lyle Daly

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There's always an explanation for a declined credit card transaction.

A declined credit card transaction is one of those frustrating inconveniences that seems to occur at the worst possible time. It could happen just as you're checking out at a busy store, paying for dinner at a restaurant, or trying to book a limited-time discount airfare deal.

It's impossible to be sure your credit card will never be rejected. But by understanding all the reasons behind declined transactions, you can minimize the odds of it happening to you and resolve it immediately if it does.

A merchant swiping a credit card at a flower shop.

Image source: Getty Images

1. You hit your card's credit limit

If you attempt a transaction that will cause you to exceed your card's credit limit, one of two things will happen:

  • Your card issuer will decline the transaction.
  • Your card issuer will allow the transaction and charge you an over-the-limit fee.

You don't want your card to be declined, but you also don't want to pay unnecessary credit card fees. Plus, when you use too much of your available credit -- such as regularly maxing out your card -- it can negatively affect your credit score.

To resolve this, you'll need to pay down your card's balance and be more aware of how close you are to your available credit in the future. You can also request that your card issuer raises your credit limit.

2. You entered incorrect card information

When you're shopping online with a credit card, it's easy to slip up and enter incorrect information. Your card could be declined because of a mistake with any of the following:

  • The credit card number
  • The expiration date
  • The CVV code
  • The billing address (it's typically the billing ZIP code that payment processors check)

You can catch and correct these mistakes with a quick review of all the card information.

3. The card is locked

Many popular credit cards offer a lock feature that you can use to temporarily shut down the card. If you ever lose your card and want to ensure no one else can use it while you search for it, this is a helpful security feature. Once the card is locked, it can't be used for any transactions until you unlock it. 

If you're fortunate enough to find your card, you'll need to make sure you unlock it before you start using it again.

4. The credit card company flagged the transaction as potential fraud

Your credit card company may flag transactions that are outside your normal spending patterns as potential fraud. Common examples include transactions that are much larger than your normal spending and transactions from a different location, such as another state or country.

Flagged transactions are usually automatically declined, and the credit card company will contact you by email, phone call, or text message to ask if the transaction is legitimate.

All you need to do to handle this is to respond to your card issuer or contact the number on the back of your card to let them know the transaction is legitimate. After that, you can try the transaction again, and it should process normally.

5. The card expired

If your card is due to expire, you should receive a new one automatically. But if you didn't receive one or you just forgot to start carrying it around, then you'll start seeing declined transactions after your card's expiration date.

You can't use an expired credit card, so you'll need to get a new one. If you never received yours in the mail, check that your card issuer has the correct mailing address on file and contact them to request a new card.

6. The credit card company closed your card

Although it's usually consumers who close credit cards, credit card companies also reserve the right to do this at any time. Some of the typical reasons credit card companies would cancel a card include:

  • The card has been inactive.
  • The credit card company suspects fraudulent activity on the part of the cardholder.
  • The credit card company believes the cardholder is trying to game its rewards program to earn more points/cash back.

If your credit card company decides to do this, you will receive a notification in the mail, and the letter may include a phone number you can call to appeal the cancellation. It can be difficult to convince the card issuer to overturn this decision, but it's worth a shot if you want to keep the card.

7. There was a problem with the merchant's payment processor

Sometimes the issue isn't with you or your credit card company, but with the payment processor. This is more likely if you're attempting a transaction with an international merchant. In certain cases, these merchants can't process transactions from American credit cards.

One sign that the problem is with the payment processor is that there's no pending transaction on your card. You can check this through your online account or by contacting your card issuer.

Unfortunately, this issue can be difficult to fix on your end. You'll need to contact the merchant to see if there's a way they can process the transaction for you or fix the problem with their payment processor.

Making sure your transactions are approved

Declined transactions are a hassle, but the good news is that most are easy enough to avoid or correct. If your card is in good standing, unlocked, and has plenty of available credit, then you'll avoid most potential problems.

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