Why Was My Credit Card Declined?

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Last updated on September 20th, 2023

Imagine preparing to make a purchase at your favorite store – only to find out your card is declined during the transaction. A bank declining your credit card is frustrating and stressful – not to mention embarrassing. But what causes your card issuer to shut down a purchase? Here are five of the most common reasons why your credit card was declined.

Five Reasons Why Your Credit Card Was Declined

Sometimes, an issuer may decline a credit card payment simply because you entered the wrong information. Beyond an incorrect security code, however, here are five other very typical reasons why your bank would decline your credit card:

Over Your Credit Limit

While charge cards, like the Platinum Card from Amex, have no set credit limit, traditional credit cards do. A credit limit is the maximum allowable amount you can borrow through your bank or lender. Reaching this limit means you are maxed out – and it might cause your payment to be turned down.

Once you reach your credit limit, you can’t make purchases or cash advances until you pay off some of the balance – thereby freeing up some available credit.

Pending Transactions

Pending transactions are another common reason for declined payments. Making large purchases can result in temporary holds on your account until the payment clears. Merchants do this to ensure they receive payment for expensive items.

Hotels also place holds on credit cards to ensure a guest can pay for their room and any additional services. Car rental companies also place holds, meaning further expensive purchases might result in rejection and declined payments.

Credit Card Fraud

Fraud is a pervasive problem, and banks take it very seriously. If your bank or lender flags a purchase as potentially suspicious, they might decline the charge and lock your account until they can investigate it further.

While having your card blocked due to a fraud claim is frustrating, it is easy to clear up. Calling your bank, lender, or other financial institutions via the toll-free number on the back of the card is the quickest route to resolving these problems. An easy way to avoid payment problems due to fraud is always remembering to carry cash or another payment method – just in case. Alternatively, you can always call your bank ahead of time and inform a representative that you will be making a substantial transaction, thereby clearing up any potential confusion and frustration.

Card is Expired

Most card issuers are great about sending you a new card before your current one expires. If, however, you don’t receive a new one, or it gets lost in the mail, you might be making purchases with a card that already expired.

Always ensure that your card is valid, that your bank has your up-to-date contact info, and that you receive a new card a month or so before it expires.

Card Was Closed

Sometimes someone else closes your card account without your knowledge. Account closures happen for several reasons, including:

  • A mistake by the issuer
  • Inactivity by the account holder – usually for a year or more
  • Breaking the issuer’s card agreement and terms of use agreement
  • The primary account holder removed you as an authorized user

If your card is declined due to account closure, there aren’t many steps you can take. You might be able to contact the bank and ask for it to be reopened, but if not, you’ll need to use another payment method.

Related Article: Retail Credit Cards: Your Ultimate Guide

About: Cory
Cory Santos

Cory is BestCards.com's "Jack of all trades" and resident credit expert, covering all facets of the credit card space. Cory holds academic degrees in both the U.S. and U.K. In addition to credit cards, Cory finds that jogging, cats, and memes are essential parts of a balanced day.

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