Getting your credit card declined isn’t something you would like to experience in public. An uncomfortable mix of panic, embarrassment, and frustration grips you as the payment processing machine displays the irritating message ‘Your transaction has been declined’.
Particularly, if you have been waiting in a long queue to make your payment, the discomfiture grows intense. Fortunately for you, your debit card or any other payment method should come to your rescue. However, you would keep wondering why your credit card was declined.
Credit card transaction failures are more frequent than you think. The national decline rate of credit cards ranges between 15% to 20%. This implies that one in five or six credit card transactions you attempt might fail!
Transactions on credit cards can fail due to several reasons. Rather than letting panic get the better of you, try to find the underlying reason for the glitch and sort things out. To take you out of the woods, we have outlined what you should do immediately after your credit card gets declined.
What does a declined credit card transaction mean?
You get a ‘declined’ message when an attempted credit card transaction fails. You may also receive an SMS alert on your registered phone number or email, with your credit card issuer informing you about the same.
Don’t worry. Getting your credit card declined doesn’t imply your card was flagged. Your banker or credit card issuer will likely flag the card when they detect suspicious activities on your account. Until you sort things out with the issuer, your card might be frozen.
Several other factors can lead to a declined transaction on your credit card.
What to do if your credit card gets declined?
Cardholders need to understand why the transaction was declined. Let’s check the common reasons leading to credit card declines, along with the viable solutions that can bail you out.
1. Check your credit limit
Have you been using your credit card heavily over the last month? You might have unknowingly hit your credit limit. Every credit card issuer fixes the upper cap on your spending. If you happen to reach this mark, you won’t have any more credit left to use. Naturally, your credit card would be declined when you attempt a transaction.
While some credit card issuers might grant you little flexibility by levying an over-the-limit charge, others won’t. If your credit limit is low or moderate, it’s easy to get the transaction declined if the amount exceeds your limit.
So, the first thing to do after a credit card decline is to ensure you are within the terms of your credit limit. If not, consider using an alternate payment method. Also, try to pay off your credit card bills every month to free up your credit limit.
Remember, hitting your credit limit frequently can drag down your credit score. Credit bureaus expect cardholders to keep their credit utilization rate below 30%. Reaching the maximum credit limit is not a healthy sign for your finances.
2. Double-check your card details
Well, nobody enters the wrong card pin or number intentionally. However, these silly mistakes do happen to all of us. It’s easy to transpose numbers. So, when you use your credit card on file, make sure to be vigilant while entering your pin, CVV, or card number. Besides, there might be a zip code attached to your billing details. Use the right code to allow the transaction without any glitches.
Did you recently relocate your home? A change in your zip code might have triggered the failure. So, get the card and billing details updated to prevent your transaction from getting declined.
3. Check the expiry date of your card
Has your credit card been nearing its expiry date? Some issuers habitually issue renewal cards close to the date of expiry. If you are unaware of the upcoming expiry date, it’s common to find credit card transactions failing.
Besides, the card might already be beyond its expiration date. This implies that you are holding an invalid card and cannot use it for making transactions.
Try to use your new card if you have received it. Reach out to the issuer’s customer support desk, requesting them to dispatch the new card to you.
4. Talk to the customer support team
If you are sure that your card hasn’t expired, consider discussing the issue with the customer support team. On most credit cards, you will find the customer helpdesk number on the rear side. The support staff can help you resolve the issue.
Sometimes, new cardholders aren’t aware of the activation process. This can lead to declined transactions on credit cards. The issuer might require you to activate the card manually. It’s their effort to weed out fraudulent activities that they hold your transaction. The card issuer simply wants to authenticate your purchase and verify the cardholder’s identity.
Irrespective of why your transaction was declined, your customer support team should be able to sort things out for you.
5. Contact your card issuer
At times, large credit card transactions fail because of your issuer’s defensive stance. That’s a good sign as it secures you financially against fraudulent transactions.
How large are your credit card transactions on average? If you make an unusually large transaction, your issuer might suspect a potentially fraudulent transaction. They wait for your approval before processing the payment to protect you from financial loss. Any purchase that doesn’t sync with your normal shopping habits can raise the alarm with the issuer.
This may also happen if you are using your card after a long time. Besides, if you are shopping outside your country using the card, the issuer might detect the change in demographics and put the transaction on hold.
In most cases, the card issuer would seek your approval through text or calls. In case you don’t receive any inquiry from them, reach out to the customer service desk and validate your identity to remove the flag.
6. Check whether the credit account is open
When was the last time you made a transaction on your credit card? The issuers sometimes close accounts without notifying their clients due to inactivity. However, if you have a decent financial standing or credit score, you can reactivate your account by contacting customer care.
If you are in a financial crunch and fail to maintain healthy money-handling habits, your credit score might have taken a blow. So, the card issuer might have drastically slashed your credit limit or closed your card altogether to mitigate risk on their end.
If you fail to resolve the issue even after contacting their customer support team, consider boosting your credit score. The issuer should notice this change in your credit report and reactivate the card after a few months.
7. Check credit card holds
Did you recently stay at a hotel or rent a car where they imposed a hold on your credit card? Unless you have an adequate credit limit, you might fail to make large purchases with these holds in place. Usually, hotels lift the hold a few days after you check out.
If your credit card has multiple holds against it, calculate the available credit limit before making a lump sum transaction. You may have to wait out the period before which the car rental company or hotel removes the hold.
In these cases, being patient happens to be the only solution. Consider using multiple credit cards when you know a merchant might put a part of your credit limit on hold. This way, you would have an adequate balance on all your cards to make room for new transactions.
8. Clear your credit card dues on time
Have you fallen behind in your credit card payments? Well, you may be shelling out late fees or high interest. However, card issuers tend to remain secure, suspecting a dip in your financial stature. Naturally, they tend to restrict the use of your credit card. This explains why you should try and clear your credit card bills on time.
If you are behind the payment dates, explain your situation to the issuers. Being practical with your repayment plan and adhering to the timeframe might convince the issuers of your financial commitment.
Besides, late payments invite hefty fines and fees. Talking out the matter with your issuer can also help you get these additional charges waived. Financial hardships can be challenging to tackle. Being methodical with your approach to tackling these hurdles can ease up your stress.
For instance, balance transfers on credit cards or debt consolidation loans might help you manage your finances better.
5 ways to prevent credit card declines
Well, there’s no rigid guide to help you prevent credit card declines. However, we have recommended some tips that can bring down instances of failed transactions.
1. Credit limit notifications
Most card issuers grant customers the liberty to personalize how they want to use their credit cards. Set up credit limit notifications so that you receive an email or SMS when you reach a certain percentage of the usable limit. For instance, you should ideally keep your credit usage below 30%. So, you can set the credit limit notification a little higher, around 50%.
Although it’s not always possible to restrict large transactions under the desired limit, you can always clear the bills the next cycle. This ensures that your card always has enough credit limit for making sizable payments.
2. Update your contact details
To enable seamless credit card transactions, keep your mobile number as the primary one on your account. This way, it becomes easy to validate your identity while making a large transaction.
Also, if you are traveling internationally, inform your card issuer about the changes in demographics. This would reduce the chances of declined transactions due to changed geo-locations. Also, your mobile should have an international data and voice plan.
3. Check notices from your credit card issuer
Credit card insurers inform their clients about policy changes or credit limits through emails or texts. Keep an eye out for these notices to prevent card declines. For instance, the issuer might introduce new safety features to keep your account secure.
This might require you to take a few precautionary measures. Failing to adhere to the new set of norms might lead to the flagging of your card when you try to make a transaction.
4. Clear your credit card dues on time
One of the easiest ways to prevent credit card declines is to stick to your budget and clear bills on time. When you pay off your credit card dues before the stipulated date, the issuers remain confident of your repayment capabilities. Failing to make timely payments can reduce your credit score and, correspondingly, your credit limit. If you are unaware of these changes, it’s difficult to prevent credit card declines.
5. Enable auto-debit
Each month, you need to pay off your credit card bills before a specific date, right? Why not automate this debit process and stay free from the hassles of making payments manually?
Enabling the auto-debit feature on your credit card also ensures you don’t forget to clear your bills on time. Simply maintain an adequate balance in your bank account from where you intend to make the payment and clear your credit card dues.
There’s no foolproof way to do away with the embarrassment during credit card declines in the first place. Even if you leave no stone unturned, a technical glitch in the payment processor can cancel your transaction.
We have already helped you with some of the most practical ways to reduce the chances of declined credit cards. Cultivating healthy financial habits and staying tuned with your credit card issuer’s notices should resolve most of these issues.