We all know how frustrating and embarrassing it can be when your credit card has been declined.
There are several reasons why this happens. Your card was probably declined for one of the following all too common reasons.
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Missed payment
Probable cause. The monthly payment was late, likely due to insufficient funds in your account or you forgot to pay manually.
How to fix it. Pay at least the minimum repayment amount or more. Ideally, pay the balance in full to avoid interest.
Insufficient credit due to a hold
Probable cause. When you book a hotel room or rent a car, the merchant may place a hold on your credit card for a certain amount of money. This hold — or deposit as it is sometimes called — can reduce your available credit and cause your card to be declined if you try to make another purchase that takes you over your spending limit or credit limit.
How to fix it. Have enough available credit to cover the hold and any additional purchases you plan to make. You can check your available credit by looking at your account statement or contacting your card issuer. If you are unsure about the amount of hold placed, you can also contact the merchant.
Incorrect credit card details
Probable cause. Entering the wrong expiration date, CVV code, or billing address when purchasing can lead to a decline.
How to fix it. Double-check all of the information you enter when purchasing. If you've attempted to make multiple purchases with the wrong information, the card may be locked until you contact the bank.
Credit limit exceeded
Probable cause. Your card will automatically be declined if you've reached your credit limit.
How to fix it. Stay under your credit limit as much as possible by paying off your balance. You can check your credit limit on your statement or by contacting your card issuer. Requesting a credit limit increase is possible, but be careful since this can get you into more debt if you can't control spending.
Exceeded your daily spending limit
Probable cause. The daily spending limit is not the same as your credit limit. If you have set a daily spending limit on your credit card, you will not be able to spend more than the limit, even if you have lots of available credit.
For example, if your total credit card limit is $5,000, but you have a daily spending limit of $1,000, you will be declined if you try to spend more than $1,000 in a single day.
How to fix it. There are a couple of options. You can spread out a large payment over more than one day, increase or remove the daily spending limit, or use a combination of different payment methods, e.g. credit card up to the spending limit and cash for the rest.
Flagged as fraudulent
Probable cause. Fraud detection systems are designed to protect you from unauthorised purchases. However, these systems can sometimes flag legitimate purchases, particularly if you're travelling overseas or the transaction is very large.
How to fix it. Inform the issuer that you will be travelling or making a large purchase so they can adjust the fraud detection settings on your account.
Card expired or cancelled
Probable cause. If your credit card has expired or been cancelled, it will not be possible to use it for payments.
How to fix it. Keep track of the expiration date on your credit card and activate the replacement card when it arrives. Contact the issuer if you have not received a replacement card.
Card was reported as lost or stolen
Probable cause. Transactions will decline automatically if you report your card as lost or stolen and try to use it to shop online.
How to fix it. Don't lose your card. If you find it, contact the issuer and request the hold to be lifted (assuming they haven't already cancelled it).
FAQs
Why is my credit card declined when I have money?
Your credit card may be declined even if you have money because of a missed payment, a hold from a hotel or car rental may have exceeded the credit limit, you've hit the daily spending limit, the transaction appeared suspicious (due to its size or overseas location), or because it has been cancelled or has expired.
