Sure, it might be embarrassing, but having your credit card declined is almost a rite of passage for people who aren't incredibly wealthy. It's hard to imagine that anyone can go through life without their credit card or debit card being declined at least once, even if it's just a technical snafu.
However, when credit cards are declined, there’s usually a simple reason. If you happen to find yourself in a store or restaurant trying to check out and get the dreaded message that your card was declined, here’s what to do.
- Don’t panic and be polite. This might seem like fairly obvious advice, but it’s easy to forget when you have a line of people behind you who probably have a good idea why you’re not moving along.
- Reswipe or reenter the card number. If you’re pretty sure, your card shouldn’t have been declined, (i.e., you know you have the funds in your bank account or the available credit on your card), ask the cashier to run your card again. Sometimes there are glitches that can cause a card to be declined and after another attempt, it goes through just fine.
- Pick a different payment method. If you have some other way to pay, you can take care of your tab and get out of there. When you get home, check with the card company or your bank to figure out what went wrong.
- Offer your ID or collateral until you return. If you don’t have another way to pay, offer your identification and ask if you can settle up later. This might be even more embarrassing, and it may not fly with every store manager or business owner, but at this point, you don’t have many options. You can also ask the cashier to copy your driver’s license so you can go home and get the funds for payment.
- Call your bank or card issuer. After you’ve made arrangements for payment, call the card issuer or your bank to find out why your card was declined. If you’ve already checked your balances and can’t figure out why your card was declined, the credit card issuer should be able to clear it up for you with a phone call.
Why is my credit card declined?
After your credit card has been declined and you’ve found a way to pay for your dinner, you’ll want to find out why exactly it was declined. Was your identity stolen and your credit card hacked? Has someone else used your card and maxed it out? Did the card issuer freeze your account because of suspicious activity?
Some of the most common reasons a credit card is declined include:
Funds not available or not enough credit
One of the most common reasons for a debit or credit card to be declined is there simply aren’t enough funds in the bank account or you’ve reached your credit limit. To prevent this from happening, you might want to set up notifications when you reach a certain balance, so you’ll know exactly how much you have available. Plus, most cards have mobile apps now allowing you to check your balance before you start ordering appetizers.
Your card company has flagged the account
In this case, the card issuer or your bank flags the account or purchase as suspicious and essentially freezes the account. This is intended to protect you from unauthorized purchases and identity theft but it can be a headache if, for instance, you’re traveling abroad and just want to buy a latte. In most cases, you can give your card company a heads up that you’ll be out of the area. Also, certain card issuers will flag the purchase but let you verify it via app or email and then let it go through.
The card is expired
This is also a common reason for a declined debit card or credit card and it happens quite frequently to many of us. When the new card comes in the mail, make sure you immediately activate it and swap it out with your old one. If you put it to the side for later, there’s a good chance you’ll forget it and end up trying to check out with an expired card.
Your card account has been closed/limit lowered without your knowledge
Sometimes, card issuers will lower your credit limit or even close the account without notifying you. If you haven’t used the card in a long time or you’ve somehow broken the terms of your card agreement, you could find out (sometimes too late) that your account has been closed or your credit line lowered, leaving you without any credit available. A recent CardRatings survey revealed that 21% of respondents who had lost jobs had also had their credit limits reduced.
Once you have a good idea why your card was declined, you can make sure it’s less likely to happen again in the future. Unless, of course, there’s a weird widespread outage and in that case, it’s out of your hands.