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Why Is My Credit Card Being Declined? 7 Common Reasons and Solutions

Why Is My Credit Card Being Declined? 7 Common Reasons and Solutions
Jason Steele
Jason SteeleUpdated October 12, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Having your credit card declined is embarrassing and alarming. But it doesn’t necessarily mean you’ve exceeded your credit limit. There are several other possible reasons your card can be declined, and some of them are for your protection.Here’s how to find out why your credit card was declined, the steps to take to remedy the situation, and what to do to prevent it from happening again.

Declined Credit Cards vs. Flagged Credit Cards

The most common reasons a credit card is declined include missed payments, exceeding the credit limit, and using a card that expired. But a credit card can also be flagged, which puts a freeze on the account because the issuer suspects fraudulent activity. You’ll need to confirm that you were the one trying to make the purchase to activate your card again. Your credit card issuer might also flag your card if you use it in a way that differs from your usual habits. This can include using the card for a transaction in another country, making an unusually large purchase, or making multiple small purchases in a short period of time. Typically, the issuer will contact you with a phone call or text to verify the flagged purchase.

7 Reasons Why Your Credit Card May Have Been Declined  

1. Credit Limit Is Maxed Out. 

The most common reason a credit card is declined is that you’ve reached your credit limit. The credit card issuer can block you from exceeding the limit by denying your next purchase. To help prevent this, it’s wise to stay on top of your credit limit and the balance on your account, and to learn the different credit card terms and what they mean.If your card is declined, you’ll typically need to pay the balance to resolve the situation. Understanding credit limits is important for using your credit card effectively. 

2. Purchase Was Flagged As Fraud

Issuers may flag your account for fraud protection if you make a large purchase or a series of purchases that are unusual for you. If it’s a false alarm, you can typically settle the issue quickly with a text or call to your credit card issuer.

3. Expired Or Deactivated Credit Card

If you use an expired or a deactivated card it will most likely be declined. Credit card expiration dates are generally on the back of the credit card. Once your card has  expired, you should receive a new one in the mail. If you don’t, contact the issuer. Activate the new card as soon as you receive it, and destroy the old one.

4. Incorrect Payment Information

If you’re paying for something online or with your phone, it can be easy to enter the wrong account number or expiration date. Or perhaps your billing address has changed, or you incorrectly typed your zip code. Any of these things can result in the credit card being declined. Always double check the information you input before you submit it to make sure everything is correct, and make sure the address on your account is up to date. These things are essential to how credit cards function.

5. Missed Payments On Your Credit Card

If recently you’ve missed payments, the issuer may lower your spending limit or block you from further purchases so you don’t incur more debt. You’ll need to make payments on your account in order to be able to use your card again. It’s a good idea to learn how credit card payments work to help avoid this kind of situation. In general it’s important to make regular payments on your credit cards. Missing payments can affect your credit score when credit card companies report to credit bureaus. Your credit score reflects your financial history and can affect your ability to get credit cards and loans. You’ll want to keep your credit in good standing.If your credit score is damaged, you may want to check into secured credit cards, which can help you improve your credit history.

6. Travel

Using your credit card in another country could cause your issuer or bank to flag and freeze your account for possible fraud. If this happens to you, contact the issuer and verify your identity and the purchases. 

7. Authorized Holds

Rental car companies and hotels can place a hold on your credit card to guarantee that you’ll have enough in your account to pay your final bill. You may see a hold listed on your account as a “pending transaction,” and it can lower your available credit until it’s released. Ask the merchant how long the hold period is to help avoid surprises. And keep an alternate form of payment on hand, in case you do need to make purchases during this time. 

Steps To Take If Your Credit Card Is Declined

Try again

If your credit card is declined at a store, ask the clerk to try the card again. The problem could be on their end, not yours. 

Make sure your information is correct

If your card is rejected when you’re trying to use it to buy something online or on your phone, double check to make sure the card information and billing address you entered was accurate. 

Call the credit card issuer

If your card is still being declined after you’ve tried the steps above, call the card issuer. You can find their phone number on the back of your credit card. 

Preventing Your Credit Card From Being Declined

Sign Up For Notifications

Most banks and credit card issuers offer notifications to help you monitor your account. For example, you can request to be notified through email or text when you’ve reached a set percentage of your spending limit. This can help you spot potential problems. 

Make Payments On Time

Paying your credit card bills on time is crucial to make sure you have enough money in your account and to keep your credit score healthy. Using autopay can help you avoid late payments. You can schedule a certain amount to be automatically withdrawn so you don’t have to remember to do it.

Update Your Information

Make sure your billing address and phone number are current. Keeping your information accurate will help you verify your identification should your credit card be flagged or declined.

Inform Your Card Issuers About Your International Travel Plans

Before you set off on a trip out of the country, let your card provider know where you’re going and the dates you’ll be there. This may prevent your card from being flagged while you’re traveling. It’s easier to do this when you have fewer credit cards to keep track of, so be sure you know the number of credit cards you should have.

Notify Issuer About Big Purchases Beforehand

If you’re going to be making big purchases, or if you’re planning on a spending spree, let the credit card provider know about it ahead of time so that they don’t flag or freeze your account.  

Bring Multiple Forms Of Payment

It’s a good idea to carry other forms of payment with you, just in case. Another credit card, a debit card, or cash are all good options. 

The Takeaway

If your credit card is declined, don’t panic. It can happen for a variety of reasons, including fraud protection. Contact your credit card issuer to find out what’s going on. If your card has been declined because you’ve reached your credit limit, make payments on your account. Sign up for autopay to help avoid missed or late payments in the future, and opt for notifications from your issuer. Keeping tabs on your account can help you keep your credit in good standing. If you’re looking for a credit card that can assist you in building a solid line of credit, Lantern by SoFi can help. Our online marketplace allows you to conveniently browse different types of cards and compare numerous offers all in one place so you can choose the one best suited to your needs.

Frequently Asked Questions

Why is my credit card being declined when I have not met the limit?
Why is my activated card not working?
How can I stop my card from being declined?
Photo credit: iStock/Liubomyr Vorona

About the Author

Jason Steele

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
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