10 Common Reasons for Why a Credit Card Can Be Declined

Since more than 80% of American adults have a credit card,¹ sooner or later, cardholders may find themselves asking, “Why was my card declined?”. If your credit card has ever been declined, you know it might feel like an inconvenience. But cards are often declined for simple, fixable reasons – sometimes, it’s even your card issuer’s way of protecting you and your account.

Here are 10 common reasons a credit card may be declined – and what to do if it happens to you.

Your credit limit is the maximum amount of money your card issuer will allow you to spend on your credit card at any given time. If you have a credit limit of $5,000, for example, and a balance of $4,800, a $300 purchase may be declined. The reason? Your card issuer is simply preventing you from going over your credit limit. Paying down your balance before making another purchase should resolve the issue.

If you frequently cut it close to your credit limit, consider turning on an account alert to warn you when you get close. And remember: A high credit utilization ratio can be detrimental to your credit score, so it may be a good idea to get into the habit of regularly paying down your balance.

When purchases are made in another state or internationally – especially if they cover long distances in a short amount of time – some banks may automatically flag the purchases as fraudulent and decline them. It’s inconvenient, but it’s the credit card issuer’s way of protecting you if your card does end up in the wrong hands.

Before traveling, it’s a good idea to review your card issuer’s policy to check if a travel notification is required. While some card issuers ask that you tell them where you’re going and when, others use advanced fraud protection capabilities and no longer require you to fill them in on travel plans.

If you’re spending larger-than-normal amounts, especially when buying something atypical for your spending habits – say, a sofa or a diamond ring – the card may be automatically declined due to suspicious activity. Once your card issuer confirms that you’re the one making the purchase, usually by email, phone call, or text, you should be able to pay.

If you plan to make a large, out-of-the-ordinary purchase, consider notifying the credit card company beforehand.

Mistakes do happen (especially with purchases made online or over the phone). If your card was declined, check for typos or misread numbers in your billing address, card number, expiration date, or CVV number. It may be a simple fix. Similarly, many apps and browsers save credit card info. If it’s been a while since you’ve made a purchase from a particular online vendor, or if your card recently expired, the website or browser may be auto-filling outdated information. 

According to McKinsey’s 2021 Digital Payments Consumer Survey, 82% of Americans use some form of digital payment, like mobile wallets or peer-to-peer (P2P) payments.² Make sure to update those accounts when you get a new card or change your address – otherwise, purchases may be declined.

If your credit card was declined at the checkout register, whether the payment system uses a chip reader, tap-to-pay, or a good old-fashioned swiping mechanism, a machine error is always a possibility. The reason for a decline could be something as simple as the chip not being inserted correctly, or something may be blocking the reader from getting a clean scan of the card. 

This type of card decline is often fixed by simply trying again after double-checking the instructions on the card reader. For example, sometimes you have to quickly remove the card, other times you have to leave it in for a few seconds. If the card needs a manual input, check that all the numbers are correct.

Not every vendor accepts every type of credit card, so if your card was declined, be sure the merchant accepts the card you’re using. Otherwise, try a different card or use cash.

Additionally, card issuers may have specific rules to regulate how credit can be used for certain purchases, like online gambling or cryptocurrency. Check the terms of service or call your credit card issuer before using your card for purchases that may be limited. It’s also worth noting that many card issuers consider gambling and cryptocurrency purchases as cash advances, which tend to have their own fees and a separate interest rate that’s often higher than the card’s normal APR. Therefore, these purchases may carry higher interest rates than typical credit card transactions.

If you have a history of late or missed payments, your card issuer may restrict how your card can be used, and it might be declined at checkout. If you consistently miss payments, consider setting up autopay to ensure you don’t miss any due dates.

Don’t forget: Payment history is the most important factor when calculating your credit score. Making on-time payments habitual can help prevent card declines and also boost your credit score.

If you’re wondering why your new credit card keeps getting declined, it could be because it wasn’t activated yet. When you get a new card, you may need to call the number on your card or log into your online account or mobile app to activate it.

If you don’t have a new card, check to be sure it’s not expired. Fortunately, many banks send replacements when cards approach their expiration date, but those, like new cards, need to be activated before you can use them.

If a card isn’t activated in a timely fashion, the card issuer may think it’s lost and cancel it (another protective measure to ensure that the card doesn’t end up in the wrong hands). Keeping track of soon-to-expire cards and activating replacements as soon as possible can help you avoid the inconvenience of a declined card.

A hold is a pending charge that counts toward your credit limit. Holds, also called blocks, are often used for purchases like hotel rooms or auto rentals to ensure that you’ll have the necessary funds to pay the bill when it is due. For example, a hotel credit card hold might total the cost of the room for every night of your stay, plus tax and an extra daily charge for incidentals like room service. If you don’t incur any incidental charges, you’ll be billed only for your nightly rate at checkout.

If you have a hold that’s causing a card decline, ask the merchant when it will be removed. It could take several days, even if you pay with a different card at checkout. It’s a good idea to keep track of when holds are added to and taken off your account so you always have an accurate picture of your available balance – especially if you’re on vacation and plan to use your credit card frequently.

If you’re an authorized user on an account, the primary accountholder may have closed the account or closed out your secondary card. Contact the primary accountholder if you’re unsure of an account’s status or the specifics of the account, like credit limits.