Why Your Credit Card Is Being Declined When You Have Money

Angry man in the park holding credit card and talking on the phone.
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There are few things more frustrating — and, to be honest, embarrassing — than having your credit card declined when you’re out shopping. And those feelings can be magnified even more when you know you have the money to cover the purchase.

If this happens to you, don’t panic. There may be a perfectly good reason why your card was declined and an easy fix. Keep reading to learn more.

Why Credit Cards Get Declined

Was your credit card declined when you were trying to make a purchase? Here are eight possible explanations:

1. You’ve Hit Your Credit Limit

One of the most common reasons why credit cards get declined is that the cardholder has reached the credit limit. Let’s say you have a credit limit of $1,000 and a current card balance of $900. If you attempt to make a purchase for $150, which would push your balance over the limit, the transaction is likely to be denied.

If you’re close to the limit and know you’ll need to make some purchases soon, you can make a payment on the card to bring the balance down and clear up some additional space. In the moment, you could ask the vendor to split the purchase on two payment methods and use another card or cash for the rest.

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2. Your Card Is Expired

When was the last time you checked your credit card’s expiration date? If your card isn’t working, it could be that it’s expired and needs to be replaced.

In most cases, credit card companies proactively send a new card before your current one expires. But if that didn’t happen, call your card issuer to get a new one sent right away.

3. There Are Signs of Fraudulent Activity

Credit card companies have precautionary measures in place to prevent fraudulent activity. One of those measures is declining transactions they think might be fraudulent. Unfortunately, these measures can also result in your card being declined when you’re making a legitimate purchase.

If your card issuer has concerns about a particular transaction, it may send a fraud alert to ask if it’s you making the purchase. If you confirm, it allows the purchase to go through. Otherwise, you may be able to call your card issuer, so they’ll let the transaction go through the second time.

4. A Company Placed a Hold on Your Card

Have you recently booked a hotel stay or a rental car? Companies like this often place holds on credit cards — sometimes even for the entire duration of your rental. These holds ensure that if you end up damaging the rental, they’ll be able to charge your card for it.

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Unfortunately, there’s not much you can do about these holds. You could put these types of purchases on a separate credit card, so they don’t impact your everyday spending.

5. You Entered Incorrect Payment Information

When you’re making online purchases, it’s easy to type in the wrong number somewhere along the way. If your card is declined during an online purchase, before you panic, simply try re-entering the numbers. You might find that it goes through right away the second time.

6. You’re Traveling

Using your credit card in another state or country could be a red flag to your credit card company, as it might assume the card was stolen. The good news is you can often avoid this by letting your card issuer know ahead of time of your travel plans.

7. Your Card Was Deactivated

Are you an authorized user of someone else’s credit card account? If so, it’s possible they deactivated your card without letting you know.

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Beyond contacting the primary cardholder to ask why you were removed, there’s not much you can do in this situation. The primary cardholder has control over who has access to the account as an authorized user.

8. Your Credit Account Was Closed

Another reason your credit card may have been declined is that the account was closed without your knowledge. Credit card companies sometimes close accounts if there have been many missed payments or if the card hasn’t been used in a while.

If you find out your account was closed, you can call your card issuer to find out why and possibly even have the card reactivated.

What To Do When Your Credit Card Is Declined

If your credit card is declined, you can first try to run it again. Sometimes there’s simply an issue with the card reader, and your card goes through the second time. But if your card is declined again, you can probably assume the problem is on your end.

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Use Another Method of Payment

If you’re standing in a retail line with people behind you, it’s best to use another method of payment to complete your purchase, if you can. Otherwise, the cashier might be able to hold your purchases while you step to the side to sort out your credit card.

Contact the Issuer

You could try calling your credit card issuer right away to have the issue resolved, but that’s not always practical — especially if you’re in that retail line. But once you’ve figured out another way to pay and have more time, you should make a call to the company.

Ideally, your credit card issuer should be able to tell you why your card didn’t work, and you can work to resolve the issue.

How To Prevent Future Declines

The good news is that if you don’t like the feeling of having your card declined in the store — because who does? — there are steps you can take to prevent it from happening in the future. Here are a few suggestions:

  • Monitor your balance. If you’re careful not to get close to your credit limit, you won’t face a situation where your card is declined because you’ve spent too much on your card.
  • Set up card alerts. You’ll know right away if you’re close to your credit limit or if there have been any fraudulent purchases on your card.
  • Use autopay. Missing payments can hurt your credit score, even if it only happens once. And too many missed payments could result in your card account being closed.
  • Notify your card issuer of travel plans. Some credit card companies even have a spot on their websites where you can update them on upcoming travel.
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The Bottom Line

Having your credit card declined can be frustrating, but there’s usually a good reason for it.

You can often prevent your card from being declined by being diligent about monitoring your balance and transactions, as well as paying your bill on time. But in cases where you’ve taken every necessary precaution and your card is still declined, your credit card company should be able to help.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

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About the Author

Erin Gobler is a personal finance writer and journalist with experience covering topics such as investing, credit cards, mortgages, insurance and more. Her work has been featured in major publications like Business Insider, Fox Business and Time. Erin received her bachelor’s degree from the University of Wisconsin Oshkosh in 2013, studying journalism and political science.
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