You are relatively flush, financially speaking. Your debit accounts all have funds in them, and your credit card payments are up to date. There are no notices on your credit report that would cause any transaction to be dinged by your credit card company or your bank.
But, your debit card got declined last night when you tried to buy pizza. Or, worse, you were hosting a party of notable size and your credit card got declined, even though you knew you had enough available credit to pay the bill.
In those situations, you experience a host of emotional responses. You are either worried that some nefarious hacker has gotten into your debit or credit account, or you are embarrassed in front of that group of people you are hosting for that party.
What happened? Why did it happen? What do I do now? And how do I make sure it never happens again?
Let’s look at two situations — debit card vs. credit card — and examine the explanations for when those cards are declined.
Add the customer service numbers for your bank and credit card company into the contacts on your phone. This way, you can contact them immediately if a debit or credit card is declined.
Why is My Debit Card Being Declined?
There are several reasons why your debit card might be declined. Among them: You don’t have the money in your account to cover the charge; the card has expired, there are technical issues with the company; you have reached daily transaction limits; your banking institution finds the charge suspicious, or a business has put a hold on your account for a pending charge.
You Don’t Have the Funds
The problem with debit cards is that we use them to pay automatically for various things, including mortgage, utilities, digital newspapers, TV streaming apps or charitable donations. If you have any subscriptions attached to your debit card, and you don’t keep track of when the subscription payments are debited from your account, your account balance can be lower than you expected. Keep track of your automatic payments attached to your debit card.
For your debit card, you may want to sign up for a line of credit. This is a loan attached to your checking account, and allows you to make purchases even if your account balance does not cover the purchase amount. You will be charged for this protection, and you will be charged interest on any amount you do not pay back in the appropriate time frame, but it does prevent the embarrassment of having your card declined while you are out and about.
Your Card has Expired
It’s sort of a no-brainer to check the expiration date on our debit cards even though we do rely on our banking partners to send us new cards when ours are nearing expiration. It’s smart to take some responsibility on this one and make sure your debit card hasn’t passed its expiration date.
There Are Technical Issues
There’s not a lot you can do if a retailer is having issues with its terminals or internet connection but you can ask them to put the card number in by hand. Normally, the salesperson will do this automatically after a card decline. Request that they move to another terminal if there is one and try the card there. The card reader may have problems with your debit card if it’s gone through the washing machine one too many times, or has some other damage.
You Have Reached Your Daily Transaction Limit
All financial institutions that issue debit cards be they banks, credit unions or fintechs, have maximum spending and cash withdrawal limits. That could be as low as $500 or as much as $5,000. The maximum limit is usually different for a purchase and for a cash withdrawal at an ATM.
For example, the online banking giant Ally only allows $500 in purchases and withdrawals in a day for the first 90 days of a new account. After 90 days, the daily purchasing limit is $5,000 and the ATM withdrawal limit is $1,010. Capital One’s daily cash withdrawal limit is $610 and at Bank of America, it’s $1,000.
The Debit Charge is Suspicious
Your bank may have spotted some suspicious or possibly fraudulent activity on your account and blocked further payments while investigating. Of course, it is best if the bank notifies you of that situation when it occurs, but that is not always the case. You will find that out when you contact customer service.
Banks hate when you travel out of state! They really hate when you travel out of the country. They automatically assume your card has been stolen. If you have travel plans, call your bank and let it know. It can put a notification into your account allowing for purchases outside of your normal geographic circle.
You should be able to notify your banking institution online if you are going to be traveling.
There is a Hold on Your Account
There are purchases you make which block a certain amount from your account until the payment cycle has been completed. You do not have access to the blocked funds until they get unblocked.
Car rental companies and hotels will put a charge onto your account to block funds beyond what you expect to pay. This is to protect them against unexpected charges to your debit card that you incur during your travel. The block will come off of your account over time, That does not help in the immediate, however.
Any time you are asked to provide card information to hold a reservation, ask if a block is being put on your account, ask how much the block is, and find out how long the block will last. If you pay the bill with the same card you used in making the reservation, the block will expire more quickly.
Most hotels and rental car companies want a credit card to hold a reservation but some let you switch to a debit card once you check in or get the car. This move will put a hold on your debit card for the expected amount.
What to Do When Your Debit Card is Declined
Hopefully you have access to mobile banking on your smartphone and you can check right away if there is enough money in your account to cover the debit card transaction. If you don’t have the money to cover the charge, try moving money into the account from another account if possible. If there are plenty of funds, call the customer service rep at your bank. To save time, make sure you have that number in your phone contacts.
Some banks charge you if you overdraft your account but also let you take money out of your account via debit card if you have overdraft protection. This usually costs you money via fees or other penalties. Learn more about overdraft protection and how to avoid the fees. One way is to pick a bank that doesn’t charge them.
Why is My Credit Card Being Declined?
There are several reasons why a credit card is declined including the card is expired; you have reached your credit limit; your credit line has been decreased; you’re behind on payments; the charge appears suspicious to the credit card issuer, or there is a hold on your card that makes it appear you have exceeded your credit line.
It is likely that you use your credit card for more expensive purchases. As a result, you are more likely to run into situations where the card is declined compared to your debit account.
Your Credit Card has Expired
Credit card issuers are pretty good at automatically sending new cards two to three months before your current one expires. It’s up to you to make sure you know when your card expires and then to be watching the mail for the new one. Also, when the new one comes, activate it and put it in your wallet. Cut up the old one.
If you haven’t gotten a new credit card by the beginning of the month when your current one expires, notify customer service. They may have made a mistake or, worse, your new card may have been stolen during mail delivery.
You Have Reached Your Credit Limit
Your purchase is more than your credit limit allows. Even if you are current on your monthly payments, you still have a balance. Your balance may have been increased by automatic payments that you have forgotten about (subscriptions, renewals, utility payments) and your new purchase puts you over your limit.
Depending on your credit history, some banks may increase your credit limit if you call them in order to complete the purchase.
Your Credit Limit Has Decreased
A credit card issuer may decrease your credit limit if your credit score has dropped or your payment history has changed. The card issuer is required to let you know 45 days before your limit has decreased, but that notice may have gone unnoticed by you. So, if you think your credit limit is $15,000 it may actually be $10,000 and you don’t have enough credit to buy that new TV.
You Are Behind on Payments
This shouldn’t be difficult to understand but if you have not been making your credit card payments on time or are late on the most recent bill, new charges may be denied. It’s unlikely the credit card issuer will want to lend you more money when you are not in good standing.
If you do get behind on payments, contact customer service to determine your options. You may be able to arrange a payment plan or you might be able to raise your credit limit. This is a slippery slope, though. Getting yourself more into debt may not be the answer.
The Credit Charge is Suspicious
You are getting ready to pop the question to your sweetheart, so there’s nothing suspicious to you about the $6,000 diamond ring that you are buying with your credit card. The bank might feel differently, especially if you’ve traveled from your home in Missouri to New York’s Diamond District to make the purchase. And just like that, the charge is declined.
Banking institutions have vast fraud departments and it’s likely that you have had a card canceled and another issued because of suspicious activity. That protective oversight is always welcome by consumers — well, except for the wait for the new card — but it’s aggravating when the charge is legitimate.
You can avoid some of these charge denials if you let customer service know, via phone call or digitally, of a big charge coming. As irritating as this may be, think about the fraud folks and how it looks to them if most of the charges on your card are for less than $500 and then along comes one for $6,000. They don’t know you are in love!
Especially let them know if you will be traveling out of the country and using that card. If you are starting a new job that requires frequent travel, let your credit card issuer know that as well.
You Credit Card Has a Hold On It
This is something to think about when using your credit card to reserve a hotel or rental car, and it is especially important if you are close to your credit limit. These companies will put a block on your card to pay for the expected charges. Some people who are able keep a credit card just for travel and make sure there’s a credit cushion on it.
Something to think about: If the car rental bill is expected to be about $1,000 and the hotel another $1,500, that’s a $2,500 hold on your credit card from the two companies. It’s like you’ve already spent the money. And if you only have $500 left on your credit line, you can expect these charges to be denied. This means you won’t even be able to make the reservations.
Any time you are asked to provide credit card information to hold a reservation, ask if a block is being put on your account, ask how much the block is, and find out how long the block will last. If you pay the bill with the same card you used in making the reservation, the block will expire more quickly.
If you are going to pay the bill with another card or cash, you should let the credit card company know this when the bill is paid. They may continue the hold on your account for weeks after the dates of the reservations because they don’t know that the bill has been paid another way.
What to Do When Your Credit Card is Declined
There are several steps to take when your credit card is declined. If you are charging something online, make sure you’ve entered the card number correctly. If you are at a retail business, ask the attendant to use another terminal in case there is a technical issue. Call the credit card customer service number if neither of these tactics work. They should be able to tell you immediately what the issue is. It is good to have a back-up card for situations like this.
You seldom are required to offer an address in making a purchase with a credit or debit card, but you shoul keep your account information up to date or risk being declined.
Frequently Asked Questions (FAQs) About Declined Cards
Consumers have a lot of questions about declined credit and debit cards. We’ve rounded up the answers to the most frequently asked questions.
Something is going on with your account that you are unaware of or have forgotten. Perhaps the bank has put your account on hold due to concerns over fraudulent purchases (especially if you are making a large purchase). Perhaps a subscription fee or renewal fee you forgot about has been debited from your account. Maybe the bank is wondering if that is really you making a purchase in New Mexico when you live in North Dakota.
Contact your bank or credit card issuer. It’s a good idea to have the customer service phone numbers plugged into your phone so that you can make the call quickly to find out what is going on. This is especially helpful if your card has been declined while you are at the business. There may be a way that customer service can rectify the situation ASAP.
Contact your bank to see why the card was declined. Often, the fix is simple. Also, it is likely the card was declined as a safety measure to prevent fraudulent purchases. You can discuss with your bank its fraud prevention system and make changes to those decisions as your purchase plans warrant.
Kent McDill is a veteran journalist who has specialized in personal finance topics since 2013. He is a contributor to The Penny Hoarder.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.