10 Common Reasons Merchants Reject Your Credit Card

Did a rejected credit card leave you stranded at the point of sale? Knowing why this happens can help you avoid such mishaps in the future.

You’ve spent months scouring the Internet for the perfect washer-and-dryer combo to complement your newly renovated laundry room. Finally, you’ve located what appears to be the right match at a great price.

Suddenly the deal is off. Your credit card won’t go through, and you have no other immediate form of payment to use.19

It’s happened to many of us, and it’s not always the result of financial irresponsibility.

Here are factors that could trigger a credit card rejection, along with tips to remedy the problem.

1. Maxed-out card

Exceeding your credit card’s spending limits can have negative consequences, both in the form of fees and in denials.

It also can damage your credit rating because of the utilization factor, which accounts for 30 percent of your FICO credit score.

If you’re close to the limit, you can try to request an increase. But don’t use that as an excuse to go on a shopping spree and increase the height of your debt mountain.

From our Solutions Center: Help with credit card debt

2. Fraudulent purchases

If your credit card issuer suspects a fraudulent purchase is being made with your card — or if you have actually reported such fraud — it will prompt a freeze.

Such activity — real or suspected — also could result in the closure of the current account, followed by the issuance of a new card.

If your account is frozen, promptly contact your credit card issuer to validate the purchases.

3. Authorized user dropped from the account

Perhaps you have been an authorized user on a credit card account, but the person whose name is on the card has decided to revoke your rights. In such instances, you will be cut off from using the account.

You can also lose temporary access if the cardholder has reported the card as lost or stolen.

To avoid being caught off-guard, simply keep the lines of communication open with the person whose name is on the card.

4. Transaction holds

Transactions such as securing a hotel room or renting a car could result in a hold being placed on your account. If you are close to your credit card’s limit, the card could be rejected at a subsequent point of sale until you’ve paid the final bill and the holds are lifted.

To avoid running this risk, keep your balances low to maintain a large amount of available credit.

From our Solutions Center: Find a better credit card in seconds

5. Foreign/international transactions

Foreign transactions can raise credit card companies’ suspicions about fraudulent purchases being made with your card, resulting in a freeze on your account. That can be true even if you are in the U.S. but making a foreign purchase online.

The solution? Before you travel, let your credit card company know that you will be far from home, including where you will be and when you will be there. And always alert them in advance about foreign transactions conducted online from the comfort of your own home.

6. Unusual purchases

If you make a purchase that seems odd based on your prior spending behavior, it may be flagged by the credit card company.

Two years ago during Black Friday, I headed to Saks Fifth Avenue in search of some goods whose prices were steeply reduced. My purchases came to $458. The card was quickly denied.

When I called the bank, it released the hold but told me that because I usually don’t shop at “high-end” stores, the bank figured my credit card information had been stolen.

Let your credit card company know if you plan to shop at a different type of store or to make an usually large purchase. At the very least, always have a backup way to pay.

7. Delinquent accounts

Ignore the balance due long enough and the magic plastic may suddenly lose all of its powers. Whether you suffer this fate depends on the issuer and your history with the company.

Other negative consequences that may result from not paying your bill include:

  • Damage to your FICO score once the activity is reported to the credit bureaus.
  • Lower credit limits if the issuer views you as a greater risk than before.
  • Fees for late payments.
  • A higher interest rate.

To avoid the risk of delinquency, set up payment reminders. If money is tight, reach out to the creditor to see if payment arrangements can be made or whether any additional remedies are available to you.

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  • Di Mars

    This happened to me when I tried to purchase two appliances. It was not only embarrassing but I missed the chance to get the cash back bonus the first card offers on purchases. Upon arriving home I called the issuer of the rejected card and was told that the rejection was probably because of the unusual amount of the purchase and that if it should happen again to call the card company while in the store so that the purchase can be approved. The company also added the amount that I would have earned in cash back to my bonus account so it turned out in my favor. It always pays to complain about a genuine problem!

  • bigpinch

    You don’t have travel out of the country and buy things to find your card suddenly declined. When my mom, living in another state, got sick, I suddenly found myself using my primary credit card to pay for everything and just as suddenly found the card declined. Well, I used another credit card, so no big deal. When I called customer service of my primary card, they explained that the sudden change looked suspicious. Since traveling out of town to help my mother has become a regular feature of my life, I’ve learned to notify my card company in advance about my itinerary and it hasn’t been a problem since.

  • http://ecofrugality.blogspot.com/ Amy Livingston

    Bigpinch, the same thing happened to me once: my credit card was rejected because I tried to use it in Indiana while visiting my in-laws. I had to call the company and explain that I was indeed in Indiana to get them to unfreeze (thaw?) the card. What’s funny about this is that my husband I had used that same card to purchase gas, twice, on our way from New Jersey to Indiana, and apparently that didn’t tip the company off that we were actually headed out that way.

    Anyway, I now routinely call the company before we go anywhere to let them know that yes, charges made from another state during this time period are legitimate.

  • grandmaguest

    Guess I’ve either been extremely lucky or very wise with my credit and credit cards. In 45+ years of having credit cards, I have never been denied for any reason.

  • txcharley .

    Chase has lost me as a customer because they denied my insurance payment for NO REASON and almost cost me my coverage. They cannot tell me why they denied, so I am denying them any more of my business. I am very lucky, in that I have good credit and other cards I can use. So, no more CHASE in my wallet!!

  • Georgia Wessling

    I have had my cc’s high jacked 3 times in 9 years. Each time went flawlessly. But the 4th time was a wonder. I called to let my Chase Visa know that I would be traveling through several states. I gave the info and they wanted to know if I had the card and info right in front of me. I said yes. Then they asked why I had ordered a new card the day before. I had not. I said I had another card I could use on my trip. They told me not to worry. Since it was ordered the day before, it had not been mailed out yet. So, the new card order was just cancelled. That was 2-3 months ago and have had no problems. They also sent me a new card immediately, the kind with a chip in it. In 9 years, I have not had any problems with Chase or Citi. Am so pleased.

  • bigpinch

    Several years ago, my mother had a medical emergency. I had to travel half way across the country to help her out and helping out required an extended stay and unusual purchases. While buying a load of goods at a home improvement store, my credit card was declined. An unhappy moment on top of an already stressful situation.
    The issue was resolved with a single phone call to the card issuer; a single phone call with a long time on hold and a few transfers. After that, I learned to call my credit card companies and alert them about my travel plans. I haven’t had a problem since.

    • http://ecofrugality.blogspot.com/ Amy Livingston

      Same problem here. I was visiting my in-laws in Indiana, and because I lived in New Jersey, the transaction in Indiana was flagged as suspicious–even though I had used the same card three times to purchase gas on the way *to* Indiana the day before. So now I have to call the company if I’m ever planning to use my card while I’m out of town.

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