You met your credit limit
Maxing out your credit card, or reaching your card’s credit limit, is a surefire way to have your card denied.
Your credit limit is the amount of credit your issuer agrees to extend to you and can be found in your cardmember agreement or by contacting your issuer. Cards for people who are new to using credit or who have poor credit may have low credit limits of $500 or less—while individuals with excellent credit may have credit limits close to $20,000.
If your credit card purchase exceeds your credit limit, your purchase may be denied. You should know the credit limit and keep track of balances for each of your credit cards so you aren’t blindsided by reaching the limit before your monthly statement period ends. If you find yourself close to the limit regularly, contact your issuer to request a higher credit limit so you have more of a spending cushion.
In order to keep your credit score in good standing, it’s smart to keep your credit utilization rate below 30 percent. In other words, keep your balances below 30 percent of your overall limit. If you’ve reached your limit, work on a plan to begin paying down your debt before attempting to spend more. Consider transferring your balance to another card with a low or 0 percent interest rate or take on a lower interest personal loan. To quickly determine your current ratio, check out Bankrate’s credit utilization ratio calculator.
Keep in mind, a credit card issuer can reduce your credit limit if your credit score has dropped or you’ve continuously missed payments, but the issuer must give you 45 days’ notice before making a change.
If you use your credit card to make a purchase while traveling—whether you’re paying for dinner at a restaurant or picking up souvenirs—simply attempting the transaction in a different city could cause an issue with your bank.
Logging a lot of credit card activity in different locations (both domestic and internationally) raises a red flag to credit card issuers that your card may be stolen. As a result, your issuer may lock your accounts and prevent any purchases from going through in order to protect your information.
To avoid losing access to funds while traveling, notify your bank and credit card issuers of your travel plans in advance. A quick preemptive call to the number on the back of your card will save you the headache (and potential international phone bill) later.
Your large purchase was flagged as fraud
If you splurge on a spending spree or use your credit card for a large purchase, your credit card issuer may flag your account. Similar to travel, any card activity that’s outside of your ordinary spending habits may trigger fraud protection and lead to your issuer freezing your account, causing a card decline.
Again, notifying your credit card issuer of changes in your spending helps to fend off account locks. If you have more money to spend long-term, requesting a credit limit increase will allow you to spend more each month while preserving your credit score. Just make sure you’re still able to stay on top of your balances.
Incorrect payment information
When attempting to make your purchase, especially online or via mobile app, it’s easy to incorrectly enter a digit of your credit card number, expiration date or security code. Or perhaps your billing address is outdated. These could all be simple explanations for a declined transaction. Double-check your card information to ensure it’s correct.
Too many accidents like this can result in a freeze on your account, though. In that case, you may need to contact your issuer to clear up any misunderstanding.
Always enter your information carefully and review it before hitting submit, especially if you have multiple billing addresses. You should also be diligent in notifying your issuer anytime you have a change of address, as up-to-date personal information helps prevent fraud.
After you miss a payment for the first time, you should contact your issuer and settle the missed payment as quickly as possible. But if you have a history of missed payments, you may find your card getting declined at the register, even if you’re just a few days past your due date.
In some cases, you may be able to make a payment on your phone while you’re in the store and finish your transaction. But if you’re consistently missing payments, consider using autopay or setting up a notification to remind you when your statements are due.
Not only do missed payments make it impossible to use your card, but they can also have a negative impact on your credit score and dramatically reduce your ability to qualify for the best rewards credit cards or competitive loan rates in the future.
An expired or deactivated credit card
Trying to use an expired card or a deactivated account will nearly always result in having your transaction declined.
Look for your new credit card in the mail as soon as three to six months before your current card is set to expire. Even if you receive it before the expiration date, you don’t need to wait. Activate it as soon as you receive it, and destroy your old card. If you don’t receive a new card, you’ll get a letter that explains your options for paying off your remaining balance.
Similarly, any change the primary cardholder makes to an account on which you are an authorized user can affect your activity. For instance, if a card is reported lost or stolen, all cards on the account will be temporarily deactivated until new ones are issued. That’s also the case when the primary cardholder reaches the account credit limit or misses a payment. Even as an authorized user, you may be affected.
Always stay in communication with the primary cardholder of any accounts your information is on, and keep tabs on any upcoming expiration dates that may impact your card use.
There’s a hold on your card
Large purchases can also become a problem when a hold is placed on your credit card. Rental car companies and hotels may put a hold on your credit card that isn’t lifted until a few days after check out, or you return the vehicle.
Be sure your credit card has enough available credit to accommodate multiple holds at the same time. It can take a while for pending holds to charge or fall off your statement. You may be able to get it removed by contacting your issuer or the merchant, but patience is usually key in this case. Consider using one card for booking your hotel and transportation, and another for daily spending, so you aren’t stressing the limits on one card.
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