7 Reasons Your Card Got Declined (And How to Fix It)

By Damian Davila. Last updated 30 May 2016. 0 comments

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Getting your card "declined" at the checkout register ranks quite high among the most embarrassing personal finance problems. Holding up a long line of impatient shoppers or missing a window to land an online 40% discount on a Cyber Monday deal are cringe-worthy money moments that can ruin your entire day.

Beyond having insufficient funds on your credit or debit card, there are several reasons why your card didn't go through. Here are seven reasons — and more importantly, how to fix them.

1. Missing Payments

Approximately 6% of Americans admit they have been late making a credit card payment. Depending on the terms of your card, an issuer can reserve the right to deactivate your card with as little as one missed payment. Some retailers, such as gas station chains or clothing stores, issue cards that require you to pay back a balance in full by the deadline in order to continue using the card in the next billing cycle.

How to Fix It

Call the customer service line and ask how much you need to pay to get the card reactivated. If you have a positive payment history with the issuer or substantial reason for late payment, such as a medical emergency, request a waiver of any applicable late payment fees. Prevent future missed payments by setting up a recurring automatic payment through your bank's checking account or the card's online payment portal for at least the required monthly minimum.

2. Getting a Hold on Your Card

When you use your card to buy gas, rent a car, or book a hotel room, you may receive a hold on your account to ensure that you have sufficient funds to make your payment. For example, you may want to pump only $30 worth of gas, but the automatic payment terminal can put a hold of up to $125 on your card. If you only have $50 of available credit left, you may get declined for the $30. The timing of the release of these holds vary from issuer to issuer, meaning you might inadvertently exceed your current balance.

How to Fix It

The key is to prevent the holds. At the gas station, pay with your debit card at the cashier inside before filling up. When planning to use your debit card at a hotel or car rental agency, call ahead and inquire what the amount of the hold would be so you can budget accordingly. Also, ask if the company accepts a cash deposit, instead. That way you can get cash back right away instead of waiting for a hold to clear.

3. Waiting on a Deposit or Transfer to Clear

It's just like that joke from Kevin Hart: "You see, the way I got my bank account set up, I got a checking and a savings, but all my money is in my savings, so I gotta switch it to my checking, but it's gonna take three business days... I don't think it's gonna go through."

Financial institutions have different holding periods on deposits and account transfers. For example, my credit union makes check deposits and transfers from one account to another available immediately, but my wife's bank puts a 24-hour hold on check deposits and a next-business day hold on account transfers done after business hours.

How to Fix It

Determine your bank or card issuer's transfer timing. If you know that a deposit or account transfer should have cleared by now, contact customer service and ask them to take a look at it.

4. Using a Chip Card the Wrong Way

Getting used to your new chip card may take time. Some chip-enabled card readers won't accept your chip debit or credit card when you try to swipe the magnetic stripe. Also, removing your chip card before receiving the on-screen prompt to do so can result in your payment being declined. Still, the benefits of chip cards far outweigh these potential little inconveniences. (See also: 4 Ways Chip Credit Cards Make Life Easier)

How to Fix It

Try processing your payment again the right away. Dip the chip card into the slot of a chip-enabled card reader and follow the on-screen prompts.

5. Triggering Fraud Protection

In response to increasing card fraud, many issuers pay close attention to purchases that are outside of your regular pattern. Year after year, I have paid my web hosting provider located in Sweden via PayPal. This year, I decided to use my credit card and the transaction didn't go through. I immediately received an SMS from my credit union's fraud department asking me, "Did you try a charge of $xx.xx at xyz.com on card ending 1234?" Another common way to trigger fraud protection is when using your credit card abroad without informing your financial institution about your travel plans.

How to Fix It

Sign up to receive fraud alerts via SMS so that you can confirm that you were trying to do a transaction right away. (In my case, I just had to reply "Yes" to continue using my account.) When planning to leave the country, inform your card issuers and find out about any applicable card rules. Keep handy the customer service number that you can use to contact your issuer outside of the U.S. in case of any issues.

6. Forgetting About Annual Fees

You know you still had at least $100 in available balance on your credit card, so why was your card declined? You probably forgot about the annual fee. In 2014, the average annual fee of credit cards was $163. If your card balance runs very close to the limit, you run the risk of having insufficient funds when the annual fee is charged.

How to Fix It

You'll have virtually no other option than to make a payment to cover the fee(s). In the future, set a reminder for a month before the date of the annual fee so that you cover it on your payment of the previous billing cycle. Review your card's terms and conditions and watch out for other fees that could limit your available funds.

7. Getting Your Authorized Card Deactivated

As an authorized card user, you'll only be able to use the card so long as the primary card owner allows you to do so. If a spouse, family member, relative, or friend trusts you with an authorized card, respect the rules that he or she lays out for you. Communication is key. Otherwise, you'll be cut off.

How to Fix It

Contact the primary card owner and ask how you can get your card reactivated. Be calm, polite, and be ready to apologize if you did wrong.

What are other reasons your card can get declined?

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