Posted by: John S Kiernan

We all know how embarrassing it can be to hear the words, “Sorry, but your card just got declined.” Most people tend to assume it’s because they missed a payment or have “maxed” out their credit line.

However, contrary to popular belief, these reasons are among a multitude of factors that can cause a declined transaction – and this is precisely why it happens frequently with so many people. Even President Obama recently had his credit card declined when dining at a fancy New York City restaurant.

With that being said, it’s important to determine the reason for your rejection because this will dictate your options in terms of finalizing the transaction that triggered the denial as well as the steps you’ll need to take in order to use the card in question moving forward. We cover all of that and more below.

1. Reasons Your Credit Card Might Get Declined
2. Credit Card Declined Codes
3. What to Do if Your Credit Card Gets Declined

Reasons Your Credit Card Might Get Declined

There are a number of factors that can cause a credit card to get declined during a transaction, including:

• Your credit card is expired – Despite the fact that we’ve typed in or recited our card expiration date countless times, we still often forget and attempt to use our card past its valid period. While your credit card may continue to work after it has expired, this is the exception rather than the rule and an expired card is still a common reason for a transaction to get declined. Your issuer will automatically send you a new card when your old one expires, and if you have not received one you should contact the issuer because the new card could have fallen into the hands of a fraudster.

• You haven’t activated your card - When you get a new credit card, it will bear a sticker instructing you to activate the plastic by calling or visiting the issuer’s website. If you skip this step and attempt to make a purchase, the transaction may get declined.

• Your credit card has been cancelled – Due to a variety of reasons – whether it’s theft, fraud, delinquency, missed payments or inactivity – your card could have been cancelled. Either the notification announcing this change has not yet arrived or you may have missed it, thinking the letter was junk mail.

• Your credit line has been reduced – Credit card companies are allowed to reduce your credit limit at any time and do not even have to provide notification unless the change brings your credit line below an existing balance. Thus, it’s conceivable that you could go to make a purchase thinking you have plenty of available credit, only to find yourself on the wrong end of a declined transaction.

• You are going over your credit limit – “Maxing out” your credit card is the most commonly assumed reason for a declined transaction. This means that you have used all of your available credit and will need to make a payment before being able to spend again.

• Your purchase appears “suspicious” – Credit card companies are constantly on the lookout for fraudulent activity on consumers’ accounts. Not only do they want to mitigate fraud as a customer service, but issuers and merchants are the ones who are liable for fraudulent charges – not you – so they want to save themselves money as well. There are a number of different types of account activity that can trigger a credit company’s fraud monitoring system, including purchases made outside of your normal geographic area, numerous transactions in a short period of time, abnormally expensive purchases, and large purchases made soon after small ones (as thieves often do that to test out a stolen card).

• Missed payments – If you become delinquent on your credit card bill, the issuer may shut off your ability to make new purchases in order to prevent you from incurring more debt and prompt you to make a payment.

• There’s an authorized hold – Hotels, car rental companies and other service providers often put holds on customers’ credit cards so they can be assured of being repaid in the event you incur any incidental charges, such as damage to your room or vehicle. Though these holds aren’t always processed and charged in the end, they do monopolize a portion of your credit line for the time being.

• You didn’t enter your information correctly – People often mistakenly provide the wrong credit card number, expiration date, CVV code or billing address when paying online or over the phone. All of this information must match what the credit card company has on file for a transaction to be approved.

• The primary account holder made changes – This is only applicable to authorized users. If the primary account holder – typically a parent or business owner – makes changes to the account, those changes will affect you too. Therefore, if they cancelled their account, your card will be rendered unusable.

• Your credit card format isn’t recognized – Many countries have graduated from the magnetic stripe credit card system that is still most popular in the United States to an EMV system reliant on chip-based credit cards. Magnetic stripe cards will still work in most cases, but merchants may be hesitant to accept them due to suspicions of fraud or their unfamiliarity with how to accept them. Magnetic stripe cards will not work at unattended kiosks such as you might find in a train station or parking garage, however.

• Malfunctioning card reading machines – Sometimes the problem lies with the merchant, instead of you. It’s possible that their credit card reading machine is damaged and is having trouble processing perfectly fine credit cards. In such an instance, simply retrying your card may result in the purchase being processed.

• Your credit card was physically damaged – Since we bring our credit cards around with us everywhere we go, it wouldn’t be surprising to find that we’ve damaged them somehow. Whether we’ve accidentally corrupted the magnetic stripe or bent our card in our wallet too much, small deformations such as these could have a permanent effect on the card’s ability to function.

Credit Card Declined Codes

When a given purchase gets declined, you and/or the merchant may be provided with a “decline code” which indicates the reason for the failed transaction. If you aren’t privy to this information, you can always try to ask the merchant as it’s much faster to resolve the situation when you know the underlying cause. The following are the most common error codes:

Declined code	Explanation
97	Invalid CVV
78	No Such Account Exists
65	Customer Has Exceeded Activity Limit
63	Card Is Restricted
62	Restricted SIC Code
61	Customer Has Exceeded Withdrawal Limit
57	Service Not Allowed
54	Card Has Expired
51	There Are Insufficient Funds
19	Re-Enter Information
15	No Such Issuer
14	Card Number Is Invalid
13	Card Amount Is Invalid
12	Invalid Transaction
05	Do Not Honor
04	Merchant Should Keep Card

What to Do If Your Credit Card Gets Declined

If your credit card gets declined at the point of sale, the first thing you should do is ask the merchant to run it again. The initial failure may have been due to an issue with the merchants card reader. If you are shopping online, on the other hand, make sure to re-verify all your information before resubmitting your card for payment because a typo could be at fault

However, if the transaction continues to fail, you should contact your bank to determine the exact reason(s) why. Subsequently, based on the bank’s answer, you can then decide your next plan of action. For example, if the issue was that you’ve been forgetting to make a couple of your monthly payments, you could still save your card by making those payments immediately.

To call your issuer, always use the number printed on the back of your credit card.

Bottom Line

Having your credit card get declined can happen to anyone for any number of reasons. Therefore, there’s no need to be embarrassed or alarmed – simply make yourself aware of the potential reasons why in order to fix and avoid the same issue in the future.

Image: Robert Hoetink/Shutterstock

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