Convenience and reliability are two of the biggest benefits of credit cards, making it easy to make purchases without carrying cash. However, it can be unnerving and perhaps embarrassing when your credit card is declined, especially at the checkout counter. At O1ne Mortgage, we understand the importance of financial stability and are here to help you navigate these situations. Call us at 213-732-3074 for any mortgage service needs.

Common Reasons Your Credit Card Might Be Declined

Your credit card could get declined for a variety of reasons, including an expired card, exceeding your credit limit, or due to fraud prevention measures. Here are some common reasons why your credit card could be rejected and what you can do to prevent it from happening.

1. You’ve Reached Your Credit Limit

If you’ve made several purchases on your credit card recently, you might have maxed out your card. Some credit card companies give you a little leeway and will approve an over-the-limit charge so you’re not declined in the store. However, they may charge a fee for the overage.

Not exceeding your credit limit will not only help avoid the frustration of a credit card decline, but it’ll also help your credit scores. Aim to keep your credit utilization ratio below 30%, but the lower, the better.

2. Your Purchase Was Flagged as Fraud

Credit card fraud is the most common type of identity theft. Card issuers are constantly on the lookout for suspicious activity. While a legitimate purchase being flagged as potential fraud can be annoying, it can ultimately protect you. If your card is declined and you know you have plenty of available credit, call the phone number on the back of the card to resolve the issue.

3. You Have a Large Pending Transaction

Companies such as rental car providers and hotels may put a hold on your credit card to ensure you have enough available credit to pay your final bill. While the hold is in place, your card issuer might decline other purchases until it’s cleared.

If you need access to the credit line sooner, you can call the credit card issuer or the merchant to request that they lift the hold. There’s no guarantee they’ll do it, but it’s worth a try.

4. You’re Behind on Payments

Credit card issuers may restrict your credit card use until you pay back your outstanding balance. Cutting off your ability to make more purchases reduces their risk that you won’t be able to repay a growing balance. If you’re going through financial hardship, call the issuer and explain your situation. They may offer a modified payment plan to help you keep your account current.

5. Your Credit Card Is Expired

Sometimes the reason for a credit card decline is as simple as an expired card. Usually, your credit card company will send you a new credit card before the current one expires. If you haven’t received a new card after your current one expires, contact your card issuer immediately.

6. Your Credit Account Was Closed Without Your Knowledge

Credit card companies close accounts for a number of reasons, including overdue payments, inactive accounts, exceeding your credit limit, or bad credit. The only way to know for sure why an account was closed is to contact the issuer. Regularly checking the status of your accounts can help you stay informed.

What to Do if Your Card Gets Declined

There are several reasons why your credit card can be declined, though that fact doesn’t make it any less frustrating when it happens. Here’s what you can do to resolve any issues that could be causing a transaction to decline and how you can reduce the odds it happens again.

1. Try the Transaction Again

Sometimes the reason your transaction didn’t go through is because your card is old and worn. If it doesn’t work after a couple of tries, you may need to use another card to complete the transaction. Double-checking the information on your payment form and making sure it matches your billing information may also do the trick.

2. Contact Your Card Issuer

A quick call to your card issuer may be all it takes to resolve an issue that causes your card to decline. Whether it’s suspected fraud, an expired card, or a maxed-out balance, contacting customer service can help you verify your identity and get the transaction approved.

3. Address the Problem

If your card has been declined, you can take steps to resolve whatever issue caused it, including storing credit card information to prevent incorrectly entering it for an online purchase, asking the card issuer to reopen your closed account, making overdue payments, paying your balance in full every month, and carrying at least two credit cards in case one of them is declined.

How to Prevent Your Credit Card From Being Declined

If you want to avoid having your card declined when making a purchase, here are some actions you can take:

Set Up Account Alerts

Purchase alerts and due date reminders can help you stay on top of your account balance so you don’t use too much of your available credit. Also, consider enabling fraud alerts to help you spot potential identity theft.

Schedule Auto Payments

Setting up autopay from your account dashboard can help to ensure you never miss a payment date. An even better option is to set up autopay for an amount larger than the minimum payment each month to pay down your balance faster.

Pay Off Your Credit Card Balance Each Month

Paying off your card each month could not only help avoid embarrassing encounters at the cash register but also help improve your credit scores and avoid paying interest.

Keep Your Account Contact Information Up to Date

Always update your contact information whenever it changes so your card issuer can contact you when they detect potential fraud. If they can’t contact you to verify the purchase, they could decline the transaction to protect you from fraud.

Pay Attention to Messages from Your Card Issuer

In addition to setting up account alerts, make sure to read and understand any letters you receive from your credit card company. You’ll want to be in the loop when a new card is expected to hit your mailbox, your card issuer is discontinuing your credit card, or another important message is sent.

Does Having Your Credit Card Declined Hurt Your Credit?

No, having your credit card declined does not hurt your credit. However, the reasons why a credit card transaction gets declined, such as maxed-out credit limits or missed payments, could harm your credit score.

Actions That Can Hurt Your Credit

Late or missing payments: Your lender could start declining transactions if you’ve missed one or more payments. A purchase denial is bad enough, but missing payments can also wreak havoc on your credit. That’s because your payment history accounts for 35% of your FICO® Score and missed payments stay on your credit report for seven years.

Going over your credit limit: Your credit card company could block your purchases if your account balance rises above your credit limit. That means your credit utilization rate is over 100%. Remember, lower balances have a more positive impact on your credit scores, so aim to keep yours as low as possible.

Monitor Your Credit to Avoid Having Your Credit Card Declined

Monitoring your credit can lower the likelihood of a credit card transaction being declined and protect your credit. That’s because potential fraud is one of the main reasons your card issuer could block your transactions. Credit monitoring alerts may help you stay ahead of potential dangers that could lead to a purchase decline. Similarly, alerts can also help you stay on top of your payment due dates and notify you when you’re approaching your limit.

At O1ne Mortgage, we are committed to helping you maintain financial stability. For any mortgage service needs, call us at 213-732-3074. Our team of experts is here to assist you every step of the way.