Understanding Why Credit Cards Decline

Merchant Warehouse |

December 7, 2010

Getting the DECLINED message when trying to use your card online or at a register is not something anyone wants to happen. Some people know it’s a possibility and just hope that the credit card company approves the request, but others sometimes get declined for what they think is no apparent reason. While this can be extremely inconvenient it is also very embarrassing. Consumers are often finding themselves explaining why it would be declined to the cashier who probably feels either awkward or annoyed at the matter anyway.

Here are some reasons why your card would decline. Try to make sure this doesn’t happen to you.

You Are Over the Limit

Sometimes when an account has multiple card holders it may be difficult to track spending. If there is not clear communication between authorized users, then the transaction could result in a decline. If you have two users authorized on an account try and split the limit in half so each user has access to half of the money. This may help avoid that moment at the POS when the cashier hands the card back and asks for another form of payment.

Late Payments

If your payment has been mailed late or not processed yet, you may get the decline message while trying to use your credit card. In order to avoid this call your credit card company and listen to the automated information that can tell you what your available credit it and whether or not they have received the payment.

Credit Score Has Lowered

With the credit crisis of 2008 many credit card companies are reducing their credit portfolios. One of the effects is that they are reducing credit card limits of card holders that may be considered a risk. If you started off with a credit score in the 700s and are now in the 600s, it’s likely that your credit limits may be reduced. While the credit card companies will notify you of this decrease in your spending limit through the mail, you may not be aware of it at the time you try and use your card. If you think you are at risk of having this happen to you, simply call your credit card company and check your available credit before you use your card.

Card Number is Incorrect

If you are shopping online or if a credit card terminal is broken cards may need to be entered manually by you or by a cashier. Don’t rush. Make sure you enter the numbers slowly and even say them outloud to make sure you are entering them correctly. If a cashier is doing it, try and watch and make sure it is being input correctly to avoid being declined.

CVC is Wrong

The CVC (Card Verification Code) is located in two different spots. On the front for American Express® and on the back for Visa and MasterCard®. Make sure you are using the correct code. If you enter this number incorrectly your card will decline. American Express uses a four number CVC and places it on the front of the card just above the credit card number on the right. Visa and MasterCard uses three numbers and they both have it on the back of the card in the signature strip on the right.


If you enter your billing address incorrectly, primarily the zip code, your card will decline. Some businesses add authorized users, but the billing zip code is what needs to be entered, not the home zip code for the user. If you are in the process of moving, make sure you contact your credit card company and change the address. When you do this, notify any of your authorized users so they know to use the correct billing address.

Fraud Suspect

Credit cards keep track of your usage pattern. If you buy something out of the norm or buy too much in a short time your card could decline. There may also be issues if you are traveling and use your card. In order for the credit card companies to protect themselves they will flag accounts that have an unusual spending spree or charges outside the city from which the account holder lives. In order to avoid this, you can call your credit card company and notify them that you will be traveling during a certain time frame.

Card is Inactive

When you get your card in the mail, make sure you call in and activate it. Do not remove the sticker until this is done. If you try and use your card before you make the call it will decline. It’s very easy to activate your credit card. Most of the credit card companies now use caller ID to verify that it is the card holder calling and will activate the card immediately, so activate the card from your home phone. There is no delay once the card is activated you may use it right away.

Card is Expired

Many of us use the same couple of cards for 90% of our purchases. Having those cards linked to reoccurring charges will result in a decline if the account is not updated. Sometimes consumers forget to activate the new card and just continue to use the card that will expire within 30 days. If you wait too long you will pass the expiration date and when you try and use your card it will decline.

Card has an Authorization Block

A good example of this is if you check into a hotel. They will usually put a block on your card for an estimated amount of money, usually based on how many nights you are staying and the rate. If you use a different card to check out of the hotel, the block on your other card could remain for up to 15 days. If you try and use your card it will likely decline until the block is removed. You may have to call the credit card company to clear this up, but to avoid it, just use the same card you checked in with to check out and pay your hotel bill.

Magnetic Strip is Damaged

If you are using a wallet with a magnet clasp or if you leave your cards out in the sun the magnetic strip may be ruined. This will result in an error message or sometimes a decline. This will also force a cashier to have to input the number manually which will either hold up the line or risk that they may input the number incorrectly.