Why was my credit card transaction declined?

No-one wants to be the person at the front of the queue bargaining with the cashier to try the card one more time. Many of us have been there. While sometimes there’s a problem with your card or account, sometimes credit cards don’t work due to a problem on the merchant’s side. 

Here are some of the more common reasons why you may not have got the green tick of approval. 

• The card company suspects fraud

Companies use fraud protection systems to trigger a red flag for suspicious transactions. Sometimes when you conduct a legitimate transaction, it may be flagged as being ‘suspicious’ because it’s different from your regular pattern. 

Unusual activities like a large purchase, using your card abroad without telling the company about your travel plans, or online shopping from unknown websites may prompt your card company to block the transaction until it finds out more.

• You’ve hit your credit limit

Most credit cards have a maximum spending limit and if you go beyond it, your transaction may be turned down. A few card issuing companies allow you to spend more than the available limit but charge an overdraft fee. If you feel like your limit is too low, you can contact your credit card company about an increase. 

• You’ve exceeded your daily cap

In addition to a monthly limit, some cards have a maximum daily spending limit. If you exceed it, your credit card transaction may be declined. The details for daily limit are available in the product disclosure statement (PDS). If you want to use your card for a large purchase, you can ask your credit card company to increase the daily spending limit.

• You’ve entered the wrong information

You may have put in the wrong PIN, expiry date or CVV while authorising the transaction, which has resulted  in the decline of your purchase. Often you’lll be told if this is the case and you can re-enter the details to complete the credit card transaction.

• Your card has expired

Every credit card has an expiry date and if you’ve hit yours, any future card transaction will be declined. Again, you’ll often be told about this when you’re trying to pay. You can get a new card from the issuing company. 

• Your card is not accepted in the country you’re travelling in

If you use your card in a foreign country where it is not accepted, your transaction will be declined. If you want to travel abroad, it’s worth checking with your credit card provider if the credit card can be used in the country you plan to visit.

• Your card has been closed or cancelled

The company may have cancelled your card, which means any future transaction will be declined. The credit card provider can cancel your card for several reasons, such as negative changes in your credit, delayed payments or long period of inactivity. Usually you’ll be told about this via mail, email or text. 

• You’re behind on your payments

If you are behind on the payment of your credit card bills, the company may not allow you to spend any further. To restart using your card, you often have to settle the bill - or at least make a partial payment

• The EFTPOS system is offline

EFTPOS machines use phone networks for verifying and authorising the transaction from the card company. If there’s an outage, your credit card transaction may be declined. 

Another reason for credit card transaction being declined may be damage that prevents the machine from reading the magstripe or the chip. 

If none of the above reasons explain your situation, you can always contact your card company to look into the matter.

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