Credit cards have become an important part of most Canadian’s daily lives, over two-thirds of Canadian adults (69%), approximately using credit cards to pay for essential purchases, according to NerdWallet's 2024 Canadian Consumer Credit Card report.
If you’re a credit cardholder, you might rely on your card to check out at the grocery store, shop online or even pay bills over the phone. But what happens when that little plastic wonder suddenly gets declined?
A declined credit card can be a jarring experience, but it happens to a lot of people for a variety of reasons, and not all of them involve a lack of funds.
Why was my credit card declined?
Credit cards can be declined for a number of reasons, sometimes through no fault of the cardholder. Here are six main reasons you might see a declined message when trying to make a transaction.
1. You hit your credit limit
Credit cards typically have credit limits; this is the amount of money you’re allowed to charge to the card. Once you hit the maximum amount and have no more credit available, your card will likely be declined.
Keep in mind, too, that pending payments that haven’t hit your account can make it appear that you have more credit available than you do.
If you continually struggle to stay under your credit limit, you could: take a look at your spending habits and set a budget, try to make more frequent payments, or contact your credit card provider about increasing your limit.
It’s recommended that you keep your averagecredit utilization ratiounder 30% across all cards and lines of credit. For example, if you have two credit cards, each with a credit limit of $6,000, you should aim to have a combinedcredit card balanceof no more than $3,600.
2. You made an unusually large purchase
Sometimes large purchases can be seen as suspicious, especially if you don’t make them regularly. If this happens, the issuers might flag the card and freeze its activity. Payments may be declined and your account frozen until you contact the issuer and determine whether or not the purchase was fraudulent.
If you have an abnormally large purchase coming up, it might be a good idea to give your credit card issuer advance notice. They will make a note on your account so you won’t need to worry about having your credit card declined.
3. Your card is expired
Expired credit cards are typically declined as they are no longer valid forms of payment. Issuers often mail you a new card before the expiration date to avoid disruptions to your payment activity. If you didn’t receive a new card, contact your provider to request a new one.
4. Your card hasn’t been activated
When you get a new credit card in the mail, you need to activate it before you can use it. To do so, call your issuer or register the card online.
5. You used your card while travelling
Using your credit card in a foreign country or even in a different city can result in a declined credit card. This is a security measure to protect you, the cardholder, from credit card fraud. Most issuers don’t require you to inform them of travel, but if you want to be extra cautious, you can contact them ahead of time and inform them of your travel plans.
Sometravel credit cardsdon’t chargeforeign transaction fees, which can be a nice perk if you travel internationally on a regular basis.
6. You’re behind on payments
Late payments can cause a credit card to be declined. Issuers will typically place a hold on your card until you make a payment on the balance. Once the payments are made, the hold is lifted.
To avoid missed payments, consider setting up reminder notifications or automatic credit card payments through the issuer.
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What to do if your credit card is declined
If your card is declined, you’ll need to cancel the transaction or use a different payment method. Then, as soon as you’re able, follow the steps below:
Get in touch with your credit card provider (a customer service phone number should be listed on the back of the card).
Let the issuer know your location and what you were attempting to purchase when the card was declined.
Ask the representative you speak with for specifics about what led to the decline and how you can make it right to restore your purchasing power.
Delay future purchases until the issue with your card is resolved. Continuing to use a declined card may exacerbate the issue.
FAQs
If the balance on your bank account is too low, or you get close to or go over your credit card's credit limit, your card may be declined. If your bank or credit union offers alerts to flag fraud on your account, sign up.
Why is my card declined if I don t have enough money in my account credit or debit? ›
If the balance on your bank account is too low, or you get close to or go over your credit card's credit limit, your card may be declined. If your bank or credit union offers alerts to flag fraud on your account, sign up.
Why is my credit card saying declined when I have money? ›
Some common reasons that your credit card might get declined include having the card's credit limit maxed out, accidentally triggering the card's fraud protections and even entering incorrect payment information on a website.
Why is my credit card declined for suspicious activity? ›
If the issuer suspects a transaction is fraudulent, they might decline it. You may be able resolve the issue quickly by contacting customer service to verify your identity and get the transaction approved.
How do you fight credit card denial? ›
What to do if your application is denied
- Get an explanation. ...
- Ask for reconsideration. ...
- Give it time. ...
- Check your credit report. ...
- Apply for another card. ...
- Reapply later.
You may also have a history of high credit utilization. If you consistently max out your credit cards, for example, issuers may be hesitant to offer you new credit even if you always make your payments on time. Or maybe you've applied for too much new credit within a short time period.
Why is my card declined due to insufficient balance? ›
This could be due to insufficient funds, frozen account status, invalid credit card number or expiration date, etc. Regrettably, the card issuing bank does not provide additional details regarding the reason for the decline. The customer will need to contact the card issuing bank for more information.
Why is my card declining when I have more than enough money? ›
Why might my debit card be denied even if I have money in the account? It indicates an expandable section or menu, or sometimes previous / next navigation options. Your debit card may be denied due to overdrafting, reaching daily purchase limits, or your bank suspecting fraud.
Why is my credit card declined when I have limit? ›
Your credit card might be declined because you've reached your credit limit from recent purchases or pending transactions, your card is expired, your issuer blocks a transaction due to suspicious activity or you've missed payments on your account.
Why is my credit one card being declined? ›
There's not enough available credit: Your purchase might have exceeded the amount of money you're allowed to spend on the card. Suspected fraud: If Credit One Bank's system flags a transaction as suspicious and possibly fraudulent, they may prevent it from going through until you confirm that you authorized it.
The best way to find out why you've been refused credit is to ask the lender for a reason. However, it also helps to get a copy of your Experian Credit Report – check it for accuracy and anything listed above.
How do I know if my card is blocked? ›
Typically, when a debit card is blocked, a prompt email is sent by the card provider to cardholders' registered email ID. Online transactions will be denied. A message notifying the initiation is sent to users' registered mobile number. Users can check their financial app to find out the status of their debit card.
What does it mean when a credit card transaction is declined? ›
What is a credit card decline? A credit card decline occurs if, for a particular reason, a credit card payment cannot be processed and the transaction is declined by the payment gateway, the processor, or the bank issuing the money.
How do I stop my credit card from declining? ›
You will need to catch up on payments or set up a payment plan. Once you make consistent payments, your issuer may restore regular card use. If you find yourself behind on payments, contact your card issuer or reach out to a credit counselor for assistance.
Can I dispute a credit card decline? ›
If you apply for a credit card and get denied, you should receive a letter explaining the reasons for the denial. In some situations, you can ask the card issuer to reconsider its decision.
What are three reasons for credit denial? ›
The reasons they give for rejecting your application must be specific, such as, “Your income is too low,” “You have not been working long enough,” or “You didn't receive enough points on our credit scoring system.”
What happens if you don t have enough money on your debit card? ›
However, your bank may refuse your purchase if it will overdraw your account. If you do opt-in for overdraft protection or coverage, then your bank may pay a debit card purchase or ATM transaction, even if the transaction overdraws your account. You will be charged any overdraft fees that are incurred as a result.
Will my debit card work as credit with insufficient funds? ›
If you don't have enough funds in your account, the transaction will be declined. When you choose to run your debit card as credit, you sign your name for the transaction instead of entering your PIN. The transaction goes through Visa's payment network and a hold is placed on the funds in your account.
What happens if I don t have enough money to pay my credit card? ›
Your account will 'default' if you miss two or three payments. This means you have broken the terms of the agreement. They can then take further action to collect what you owe. Such as using debt collectors.
