Five Reasons Why Your Credit Card Could Be Declined

What happens when you make some hefty purchases at a store and swipe your credit card only to be told that your transaction has been declined? Exceeding one’s credit limit is one of the most common reasons why a transaction is denied, but it is not the only one. Check out these five reasons that can be responsible for your credit card being declined.

A regular defaulter
If you miss your credit card payment schedule regularly because of reckless purchases, you will not only end up with a late payment fee, but may also find your transaction being denied one fine day. You also run the risk of accruing bad credit as each default will show up in your CIBIL report. Understandably, this will contribute towards a poor credit score. In order to avoid such situations, make sure your purchases are within your credit limit and your payments are always done on time.

Unlikely purchases
A credit card company keeps track of your transactions and if it finds that your card has been swiped for a purchase that is out of the ordinary and costs a lot, it may decline payment and put a fraud alert on it. Although such cases are pretty rare, this measure has been put in place for your own safety. In such a case, just call up your card issuer and clarify your identity.

A costly temporary hold
When you are travelling internationally and using your card to make payments, the hotel you are staying in, may put a temporary hold on your account. In some cases, this may lead to higher charges than the actual amount you are supposed to pay. And you may not even be aware that such a charge is eating up a sizeable amount of your available credit and will be considered as a high utilisation rate.

An expired card
Payment could be declined if you are using an outdated card. Most of times, a card issuer will send you a new card well ahead of the expiry date. But there could be some issues, such as the card getting lost in transit. Make sure to check with your issuer for updates if you don’t receive a new one after your old card has expired.

Your personal details
Some purchases may require you to put in your residential address or pin code at the time of swiping the card. If you have moved house but have not updated your personal information with the issuer, you can find yourself in a tight spot. In order to prevent it, log in to your account and make sure that your personal details are always up to date, especially after a change of address.

A credit card represents the power and convenience of plastic money. But if you do not use it responsibly, it can land you into a lot of trouble. It will not only lead to cash crunch and other money problems, but a poorly handled credit card may also cause a bad credit score.

Rajiv Raj is the Director and Co-Founder of www.creditvidya.com
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