Home > 2014 > Credit Cards

10 Common Reasons Your Credit Card Was Rejected

Advertiser Disclosure Comments 0 Comments

You’ve spent months scouring the Internet for the perfect washer and dryer combo to complement your newly renovated laundry room. Finally, you’ve located what appears to be the perfect match at the right price.

Suddenly the deal is off. Your credit card won’t go through, and you have no other immediate form of payment to use before the sale ends.

It’s happened to many of us: You go to close the sale or pay for a meal and are told: “This card’s been denied. Do you have another form of payment?”

Don’t think that this is always a result of sheer financial irresponsibility.

Here are factors that could trigger a credit card rejection, along with tips to remedy the problem.

1. Your Card Is Maxed Out

Going over the limit can have negative consequences, both in the form of fees and denials.

And it can also damage your credit because of the utilization factor, which accounts for 30% of your credit score.

If you’re close to the limit, you can request an increase. But if you get one, don’t use that as an excuse to go on a shopping spree and increase your debt.

2. Fraudulent Purchases

Whether suspected or reported, fraud prompts a credit freeze. It could also result in your current account being closed, followed by the issuance of a new card. To get to the bottom of it, promptly contact your credit card issuer to validate the purchases.

3. Authorized User Dropped From the Account

If you are an authorized user on a credit card account, and the person who is responsible for the charges on the card revokes your rights or completely pulls the plug, you’ll be cut off. You can also lose access temporarily if the card has been reported as lost or stolen.

To avoid being caught off guard, simply request that the lines of communication remain open at all times.

4. Transactions Holds

Some transactions, such as lodging, rental car or other travel reservations, could mandate a hold be placed on your account. Assuming you are close to the limit, your credit card could be rejected at a point of sale until you’ve paid the final bill and the holds are lifted.

To avoid running this risk, keep your balances low to maintain a large amount of available credit — which is good for your credit utilization ratio.

5. Foreign/International Transactions

Foreign transactions can raise credit card companies’ suspicions about fraudulent purchases. In fact, it doesn’t matter if you’re in another country or here in the U.S. and making a foreign purchase online.

The solution? Let your credit card company know before you travel far from home, including when and where you’ll be. And you should also alert them in advance about foreign transactions conducted online.

6. Unusual Purchases

If you make a purchase that seems odd based on your prior behavior, it may be flagged by the credit card company.

Two years ago during Black Friday, I headed to Saks Fifth Avenue in search of some goods that were steeply reduced. My purchases came to $458. The card was quickly denied. (Luckily, I had another form of payment on hand to reduce the extreme level of embarrassment that was clearly evident on my face).

When I called the bank, they released the hold but told me that because I usually don’t shop at “high-end” stores, they figured my credit card information had been stolen.

So, if you’re shopping at a different type of store or making an usually large purchase, my suggestion to you is to always have a backup way to pay and to warn your credit card issuer about your plans before you head out.

7. Delinquent Accounts

Ignore the balance due long enough and the magic plastic may suddenly lose its powers; it depends on the issuer and your history with the company.

Other negative consequences that may result include:

  • Damage to your credit score once the activity is reported to the credit bureaus.
  • Lower credit limits if the issuer views you as a greater risk than before.
  • Fees for late payments.
  • A higher interest rate.

To avoid the risk of delinquency, set up payment reminders. If money is tight, reach out to the creditor to see if payment arrangements can be made, or if any additional remedies are available to you.

8. Your Card Has Expired

If you didn’t get a new card in the mail before your card’s expiration date, they may not want you as a customer anymore. But don’t just ignore it: You could be a victim of mail fraud.

You should call the company to make sure the card wasn’t stolen or that you didn’t mistake the new card for a piece of junk mail and toss it in the trash.

9. Transposed Numbers

Sometimes you’re asked to provide a ZIP code or the security code on the back of the card to confirm your identity at the point of sale. Mix up any of the digits and a rejection will follow. You can always retry, but enough errors will prompt a lockout until you’ve contacted the card company.

Be careful when you enter those numbers. You want to get them right the first time.

10. A Closed Account

The credit card company can close your account for all sorts of reasons, and doesn’t have to give you advance notice.

You can’t prevent all of them, but it’s a good bet that your card company will keep you if you use the card regularly and responsibly and always pay your bills on time.

This post originally appeared on Money Talks News.

More From Money Talks News:

 Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team