Card declined? It might not mean what you think

via Card declined? It might not mean what you think on clarionledger.com, 11/4/2014

It nearly ruined my whole day. As I stood waiting in the checkout line, the cashier announced the total of my purchase. Taking my card and swiping it through the reader, she suddenly frowned; her face said it all. “It didn’t go through,” she informed me. A cold chill spread through me; I could suddenly feel every eye in the store, especially the people in line behind me.

“I’ll run it again,” she said sweetly. Now panicked, I hoped against hope that, this time, it would work. My mind raced ahead. “What if it doesn’t go through?” I asked myself. “What will I do then?” Not having enough cash on me and only carrying the one card, my only option would be to walk out of the store sheepishly. “There; it went through; must have been a glitch,” she informed me, to my relief.

There is something terrifying about that situation for many people. It’s a basic fear; for some, it’s right up there with public speaking and snakes. But it happens every day in nearly every store and restaurant. As dependent as we Americans are on our credit and debit cards, having a card declined has become so commonplace that some people no longer consider it the major embarrassment it once was. And, really, it shouldn’t be, once you know that you’re dealing with an incredibly-vast and incredibly-complex banking system.

Contrary to popular belief, having your card declined at the point of sale no longer just means that you don’t have a handle on your finances. It could mean one of dozens of things, from not having enough credit or funds to cover the transaction to not using the card enough.

And it can happen to anyone; even to the President of the United States. President Obama reported a couple of weeks ago that his credit card had been declined at a fancy New York restaurant. So as a consumer, it’s a good idea to know why and how your card can be declined. Sometimes, the cashier won’t know, although many Point-of-Sale systems will provide a two-digit code as a reason for the decline.

According to Cardhub.com, here are some reasons why your card can be declined:

Your credit card is expired. If you get this code, it means that you’re passed the expiration date on the card. The issuer should have sent you a new card automatically; if you haven’t gotten it, contact them.

You haven’t activated your card. When you get a new credit card, it will bear a sticker instructing you to activate the plastic by calling or visiting the issuer’s website. If you skip this step and attempt to make a purchase, the transaction may get declined.

Your credit card has been cancelled. Due to a variety of reasons – whether it’s theft, fraud, delinquency, missed payments or inactivity – your card could have been cancelled. Either the notification announcing this change has not yet arrived or you may have missed it, thinking the letter was junk mail.

Your credit line has been reduced. Credit card companies are allowed to reduce your credit limit at any time and do not even have to provide notification unless the change brings your credit line below an existing balance. Thus, it’s conceivable that you could go to make a purchase thinking you have plenty of available credit, only to find yourself on the wrong end of a declined transaction.

You are going over your credit limit. “Maxing out” your credit card is the most commonly assumed reason for a declined transaction. This means that you have used all of your available credit and will need to make a payment before being able to spend again.

Your purchase appears “suspicious”. Credit card companies are constantly on the lookout for fraudulent activity on consumers’ accounts. Not only do they want to mitigate fraud as a customer service, but issuers and merchants are the ones who are liable for fraudulent charges – not you – so they want to save themselves money as well. There are a number of different types of account activity that can trigger a credit company’s fraud monitoring system, including purchases made outside of your normal geographic area, numerous transactions in a short period of time, abnormally expensive purchases, and large purchases made soon after small ones (as thieves often do that to test out a stolen card).

You’ve missed payments. If you become delinquent on your credit card bill, the issuer may shut off your ability to make new purchases in order to prevent you from incurring more debt and prompt you to make a payment.

There’s an authorized hold. Hotels, car rental companies and other service providers often put holds on customers’ credit cards so they can be assured of being repaid in the event you incur any incidental charges, such as damage to your room or vehicle. Though these holds aren’t always processed and charged in the end, they do monopolize a portion of your credit line for the time being.

Incorrect information. People often mistakenly provide the wrong credit card number, expiration date, CVV code or billing address when paying online or over the phone. All of this information must match what the credit card company has on file for a transaction to be approved.

The primary account holder made changes. If you don’t own the account, but are an authorized user, the account holder can make changes. This is especially applicable to students who use their parents’ card.

Your credit card format isn’t recognized. Many countries have graduated from the magnetic stripe credit card system that is still most popular in the United States to a system reliant on chip-based credit cards. Magnetic stripe cards will still work in most cases, but merchants may be hesitant to accept them due to suspicions of fraud or their unfamiliarity with how to accept them. Magnetic stripe cards will not work at unattended kiosks such as you might find in a train station or parking garage, however.

Malfunctioning card reading machines. Sometimes the problem lies with the merchant, instead of you. It’s possible that their credit card reading machine is damaged and is having trouble processing perfectly fine credit cards. In such an instance, simply retrying your card may result in the purchase being processed.

Your credit card was physically damaged. Since we take our credit cards around with us everywhere we go, it wouldn’t be surprising to find that we’ve damaged them somehow. Whether we’ve accidentally corrupted the magnetic stripe or bent our card in our wallet too much, small deformations such as these could have a permanent effect on the card’s ability to function.

So, if you find yourself in this uncomfortable-but-common situation, ask the cashier to try again (some do this automatically). If it doesn’t work on the second try, ask for the decline code, then call the credit card company to investigate. The issues above are all fixable. In the case of many debit cards, try running them as a credit card, rather than as a pin-based debit.

Above all, stay on top of your payments, read your statements carefully, and stay under your credit limit. And remember that cash is accepted just about everywhere.

For more on this issue visit Cardhub.com

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s