After months surfing the internet for the perfect washer-and-dryer combo, you finally find the right match at a great price.
Suddenly the deal is off. Your credit card won’t go through, and you have no other immediate form of payment to use.
It’s happened to many of us, and it’s not always the result of financial irresponsibility.
Here are factors that can trigger a credit card rejection, along with tips to remedy the problem.
1. Maxed-out card
Exceeding your credit card’s spending limits can have negative consequences — both in the form of fees and in credit denials.
It also can damage your credit rating because of the utilization factor, which accounts for 30 percent of your FICO credit score.
If you’re close to the limit, try to request an increase. But don’t use any boost as an excuse to go on a shopping spree that raises the height of your debt mountain.
2. Fraudulent purchases
If your credit card issuer suspects a fraudulent purchase is being made with your card — or if you have actually reported such fraud — the lender likely will freeze the card.
Such activity — real or suspected — also can result in the closure of the current account, followed by the issuance of a new card.
If your account is frozen after you make a legitimate purchase, promptly contact your credit card issuer to explain the situation.
3. Authorized user dropped from the account
Perhaps you have been an authorized user on a credit card account, but the person whose name is on the card has decided to revoke your rights. In such instances, you will be cut off from using the account.
You can also lose temporary access if the cardholder has reported the card as lost or stolen.
To avoid being caught off-guard, simply keep the lines of communication open with the person whose name is on the card.
4. Transaction holds
Transactions such as securing a hotel room or renting a car could result in a hold being placed on your account. If you are close to your credit card’s limit, the card could be rejected at a subsequent 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.
5. Foreign/international transactions
Foreign transactions can raise credit card companies’ suspicions about fraudulent purchases being made with your card, resulting in a freeze on your account. That can be true even if you are in the U.S., but are making purchase online from a foreign business.
The solution? Before you travel, let your credit card company know that you will be far from home, including where you will be and when you will be there. And always alert the company in advance about foreign transactions conducted online from the comfort of your own home.
6. Unusual purchases
If you make a purchase that doesn’t fit the pattern of your typical spending behavior, the credit card company might flag it.
Let your credit card company know if you plan to shop at a different type of store or to make an usually large purchase. At the very least, always have a backup way to pay.
7. Delinquent accounts
Ignore the balance due long enough and the magic plastic may suddenly lose all of its powers. Whether you suffer this fate depends on the issuer and your history with the company.
Other negative consequences that might result from not paying your bill include:
- Damage to your FICO 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 whether any additional remedies are available to you.
8. Expired card
If you didn’t get a new card in the mail before your card’s expiration date, call your card’s issuer. It is possible you have been a victim of mail fraud.
Of course, it’s also possible that the card was mailed to you, and you mistook the envelope for a piece of junk mail before tossing it in the trash.
9. Transposed numbers
Sometimes you are 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 digits, and a rejection will follow.
You can always retry. But if you make too many errors, it might prompt your credit card issuer to lock you out of using the card until you call to explain what happened.
10. Closed account
A credit card company can close your account for all sorts of reasons, and it doesn’t have to give you advance notice. CreditCards.com says:
Even if you’re not in default, an issuer can boot you at any time. The most common reason is that you’re not using the account often enough.
To lower the odds that your account will be closed, simply be a good customer. It’s a good bet that your card company will keep you if you use the card regularly and responsibly and always pay bills on time.