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8 Fundamental reasons your credit card gets declined

Rajiv Raj | 27 Dec, 2014  | Follow Author | Add to my Favourites 
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Our life revolves around money. These days it is convenient to carry a debit or a credit card. While it makes our life simpler, many a times it can be a bummer, especially when you are in a store in front of people and trying to make a payment and the swipe is declined.


With our increasing dependency on credit and debit cards, we have grown used to not carrying cash around. We have also realized the importance of credit cards over cash. But, when you are out there throwing a dinner party to your friends and try to make a credit card payment and if the transaction gets declined, it can be an embarrassment.

There are many reasons why a credit card swipe can be declined. We have listed the top eight reasons for such refusal of payment:

1. Credit Limit: Oh yes! This is the most common reason and all credit card users sure know this one. We have a fixed credit card limit (the maximum amount you can spend on your card preset by the issuer during the issuance), which if we cross or are very close to crossing could cause decline of payment. Keep a track on your spending and keep in mind your credit limit to prevent such a situation.

2. Uncommon purchase: You have only used your credit cards to make bill payments online and suddenly you swipe to buy an expensive jewelry of Rs50,000, this transaction will be rejected even if you have enough credit limit. The reason why such a purchase can be declined is because your credit card company thinks that it is unusual for you to do such a purchase. Some transactions like buying gold; electronics and cash withdrawals will be declined if your credit is constantly used for smaller value swipes.

3. Invalid card: If you are using an add-on card that is declined, it is possible that the primary cardholder either has reached the maximum account limit or has closed the account.

4. Change in terms and conditions: Do you have multiple credit cards from the same bank? If you default payment on one of those cards, it is possible that bank has blocked the other cards. In such an instance your swipe will be declined. Even if you have multiple cards from different lenders, banks randomly pull your Cibil credit score to take a relook at the creditworthiness. If the bank feels it has to lower your limit, it will give you a notice and do so.

5. Unknown location: If you live in India and if there is a credit card swipe-in, let us say, Russia. This transaction will be declined, because historically, all your swipes have been in India, the lender will assume it is fraudulent transaction. So if you are travelling abroad, it is a wise step to call your credit card company and inform them about your scheduled trip.

6. Unusual currency: If you have always bought in rupees and suddenly if you use your card to buy a ticket online in dollars that too with a heavy amount, this transaction is bound to be declined. Call your credit card company and give them a heads up before making such a purchase.

7. Technological reasons: These days, most of the new credit cards that are being issued come with an inbuilt chip. Now, to clear such a transaction, you need to key in a PIN number. Sometimes the merchant may be using a point of sales (PoS) machine that is out dated or if you have forgotten your PIN number or if your credit card is new and if you have not yet registered your PIN number, the transaction could be declined.

8. Wrong data: If you have entered a wrong billing address while buying a product online, or if you have entered a wrong credit verification value (CVV) or a wrong code for 3D secure password, the transaction will be declined.

So, if you ever face a situation where your card transaction is declined, it is advisable to call your bank and check with them for the cause. In most cases, unless it’s a fraudulent issue, the problems will be resolved on the phone. Also, make sure you do not swipe the card again if it is declined. After three continuous declines, the bank may block it suspecting fraud. Keep your phone number updated with your credit card issuing bank, as the bank will alert you every time there is a swipe. Lastly, save the customer care number of your bank on your phone so that, when you are in hurry to call them, you don’t run from pillar to post.

About Rajiv Raj

Rajiv Raj is a Co-founder and Director at He is a credit expert with over 10 years’ experience in the personal finance and consumer banking industry and another 7 years in the credit bureau sector. He was instrumental in setting up India's first credit bureau, Credit Information Bureau (India) Limited (CIBIL) in 2005 and moved on to help UK based Experian Group to set up Experian Credit Information Company of India Private Limited (ECICI) in 2008. He can be contacted at [email protected]

For more information, please contact [email protected]

Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. The author does not accept any liability whatsoever arising from the use of any of the above contents.

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