What Does Decline Mean in Credit Card: 4 Reasons of Decline

A decline during a credit card transaction essentially means that either the payment gateway, the processor or your creditor or bank is refusing to proceed with the payment and it can happen for a myriad of reasons and can involve technical difficulties as well and not necessarily, deliberate invalidation. According to data from Visa and Mastercard, about 15% of transactions are declined on average.

Types of Credit Card Declines

There’s two types of credit card declines, i.e soft declines and hard declines. 

Soft Declines

Soft declines occur when any party other than the credit card issuing bank or organization is either refusing to get the transaction validated or is facing technical problems disabling the transaction. 

Hard Declines

Hard declines on the other hand, happen when the credit issuer or the bank itself is declining to proceed with the transaction. This could either be a technical fault or a deliberate decline due to maintenance or credit card update. 

4 Reasons Credit Cards are Declined

Reaching Credit Limit

All credit cards have a credit limit that varies based on the user’s credit score. The credit limit is where your line of credit ends. If you’ve reached your credit limit, your credit card would decline further transactions. 

Apart from getting your credit card declined, reaching the credit limit is also unhealthy for your credit worthiness and ideally, you should never exceed your credit limit beyond 30%. 

If you have reached your credit limit, you should contact your creditor and negotiate for a higher limit. If you regularly paid your credit card debt and your credit reports reflect good credit worthiness, you’re likely to get a higher credit limit. 

Flagged Purchase

Credit card transactions are controlled algorithmically and sometimes a legitimate purchase can be flagged by creditors’ fraud detection algorithms if it falls outside of your usual spending habits. In this regard, you’d have to contact your creditors to verify the legitimacy of your attempted transaction to get the problem resolved. 

Incorrect Payment Information

While we shop online, we may end up mistakenly adding incorrect credit card information and if this happens a little too often with you, this could also result in a flag and your credit card transactions would be declined. Again, you’d need to contact your creditor to clear the misjudgment.

Expired/Deactivated Credit Card

If your credit card is expired or deactivated, you’d uniformly get transaction declines. You’d need to be vigilant of your credit card’s expiry date and look for the new one in your mail if the expiry date has reached.