The decline of your Credit Card transaction can be a frustrating experience, especially if you do not have any alternate mode of payment available. It can become embarrassing as well if there is a long queue behind you waiting for its turn.
How does the Credit Card transaction go through?
When you hand over the card to the merchant establishment for payment, they swipe the card on the card reading machine. The system communicates with the Credit Card issuer to confirm the validity of the card and seek its approval for the payment.
If everything is fine, then bank approves the payment and confirms its approval online. However, the banks decline the transaction at times. There are many reasons for the banks rejecting your Credit Card transaction. Let us look into some of the possible reasons for rejection.
- Not having enough balance: Every Credit Card has a specific limit up to which you can use the card. As you keep on using the card, the available limit keeps on reducing until you make the payment resulting in restoration of the limit. If your transaction amount is more than the available threshold, the bank has the right to decline the transaction.
Sometimes, the banks approve the deal if the excess amount is within the tolerance levels. It can happen in exceptional cases where the banks charge a fee for approving transactions over the limit. Remember that hotels, car rental agencies, and so on can exercise an authorisation hold on your card limit. It can reduce the limit by the amount of hold.
- Payment is overdue: Your outstanding balance can be well within the limit. However, you might have missed out on a bill payment. Usually, banks are lenient and condone a few delays. However, if you develop a habit of paying late, the banks can suspend the limit and decline the transaction. The banks have to inform you before resorting to such a step. You can pay your bills and apply to the bank for reinstating your limits.
- Expiry of the Credit Card: Every card has an expiry date. The limit is not available for use after the expiry of the card. The banks issue a replacement card with a new It usually reaches you in advance. However, it can happen that you might not have received it in time. Under such circumstances, you will not be able to use the old card. The bank deactivates it after dispatching the replacement card.
- Account closed: Banks can close Credit Card accounts unilaterally for a variety of reasons. It is not obligatory on the bank’s part to inform you. However, the banks ensure to intimate their clients about such actions from their side. There could be lack of proper communication, and hence you might not be aware of the closure of the account.
- Flagged for fraud: You must check for fraudulent transactions in your Credit Card account and inform the bank to block your card. At the same time, banks are also vigilant and hence, monitor all accounts regularly. In case they find some irregularity in the transactions, the banks can flag the account for fraud and suspend the limits. Banks have a mechanism whereby you can inform them before using the card for purposes outside your regular spending habits.
What do you do when you face such a situation?
If you face such a situation, you have a simple solution. You can use an alternate method of transacting either by paying cash or by using another card. However, you should investigate the reasons for the declining of your transaction and take appropriate steps to avoid such occurrences in the future.
You should contact your bank and set things right.
What will you do when you do not have a backup method of paying the bill?
Such a situation can be very embarrassing. One option is to cancel the purchase and place the goods back on the shelf. If you have already availed the service, you need to show some tact in handling the issue. You can speak to the business enterprise and work out a solution.
You can phone your family or friends to bail you out of the situation. You should exercise restraint, and be calm. Blaming the business enterprise or the payment system will not help you in any way. You can offer some collateral and ask the business enterprise to retain the same until you return with the payment. If you handle the matter calmly, you can succeed.
Always have a Plan B in case you encounter such a situation. It can rescue you from the embarrassment. It is always beneficial to have two Credit Cards with you all the time. In case you do not have an additional card, you can apply by Finding the Right Credit Card for Me.
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