Card declined? Don't panic -- it may be an easy fix

By Helen Fowler

Few things are more embarrassing than a declined credit card. Chances are, you've been there. You get to the front of the line at the supermarket or finish your meal at a restaurant. But when you hand over your credit card, you hear those four humiliating words: Your card was declined.

According to research by Thinkmoney, more than 14% of Brits have had their debit or credit card declined  at least once in the past year, and 10% have had their debit or credit card turned down more than once in the past year. Surprising? Not at all, say experts. But there are ways to avoid this humiliation.

Understanding why cards get declined may help you avoid rejection at the till - and take action if you do find yourself in that position.card-declined

*Your bank account is overdrawn
This is a hazard for debit card users. If you don't have a good sense of what's in your bank account at any particular moment, you risk getting turned down when you try to use your card.

"We weren't surprised to find so many people were unsure about their balances," says Ian Williams, director of communications for Thinkmoney. "You may have paid in money, but it might not necessarily be available to spend."

That is, if you check your balance at an ATM or online and see that you have £1,000, that number can be deceiving. You also have to account for pending charges. Cheques take longer to go through than debit transactions, so if you made a £150 cheque payment a day ago, it might not be reflected in your account balance for another day or so.

It's important to track all deposits and outgoing payments each month. Keep a running log of your expenses and when you have paid cheques. A number of third-party apps and software programs make this fairly convenient. Checking your banking account online will let you know when cheques have cleared.

*You've exceeded your credit card limit
When you get a credit card, you're assigned a maximum amount you can charge. Banks determine your credit limit based on your credit record. To keep your credit score in top shape, try to stay under 50% of your credit limit.

If you find you're continually bumping up against your credit card limit, you can ask to get your limit raised. However, average consumer borrowing  has risen to around £3,167 per UK adult, according to The Money Charity. On top of that, an estimated £11 million in loans is written off daily by UK banks and building societies. So don't be surprised if your provider -- like most institutions right now -- is hesitant to offer more credit to consumers.

*You use an incorrect PIN more than three times
We know, it's hard to remember all your PINs and passwords. Just be aware that if you punch in the wrong code three times in succession, your bank may automatically deactivate your card for the sake of your own protection.

*Information entered online doesn't match billing records
Details are important. If a card is getting knocked back, it may come down to billing details. Check to make sure your credit card provider has your current address.

*Your card isn't activated, or it's expired
Sounds obvious, but people trip up over simple stuff like this. Once your new card arrives by post, you must activate it by phoning the card provider and answering a few security questions. Until then, the card is useless.

If you're using an old card, check the expiry date. You should receive a replacement card long before that date passes, but sometimes, people forget to activate it and stick with the old card.

*Your card provider suspects fraudulent activity
Your card provider doesn't know when you've decided to splurge and get a new gadget or take a holiday (though any time you plan to use your card in an unfamiliar place, you should call your card provider and tell them). If your credit card provider or bank suspects fraudulent charges, it may cancel the card to protect you.

*You missed a payment
Card providers are not always as tolerant of missed payments as we might wish. Some will even temporarily cancel a card rather than risk dealing with bad debts that are growing every time the card gets used.

*The bank is to blame
Even those who keep diligent track of their money could find themselves facing a flashing "transaction denied" screen.

"Sometimes the card provider has let you down, or you may have entered your PIN incorrectly," says Williams. Faulty connections between the card reader and card issuer can scupper transactions.

If you're certain you have enough in your account for your purchase, ask the payee to run your card again. If the transaction fails again, call your bank and make sure you are not a victim of identity theft. When you're traveling in another country, your bank may automatically deny any payments unless you call to verify you are the one making them.

Any time your card is declined, don't panic. Call your credit card provider -- it should be able to address all of your concerns.

See related: Why was my credit limit cut?, How to track your spending without going mad

Published: 12 February 2014