Why was my credit card declined?

If you've had your credit card declined, remember that there are a few reasons this can happen. This includes machine errors, security for your account and insufficient funds. Knowing why a card is declined makes it a lot easier to deal with – and can help you avoid it in the future.

Use this guide to understand when your credit card may be declined and what you can about it. If your card has been declined, you'll also find a list of contact details for popular Australian banks so you can resolve the issue with your credit issuer.

5 common reasons a credit card may be declined

There are a few reasons why your credit card may have been declined. Some of the common causes include:

1. Machine errors

EFTPOS machines use the phone network to communicate with the banks to verify and authorise your transactions. If there is a system outage at the point of sale or with the bank's server, the transaction may be declined. If this is the case, you may be asked to sign the tax invoice for authorisation.

2. Suspected fraudulent transaction

If your credit card issuer notices suspicious activity on your account, it may block your account for security purposes. For example, if you usually only use your card for small, everyday transactions and then use your card to make multiple large purchases in one day, your issuer may put a freeze on your account and decline the transaction. Your bank will usually contact you if this happens and unfreeze the account if you confirm that it was a legitimate transaction made by you.

If you're planning to use the card to make a big purchase or another transaction that may be considered unusual, you should notify your card issuer so they're aware in advance and don't freeze your account.

3. Overseas security measures

If you're planning to use your credit card overseas, you should contact your card provider to notify them of your travel dates and where you're travelling to. If your issuer spots an international transaction on your account, they might suspect that your card is being used for a fraudulent transaction, decline the purchase and block your account.

4. Insufficient funds

Every credit card has a maximum credit limit. While some credit cards will let you spend beyond the limit and will charge you a fee, others will decline the transaction if it's worth more than your available credit limit. You can keep track of your credit limit with your monthly statements or on-the-go via your online banking account or banking app. If you require more credit limit, you can contact your card issuer for a credit limit increase. However, whether or not your request is accepted and how much credit you're given access to is subject to approval.

5. Daily account limits

Some credit cards set a daily spending limit and your card will be declined if you spend beyond this. You can contact your card issuer or check the product disclosure statement to confirm if there is a daily limit in place. If there is and you have a big-ticket purchase to make, you may be able to ask your card issuer to increase this daily limit.

How to use credit card decline codes to find out why your credit card was declined

When your card is declined in a store, the EFTPOS machine receives a code from the bank handling the transaction that describes why the transaction wasn't approved. These include an incorrect PIN, expired card and suspected fraud. Here are some examples of terminal error messages from Commonwealth Bank.

Commonwealth Bank credit card declined code examples:

While these examples are taken from Commonwealth Bank documentation, keep in mind that codes can be different between banks and EFTPOS machines.

For example, the St.George declined code 05 means "Do Not Honour", which covers suspected fraud, stolen or expired cards, insufficient funds and invalid CVNs (card verification number).

What to do when your credit card is declined

Here are you have a credit card declined, follow these steps to help sort it out:

• Try your card again. If you think you entered your PIN wrong or there was an error with the machine, an easy first step is to try the card again.
• Check the declined code. The terminal will print out or display this code, which can help you find out why it was declined.
• Use another payment method. If you want to deal with the declined card later, use a different card, cash or payment method. Or, cancel the purchase until you've found out why your card was declined.
• Contact your credit card issuer. Your issuer will help you work out why the transaction was declined and what you can do next.

Who to contact when your credit card transaction is declined

If you're unsure why your card was declined, you can contact your card issuer directly to confirm why and resolve the issue. We've provided a list of contact details for some of the credit card issuers in Australia in the table below.

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