Tips to avoid your credit card purchases from being declined

How to avoid the embarrassment and inconvenience of having your credit card purchases declined.

In the early days of credit cards people often only used them for the occasional one-off big purchase like a holiday, or maybe even a new television. Today it is more common for people to use their credit cards instead of cash, and for transactions as small as fuel purchases, or a weekend takeaway.

At some point in your life you will go through the slightly embarrassing experience of having a card transaction declined. If this happens locally, and you have another method of payment, it will an inconvenience and nothing more. However, if you are in a foreign country, and only have your credit card on you as a method of payment you could have a real problem.

Use this guide to discover why your credit card transaction may have been declined and what you can do to avoid rejected purchases in the future.

Why was my credit card transaction declined?

To be certain of the exact reason your credit card transaction was declined, you need to speak to your credit card company. However, these are some of the common causes:

• Odd spending pattern

If your card provider notices strange patterns in your spending habits they may well put a block on your credit card for security purposes. For example, if you only ever use your credit card a couple of times a week for very small purchases, and then in one day there are 3-4 large purchases made, your issuer may flag the activity as strange or potentially fraudulent and will block the card.

• Daily limit

Some credit cards have daily spending limit within the terms and conditions. If you have not read your terms properly you may not be aware of these and this could result in you overspending and having a transaction declined.

• Spending abroad

If you're planning to use your credit card overseas, you should contact your card provider to let them know beforehand. If your issuer sees a range of transactions happening overseas, they might suspect it's a fraudulent payment and block your card.

• EFTPOS offline 

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.

• Exceeded your credit limit. 

Every credit card comes with a maximum credit limit that you shouldn't exceed. While some credit cards let you spend beyond the credit limit and will charge you a fee, others will simply decline the transaction if you spend beyond the limit. If you require more credit, you can find out how to increase your credit limit with our guide.

The different codes used to describe why your transaction was declined

Did you know that when your card is declined the EFTPOS machine is sent a code from the bank handling the transaction? These range from incorrect PIN, expired card, suspected fraud and more. These are some examples of response codes from a Commonwealth Bank credit card:

These examples are taken from Commonwealth Bank documentation, keep in mind that these may vary from bank to bank, and different EFTPOS machines at your chosen retailer.

Who to contact when your credit card transaction is declined

If your card is declined, it's still best to get in contact with your bank first to confirm exactly why it was rejected and what you can do to resolve the issue. Use the table below to find the relevant contact details for your credit card issuer.

A declined credit card can be an embarrassing and inconvenient occurrence, but usually the bank puts it in place to protect your finances. If you've had a transaction rejected, make sure to get in touch with your bank immediately to report the issue and discuss your options.