How to avoid declined credit card transactions

Use this guide to understand why your credit card purchase may be declined and what you can do to avoid 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 reasons your credit card transaction may have been declined

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

1. Exceeded your credit limit

Every credit card has a maximum credit limit. While some credit cards will let you spend beyond the limit and will charge you an overdraft fee, others will decline the transaction if you spend beyond the amount. 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.

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. Spent beyond your daily limit

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.

4. Using your credit card overseas

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.

5. 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.

How to use EFTPOS response codes to understand why your credit card was declined

When your card is declined, 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.

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 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.

Images: Getty