Top 5 Reasons You May Have Had a Refused Credit Card Charge

Most consumers have gotten used to using their credit cards for everyday purchases and are shocked when a charge they are attempting is denied. Many times this can happen because you are approaching your credit limit but there are a number of other reasons you may have been refused credit. Knowing what these are will help you plan better and avoid this type of embarrassment in the future.

Unusual Purchases
Credit card companies track your spending in detail and build a file on the typical use of your card. They do this primarily to help them spot fraudulent activity on the card quickly so they can limit their losses. Even though you are not responsible for the purchases you didn't make, the lender still needs to try and decline ones they suspect are not legitimate. In their haste to minimize these losses they may occasionally deny a real charge you want to make. This usually happens when you are trying to use the card for an unusually large purchase. If your typical charges all fall under a certain limit and then you try to use the card to make a major purchase, it may be declined by the lender. To avoid this problem you should always call the credit card company} to alert them to the possibility of a larger than normal charge on the card before heading out to the store

Trying to use a credit card out of your normal purchasing area can also result in you being refused credit. This can happen if you are booking a trip, and a foreign hotel places a charge on the card for a reservation. The credit card company} may flag this as fraud and deny the charge. This could even happen if you were traveling to another town near your home and did more than your usual amount of shopping in a day. Because the credit card company} may view this use as unusual, they could deny the charges. The formula these lenders use for detecting fraud varies widely between companies so it's hard to predict these thresholds. The best thing you can do is contact the lender before making these purchases to alert them that you may be shopping with the card.

Pending Authorization
Some merchants will place a temporary hold on your card for the rental of a car or hotel room. When you check out of the room, they will put through the actual charges for your stay. The temporary hold they put on the card was simply done to make sure you'd have enough credit left on the card to satisfy your bill. The challenge is that this hold might take a few days to age off the card and will count against your credit limit. If you are doing a lot of traveling, these holds may force you close enough to your limit to have a charge denied. The best thing you can do it contact your lender and let them know you'll be traveling so that you don't suffer the embarrassment of having your card refused at the front desk.

Changes to Your Credit Report
You credit report is the file that all lenders used to qualify you for credit. When you are first issued a credit card, this file was used to make the determination as to your limits and interest rate for the card. Any changes to this report may affect the credit cards you already have and these changes can happen quickly. If you have something reported by one of your lenders that negatively affects your credit score, other lenders may lower your limits or even cancel your card. All of your lenders are alerted when these changes take place and may even make these changes without alerting you beforehand. This means you may be out to dinner and refused credit when you attempt to pay for the meal using one of your cards. While this can be embarrassing, correcting the problems on your credit report will allow you to eventually use the card again.

Late or Missing Payments
Lenders are very serious about receiving their payments on time and missing even one payment date can have a devastating impact on all of your accounts. Because all of you lenders report these late payments to the same credit agencies, they will know immediately about any late payment on another account. They may decide to immediately lower your limit on the credit card they issued you, even if you are current on your payment to them. Avoiding this problem is a simple matter of making your payment on time to all of your creditors.

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