Why Was My Debit Card Declined: Banking 411
How many times have you been in a store and when you go to pay, you were worried about whether or not the payment would process? That is not a fun position for you to be in. It can be embarrassing to have your debit card declined. It can also be scary and frustrating if you think you have plenty of money in your account. There are a few steps you can take to prevent yourself from being in a position where you have a debit card declined. Continue reading to find out the top reasons why your debit card may be declined, so you can understand how to prevent it in the future.
What Is A Debit Card?
Many of you may know what a credit card is, but do you understand what your debit card is? The most important item to understand about a debit card is that it pulls money directly from your bank account. That means every time you make a purchase, money is deducted from your checking account. When people do not understand this, it gets them in trouble and leads to having their debit card declined. Debit cards can be used in all the same places you can use a credit card, even online. When you use a debit card, a hold is put on your bank account for the amount of the sale. The merchant where you make the sale sends the transaction to their bank, which pays them. Their bank reaches out to your bank to get the payment amount.
When it comes to using a debit card, it helps to have a complete understanding of how much money is being taken from your checking account. When you are using your debit card for items such as hotel rooms and rental cars. Those types of transactions make a difference because the vendor puts a hold on your debit card, which means they are taking a set amount of from your bank account and holding it so that you do not have access to the money. Typically, the vendor may hold more money than is really needed so they can ensure all the money will be there when you actually require the service.
Reason #1 – Not Enough Money
I am going to go out on a limb here and guess that the number one reason you get a debit card declined is because you do not have money in the account. The money is withdrawn from your available checking account balance. When there is not enough money in the account, your bank denies the transaction. It may be surprising to you that there are a number of ways that your bank account can have insufficient funds. I am sure that the first thing you think of is you just do not have any money and you should not purchase this item. There are some other considerations.
If you have a bank account that you do not use often and perhaps only use for online purchases, you may not have a large amount of money in it and if you are not paying attention, your account may run out of money. If that bank account charges you a monthly fee, you may run out of the money much faster than you expect. One way to combat this is to open a checking account that does not charge any type of fee.
Another consideration is that if you have gone over your available balance, your bank may allow the transaction but charge you fee for having an overdraft. Some banks continue to charge you a fee every day that you are in the negative for your account. Those fees add up quickly, especially when you do not know you are at a negative balance. Many banks offer overdraft protection which offer a few different ways to protect you. You may not have to pay a fee if you have an overdraft. The bank may not allow any type of overdraft at all, if you have overdraft protection.
Reason #2 – Maximum Limit
Many banks put a limit on how much you can withdrawal each day. Some banks also put a limit on how much you can spend on purchases each day. The limit for daily purchases is usually higher than the limit of a cash withdrawal. Once you have reached the limit, your transaction will not happen and the result is the debit card declined. You should always understand the limits that your bank imposes on you. When you have an understanding of those limitations will prevent you from having your transactions declined. If you know that you are going to go over the limit, contact your bank and they may be able to extend your daily limits so that your transaction will not be declined.
If you are looking for ways to avoid having your debit card declined, you may want to research some free financial advice. It is always a good idea to understand how your bank charges you for various transactions. If your bank has a mobile app, it is a great idea to download that so you can keep an eye on things.
Reason #3 – Fraud
Fraud is another reason why your debit card declined the transaction. Keep in mind, while this may be annoying, your bank is trying to protect you and your money. It can be incredibly frustrating, but your bank may decline a purchase if they think it is questionable. Some banks will hold the transaction and attempt to contact you if they are not sure if it is legitimate.
Your bank may decline a charge if it is not a typical charge for you. If it is a large purchase, from a new place, or a bunch of purchases together from the same vendor, this may prompt your bank to decline your transaction and freeze your account. They will not release the freeze until they speak to you, verify your identity, and verify the purchases. One way to avoid having a freeze on your account in this instance is to contact your bank ahead of time and alert them about the transactions you plan to make. If they know then they will not block the transaction. This is, of course, providing you have money in the account.
While this may seem annoying, fraud protections are important. You should make sure your bank offers some type of protection to you. You want to find out about those features before you open an account.
Reason #4 – Incorrect Information
When you have a debit card declined, you may think your debit card not working properly. There may be some truth to that. The problem could be the information you are entering is incorrect. I cannot tell you how many times I have entered in a wrong personal identification number (PIN). When you get a new debit card, they ask you to create a PIN. This is usually a four digit number that you use to prove this is your card and basically unlock it.
Think of it like a combination to get into your locker. The money in your account is locked and you have to enter the code to unlock it. However, you have to enter the correct code, or your transaction may be denied. Some vendors tell you the PIN is incorrect, so you know. Others do not tell you in case it is a stolen card. They do not want to give the thief encouragement to continue to figure it out. You should make the PIN something you can remember, but not something that will be easy for others.
Often, online information incorrect and that can cause your card to be denied. This is more common than you realize. It is so easy to type one wrong number and the entire transaction is denied. You may also need to enter a user name and password, or an address and zip code. If one of those letters or numbers is wrong, the transaction is denied. You should always double check any information you enter when shopping online to prevent the transaction from being denied.
Reason #5 – Expired Card
Another reason for your debit card declined is that it may be expired. Most of the time, your bank will send you a new card before the old one expires, but not always. Sometimes, your card may slip between the cracks and the bank misses sending you a new one. Or the new card may get lost in the mail. Usually, the bank notifies you that a new card has been sent to you so you can watch for it. That does not always happen. You are ultimately responsible for your card and making sure it is not expired.
You could check the dates on all of your cards and mark on your calendar when they are going to expire. Then you might want to set a date about two months ahead of that to contact your bank and request a replacement card. Once you get the new card and it is activated, destroy the old card. Do not just throw it in the trash. You should shred your old card.
Reason #6 – International Purchase
You may find your debit card declined when you make a foreign purchase. Typically, your debit card is backed by Mastercard or Visa and they are usually taken when you travel abroad. That is not always the case, though. If you are planning to travel overseas or anywhere, you should make sure contact your bank and let them know. If you alert your bank that you are traveling and will make purchases, you have a better chance that they will not be declined. The last thing you want is to travel and find yourself in a position where your cards are declined and you have no money.
Before you travel, you want to find out where your card is accepted. You also want to know where you can access cash. You should also find out if your bank charges you a fee for foreign purchases. If so, make sure you know what the fee is. It can be more than you expect.
Reason #7 – Technical Problems
You can find you debit card declined when the bank is having technical difficulties. While this is not something you caused, or can even fix, it impacts you and your ability to make a purchase. There could be a number of reasons why a bank is having problems that causes your purchase to be declined. It could be that their server is down, or they are having problems with their internet. There may be too many people trying to process transactions all at one time. The bank could have some type of power failure. Since we live in a world driven by internet and cloud technology, it does not take much to bring business to a screeching halt.
While banks do everything they can to prevent it, including have back up servers and procedures in place, sometimes it still happens. The result could be that your debit card is declined. If you do not have another means of payment, you may have to wait until the bank is up and running before you can buy your item.
How Can I Avoid My Debit Card From Being Declined?
One of the most important things you can do to prevent your debit card declined is to make sure you have money in the bank. You must make sure you always have a padding and you are not spending all the money you have. The best way for you to manage this is with a budget.
If you always know how much money you are spending, then you will always know if you have money in the bank. You should create a budget that allows you to save money and pay all of your bills first. After you do those two, you can decide how much money you have to spend. When you do that, you should make sure there is always a little something extra in your account, just in case. You never know when you might get hit with fees, or have some debit that you forgot about. If you always have a plan, or a budget, in place, you should be able to avoid situations where your card is declined.
What Do I Do If My Debit Card Is Declined?
The main thing you should do when your debit card is declined is to remain calm. It is much easier to think about next steps when you are calm. If you can, complete your transaction with a different payment method. Once you have paid the bill and can get to a more private place, you can determine why your debit card was declined. I know this can be stressful minutes for you, but it may not have happened for a terrible reason. It could be that the bank is having some difficulties, or that they froze your account in case they were fraudulent charges. The best thing you can do is calmly find out what happened. Once you determine why your debit card was declined, then you can decide what to do about it.
Things get a little trickier if you do not have a back up method to pay for your items. If they are items you want to purchase, you simply cannot buy them that day. Maybe the vendor can put the items aside for you to come back and purchase them at a later time. If you have consumed the goods, such as dinner, already and you do not have another method of payment on you, you should consider calling someone to come pay the bill. If you cannot do that, perhaps you can make arrangements to come back the next day with money, or mail a check. Remain calm and pleasant while trying to work with the vendor to find another solution.
Having your debit card declined is no fun at all. I have been there when I wanted to buy something and my card was declined. I had no idea why and I became flustered. Fortunately, I have another method of payment and I could get my items and go to the car to call the bank. It turned out that my bank froze my account because there was what they believed to be fraudulent activity on my account. There were, in fact, purchases in another country that I did not make. Because my bank acted swiftly, no money was ever taken from my account. Remember, stay calm and find out the cause. Then you can determine the best way to fix it.
Julia Peoples is a long-time business manager focused on providing decision making assistance to the public. She works with people at key points of their lives who are making important retirement and financial decisions. She has had many articles published that educate the public on sound financial decision making.
Julia writes for those who are working towards financial freedom or a better understanding of how finances work. She has shared her financial insights with individuals on a one on one basis for years.