A credit card might be declined for a variety of reasons, including suspicion of fraudulent activity or a maxed-out credit limit. Here’s why it might be happening to you.
There are many different types of card declines. The most common reason that a card is declined is insufficient funds or credit, accounting for 44% of declines in an Ethoca study. Businesses can’t do much in these cases, since the issue originates with the cardholder. Offering buy now, pay later options, which Stripe supports, can help minimize declines due to insufficient funds. Beyond that, the cardholder may need to move money from another account to the account with insufficient funds, in order to complete the transaction.
Another common reason for card declines is incorrect data. This issue is more common with online transactions, where cardholders are required to enter their card number as well as the card’s CVV and expiration date. One in five card declines occur when a customer makes a mistake and inputs incorrect information. This is easily resolved if the cardholder re-enters their information correctly.
Card payments can also be declined for suspected fraudulent activity, which can be triggered by large purchases or a large volume of transactions over a short period of time. The cardholder can resolve this issue by communicating with their issuing bank and confirming their identity, which will authorize the charges.
Sometimes cards are declined because the card has not been activated yet, which can be resolved if the cardholder completes the specified activation process. Similarly, a card that has expired will be declined, and cardholders will have to use another payment option. Damage to a card’s chip or strip can also lead to a decline if the terminal is unable to read the card. Other options, in this case, are manual entry of card data or contactless payment, if available.
A card will also be declined if the terminal is not compatible with the card network associated with the card. For example, if the card uses the American Express card network and the terminal does not communicate with American Express, then the transaction cannot be processed. Solutions like Stripe work with most major card networks, both in the US and globally, which helps avoid declines related to an unsupported card network.
What should I do if my card is declined?
First, and obviously, check that you entered your information accurately. If there’s still a problem, contact the customer service number for the bank or credit union that gave you the card. They may be able to tell you what the issue is and how to fix it. If it takes time to resolve any issues with your card, you might be able to pay that charge with another form of payment, if you have one.
Additional security for credit card payments
From 1st November 2023, all credit cards will need to have 3 Domain Secure (3DS) authentication enabled (by your bank), before you can make a payment. If you do not have 3DS enabled, you will receive the following error that will prevent you from completing your payment.
Error performing card authentication. Please use other card/payment method
3DS is a password-protected authentication system, used to confirm your identity, before a payment is deducted. If you need help to enable 3DS, or more information about this security feature, please contact your bank. The Department cannot provide advice or assistance to enable 3DS on your credit card.