Friday, 5 January 2018

The clerk looks up at you with embarrassment and says, without quite meeting your gaze, "I'm sorry, this card has been declined. Would you like to try another one or pay in cash?" 

Having a credit card declined is easily the most embarrassing retail transaction there is, especially in front of a friend, loved one, or worst of all, a date.

But just because you've been declined doesn't mean you're an irresponsible person. It doesn't necessarily mean you've bungled your finances and failed to pay on time either —but of course, nonpayment is the common reason for decline.

Other reasons might not be as clear.

What if my card is declined?

Anne Phan, BBVA Compass Director of Issuing, is in charge of the bank's consumer and small business payments activities, including credit, debit, prepaid and personal line of credit payment solutions. She says if your card is declined for no apparent reason, contact the bank using the number on the back of your card. Most likely, you'll get an instant transaction alert from your bank letting you know the dollar amount and the location where the purchase was attempted.

“Some banks have even taken these alerts a step further. They are offering you the ability to acknowledge whether the transaction is fraudulent immediately with a fraud text alert that has the ability to accept a response back to the original text," she says. “If you respond that the transaction is legitimate, they will release the hold and ask that you reattempt your transaction. If you indicate that the transaction was not legitimate they will block your card and ask that you notify them for further research and/or next steps."

If it wasn't fraud, what else could it be?

Phan says that transaction fraud management is a sophisticated process. Most institutions use a layered approach to understanding their consumers' spending behaviors, patterns, and trends, and a comprehensive look at market trends such as type of merchant, merchant location, and known fraud behaviors in or around those two criteria.

For example, if your bank understands that generally you charge $200 a month in your hometown for groceries and suddenly there's radically different activity on your card— like several large purchases at electronics stores far away—it's likely to raise eyebrows and there may be a hold on your card.

How can I avoid declines?

Phan says it never hurts—and it often helps—to notify your bank in advance that you're going to change your spending behavior or if you're traveling.

Some banks (with your permission), are implementing geolocation services that allow the bank to predict the likelihood of you performing the transaction based on the location of your cell phone. “This technology can only be used if you register your phone with the bank that issued your card and the cardholder has authorized the bank to use that information for fraud management services," Phan says. “This service provides the bank with another layer of data that can be used to predict whether the behavior being seen is fraud or not."

The best way to avoid a decline? Keep close tabs on your account and make sure you're not in arrears. It might even make the difference in getting that second date—or not.


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