Staff Contributor Having a conflict with your co-parent or partner? - Start Neutral Mediation

Your Account Was Closed By Your Co-Parent

If you still share a joint credit card account with your co-parent and haven't undergone financial separation, it is within their legal rights to close the account to prevent any liability for charges made by you. Contact your bank to verify if the account has been closed. If so, consider using alternative payment methods such as cash, checks, debit cards, PayPal, or Venmo for your purchases. You might also need to apply for a new credit card solely in your name, or preferably, wait until after the separation of finances.

 

Your Account Was Closed By Your Bank Or Credit Union

If you attempt to use a card and it gets declined, there's a possibility that your account was closed without your awareness.  Credit card issuers have the authority to close  accounts for various reasons including inactivity, too many missed payments, or just the general economic conditions.  Although closures sometimes occur inadvertently, resolving the issue requires reaching out to your card issuer. You should ask your bank or credit union the reason for a decline.

To prevent your account from closing unexpectedly, you must keep it active and in a good standing.  You must also consider setting up auto-pay for one or two regular purchases, such as a streaming subscription or your phone bill, and ensure that you pay off the card in full each month. 

 

You Provided Inaccurate Credit Card Information

Occasionally, errors may occur when entering your credit card information, particularly during online transactions where manual entry is required. 

Before completing the purchase, carefully review your credit card details, including the card number, billing address, authorization code, and any other pertinent information. If you utilize a virtual wallet, explore options such as Apple Pay, which can streamline the checkout process by eliminating the need to re-enter all these details.

 

Your Used An Expired Credit Card

Credit cards come with an expiration date, and if you try to use a card after it has expired, the transaction will be declined. A similar scenario occurs when you receive a new card to replace an old one, leading to deactivation of the old card. Even if the old card hasn't reached its expiration date, it will deactivate after a certain period, preventing you from using it.

Should your credit card expire without the arrival of a replacement, it is advisable to get in touch with your bank or credit union to request a new card.

 

You Have Reached The Credit Limit 

Credit cards typically come with a designated credit limit. If you're new to credit card usage or utilizing a secured credit card, your limit might be lower than that of someone with an extensive credit history. Consequently, you could quickly approach your limit after just a few purchases.

Another scenario to consider is if you and your ex-partner still share joint finances and haven't undergone the separation of finances process. In such a case, even if you haven't exceeded your spending, your ex-partner may have.

To avoid potential issues, it's crucial to keep a close eye on both your credit limit and your spending on the card. A recommended practice is to maintain your credit utilization at 30% or below. This not only conveys to credit bureaus that you're not maxing out your credit limits but also signals to your card issuer that you manage credit responsibly. Elevated credit utilization, particularly if you carry a balance from month to month, can present a higher level of risk to your credit card company, potentially leading to a lower credit score and reducing your chances of obtaining a higher credit limit in the future.

Additionally, expedite the separation of finances with your ex-partner and, subsequently, consider applying for a new credit card.

 

You Didn't Activate A New Card That You Received

Failing to activate your new card will lead to a declined transaction. Whenever you receive a new card, it is essential to activate it. Review the instructions provided, often found on a sticker attached to the card, which typically includes a phone number to call or a website to visit. Activate your card promptly to ensure that when you are ready to use it, you won't face any transaction declines.

 

You Have Fallen Behind On Payments

Falling behind on payments or consistently being late in making them may prompt your credit card issuer to freeze your account, preventing further purchases. It's crucial to note that, even if you haven't maxed out your credit limit, making at least the minimum monthly payment is mandatory to maintain your card's good standing. A good standing status allows you the freedom to use your card as needed, so any delay in payments could hinder your ability to do so.

 

Fraud Prevention Thinks Your Purchase Is Not Yours

Transaction history serves as a valuable tool, providing your credit card issuer with insights into your usual spending patterns. They leverage this information to create a fingerprint of your purchase behavior, enhancing their fraud prevention system to identify and weed out any potentially suspicious activity on your account. Should you endeavor to make a substantial credit card transaction for an item not in line with your typical purchases, your issuer may flag it as potential fraud and decline the transaction.

To ensure a smooth checkout process and preempt any hurdles, it's advisable to inform your credit card company in advance if you have plans for a significant purchase. This proactive step can help prevent unnecessary disruptions during the transaction.

 

You Are Shopping Out Of Town

Much like with large transactions, your credit card issuer's fraud prevention system may analyze your purchase behavior to flag out-of-town purchases. This is why certain credit card companies mandate that you inform them of your travel plans, whether it's within another state or to a different country. Notifying them in advance ensures that the purchases made in the specified location are legitimate and not fraudulent. Providing this notice to your credit card company eliminates the risk of encountering a declined credit card during your travels.

 

Your Credit Score Has Dropped Or You Have Too Many Liabilities 

Credit card issuers routinely conduct credit checks on their customers. If you've accumulated excessive debt in your other accounts or if your credit score has decreased, your bank or credit union might opt to reject any transactions on your credit card until the underlying issue is resolved.  If your credit score has fallen due to divorce you should start taking the required steps to improve it and apply for a new credit. 

 

Your Have Too Many Holds That Are Blocking Funds

Certain transactions, such as fueling up at a gas pump or making reservations for hotels and rental cars, often entail sizable deposits that can temporarily tie up hundreds or even thousands of dollars on your credit card. Although it may appear as if you've reached your credit limit during these transactions, the reality is that these holds are typically released once your dealings with the respective business are concluded. However, these temporary holds can lead to declines for other transactions during the interim.

 

Steps To Take If Your Credit Card Is Declined

What steps should I take if my card is declined?

First and foremost, double-check that you've entered your information accurately. If the issue persists, reach out to the customer service number provided by the bank or credit union that issued the card. They can guide you on understanding the problem and offer solutions to address it. In the meantime, if resolving the card issue will take time, consider using an alternative form of payment if available.  If you are in a physical store, unblocking the checkout lane should be a priority while you are resolving your credit card decline issue.

1. Contact the credit card company: Dial the number provided on the back of your card to speak with your credit card company. Explain that you attempted to make a purchase, but your card was declined, and seek clarification on the reasons behind it.
2. Seek resolution: Inquire with your issuer about steps to rectify the situation. This could involve making an immediate minimum payment or providing information about your location to verify that the attempted purchase was genuine.
3. Opt for a different payment method: If you possess an extra credit card or an alternative payment option like cash, a debit card, or a PayPal account, utilize it to finalize your transaction. This enables you to continue with your purchase while providing the chance to get in touch with your credit card issuer at a later time. If an alternative payment method isn't available, you might want to reconsider proceeding with your purchase.

 

Can I minimize the likelihood of my card being declined?

1. Collaborate with your co-parent to address any issues. If you are in the process of divorcing and have not yet separated your finances, it is advisable to coordinate with your attorney and co-parent to establish a written agreement. This ensures that there are no unexpected closures or significant purchases on the shared credit card account. 
2. Obtain an individual credit card. If effective communication with your co-parent is challenging on this matter, it's advisable to acquire a separate credit card.
3. Stay informed about your account status and be aware of your card's expiration date. Typically, your bank or credit union will dispatch a replacement card before the current one expires. Ensure prompt activation upon receipt. If the expiration date is approaching and you haven't received the replacement, contact your bank or credit union to trace its status.
4. Regularly monitor your accounts, including your spending, account balance, and proximity to your card's credit limit—the maximum approved credit amount. Insufficient funds in your bank account or reaching, surpassing, or nearing your credit card's limit could lead to a declined card.
5. Take advantage of any fraud alerts offered by your bank or credit union. These alerts can notify you of potential issues before your card faces a decline. Significant transactions, purchases from foreign sellers, or suspicious activity might prompt the bank or credit union to secure your account to prevent fraud. If you're planning to travel or make a substantial or uncommon purchase using your card, inform your bank or credit union in advance. Despite these precautions, your card might still face a decline due to a block or hold. If feasible, carry an additional card as a backup in case the primary card encounters issues.

 

How to Prevent Card Blocking / Fund Holds

To avoid card blocking, take the following steps:

1. Inquire about blocking: When using your card at hotels, rental cars, or establishments requiring advance card authorization, ask about the potential placement of a block. Seek details on the amount, how it's determined, and the duration of the block.
2. Reduce block duration: If feasible, use the same card to pay associated bills, like hotel or rental car charges, to replace the block with the final charge within a day or two. Paying with a different card, cash, or check may extend the block duration up to 15 days.
3. Consult your bank or credit union: Clarify the blocking policies with your bank or credit union. Inquire about the duration and types of businesses permitted to impose blocks. For debit cards, explore overdraft options, understanding if the plan automatically covers overdrafts, its operation, and associated costs. Note that choosing a plan covering overdrafts may involve fees and interest until repayment, but some institutions offer reduced or eliminated fees. 

Warning:  This post is neither financial, health, legal, or personal advice nor a substitute for the advice offered by a professional. These are serious matters, and the help of a professional is recommended as it can impact your future.