How to Deal With a Declined Card

The whole scenario plays out like a bad dream: Standing at the checkout counter as you wait to pay and leave, the cashier swipes your credit card, pauses, then frowns. You feel your own heart sink as you glance back at the line of people forming behind you and realize what is happening. Your card has just been declined -- and you don't know what to do.

It's so embarrassing. You're no deadbeat. You pay your bills on time...or so you thought. Yet here you are, receiving disapproving looks from every angle because your card is apparently no good. What now?

1. Call Your Bank on the Spot

The first impulse when a cashier informs you that your debit or credit card has been declined may be to mutter "never mind" and head straight out the door, leaving your desired purchase behind. However, there are a number of reasons why your card could be declined, and they don't all require irresponsible spending on your part. A quick call to your card issuer can have the problem resolved within minutes.

Suspected fraud, for instance, is a common explanation. If you have ever traveled out of the state or country and attempted to make a purchase, you've likely experienced a declined credit card. A freeze due to "fraud" can also happen if you attempt to make an unusually large purchase or several purchases within a short period of time. Then there's always actual fraud, in which case you'll be very thankful the bank put a freeze on your card.

Finally, it's possible for a card issuer to experience technical problems that result in customers' cards not working for a short while. Usually when this happens, the bank is quick to fix it, but confirmation that the hitch is on their end and not yours can certainly make you (and the cashier) feel a lot better.

2. Carry Back-Up

The embarrassment of having your card declined at the register can be eased if you know you have a second form of payment available.

Never leave the house with only a card, just in case. Whether you keep an emergency $20 stashed in your wallet or a spare credit card used for only such occasions, a back-up payment option will at least get you out of the store with the least bit of a scene so you can work on resolving the problem of your declined card at home.

3. Offer Your Information

Of course, hindsight is 20/20, which is why your card will probably be declined on that one day you forget to carry cash. And if you're at a restaurant or similar establishment, where the goods can't exactly be handed back when your card is declined, the situation can be especially tricky.

Before offering to wash dishes, however, ask the merchant if you can leave your ID information with them while you go scrounge up payment. In the case of temporary technical issues, they may even be satisfied with taking down your card info and running it through later in the day.

Prevent Your Credit Card from Being Declined

Of course, what would be even better than smoothly handling a declined credit card is to never end up in this situation in the first place. Here are simple steps you can take to prevent the most common triggers of a declined card:

Alert your bank when you plan to travel:

If you know you're going to be traveling, tell your bank where you're going, and for how long, ahead of time. This will prevent the fraud prevention department from freezing your card when you attempt to make your first out-of-town purchase.

Plan your purchases: A string of several purchases, or a small purchase followed by a very large one, are red flags to your bank. Break the habit of whipping out your card whether you're buying a pack of gum or big screen TV, and save the plastic for key purchases only. Besides, even if your card comes with one of the better interest rates available today, having no balance and no interest payments to worry about is even better.

Keep track of balances: Whether your bank account is depleted or you've hit your credit limit, having insufficient funds is definitely the worst cause of getting declined at the register. It's a sign that you aren't paying enough attention to your spending, so keep a closer eye on transaction histories and account balances to prevent it from happening again.

Remember, embarrassing financial situations can happen to the best of us -- it's how we respond to them that makes all the difference. If your credit card is declined, know that you aren't the first person to experience the problem and certainly not the last, but do make sure you nail down the problem and work to remedy it right away.

(Editor's note: If your prepaid debit card is declined, you might be having a different problem.)