Credit cards provide a convenient way to shop, and are commonly accepted by merchants of all sizes. This practice is not without some risk, since it’s possible for an approved charge to be dishonored and reversed by the credit card company. When this happens, the merchant has to return the money to the credit card company, so he ends up without the cash or the goods. A declined credit card is different and doesn’t hurt the seller.
Declined Credit Card
A credit card may be declined for many reasons. One very common reason is that the cardholder has reached his credit limit. When a card is declined, it means that a specific purchase cannot go through, but it doesn’t mean that the card itself is no good. Once you pay the balance down or correct other issues, you can use the card again.
Dishonored Credit Card
When a credit card is dishonored, it means that a previous transaction was invalid and will not be honored by the card issuer, even though the transaction was previously approved. Also known as a chargeback, this can occur when the card in question is reported stolen or in the case of fraudulent use. A transaction may also be dishonored if the cardholder reports a billing error to the credit card company, such as finding charges for the wrong amount or for items he didn’t purchase on his card statement.
- New York State Office of General Services: Electronic Value Transfer Contract (EVT)
- New York State Office of General Services: Credit Card Chargebacks
- State of California Department of Justice: Credit Card Chargeback Rights
- Bankrate: 5 Tops for Handling a Declined Credit Card
- Discover. "Why Was My Credit Card Declined?" Accessed Jan. 28, 2020.
- Consumer Financial Protection Bureau (CFPB). "I Just Learned That My Card Issuer Has Closed My Account Without Giving Me Notice. Can They Do That? What Can I Do?" Accessed Jan. 28, 2020.
- Capital One. "Here's What You Should Know About Late Credit Card Payments." Accessed Jan. 28, 2020.
- Discover. "Why Do Credit Cards Expire?" Accessed Jan. 28, 2020.
- Capital One. "Four Common Credit Card Fraud Alert Triggers." Accessed Jan. 28, 2020.