Why Is My Debit Card Declined When I Have Money on It?

Ashley Ferraro, Consumer Operations
Aug 25, 2023
 • 
10
 Min Read

Having your debit card declined during checkout is inconvenient, especially when you know your checking account has the funds for the transaction. However, there can be many reasons why a debit is declined regardless of the available funds. The situation is actually pretty common, so “Why is my debit card declined when I have the money?” is a question frequently asked by many consumers.

A 2022 survey on Digital Economy Payments found that less than 30% of declined payments were related to insufficient funds. The leading causes were technical errors and suspected card fraud.

To clarify the issues behind declined debit card transactions and present potential solutions, this guide will answer:

  • Why does a debit card get declined?
  • What should you do if a debit card is declined?
  • How should you proceed with a declined debit card?

What Is a Debit Card Decline?

A debit card decline happens when a transaction cannot be processed because the payment gateway, the processor, or bank has declined the transaction.

Card declines can be soft or hard. A soft decline happens due to a temporary authorization failure. In most cases, the transaction will go through the second time around.

A hard decline suggests that the bank or the card network deliberately blocked the transaction. Before you can use your card again, you must determine and fix the underlying issue. 

Source: RDNE Stock project

7 Potential Reasons Why Your Debit Card Is Declined

Having insufficient funds is the most obvious reason behind a card decline. Some checking accounts offer overdraft protection to help you pay for a purchase even when you have insufficient funds. The option is usually unavailable beyond a limit or for multiple transactions within 24 hours.

Besides fund insufficiency, here are some of the most common issues behind a card decline:

  1. There was a manual error.
  2. You’ve reached your daily purchase limit.
  3. Your debit card expired or is inactive.
  4. The bank finds the purchase suspicious.
  5. Your card is suspended.
  6. The merchant does not accept your card.
  7. Technical issues prevented the transaction.

There Was a Manual Error

Human error is the most common cause of declined online transactions. Entering mandatory details like your debit card number, expiration date, security number, and billing address during online checkouts leaves plenty of room for typos.

Cross-check the card information you have entered, as repeated incorrect entries may cause your card issuer to flag or suspend your card due to suspicious activity.

You Reached Your Daily Purchase Limit

For security reasons, traditional debit and prepaid cards have a daily purchase limit between $400 to $25,000. This limitation minimizes risk if the card is lost or stolen. 

Your card’s limit depends on the provider. The table below displays the daily spending limits of debit cards issued by major banks.[1] This breakdown can help you choose the institution corresponding to your spending habits.

Bank or Financial Institution
Daily Purchase Limit
Bank of America
$1,000 to $5,000
US Bank
$10,000
TD Bank $2,000
Capital One $5,000
Regions Bank $5,000

Your Debit Card Expired or Is Inactive

Every debit card has an expiration date, beyond which the card won’t work and will need to be replaced. Once you’ve received a replacement or new debit card, the card may need to be activated before transactions go through.

If you recently started using a new card, you typically must first activate the card online, over the phone, or at an ATM. The activation instructions should come with the card. 

The Bank Finds the Purchase Suspicious

Your bank may block the transaction as part of its fraud protection measures. The three most common situations that result in a bank-initiated decline are as follows:

  1. You are using the card from uncommon geographical locations like a new country. Consider notifying your bank before traveling abroad.
  2. You are making a larger-than-usual transaction that doesn’t match your regular spending pattern, and the bank suspects it’s not you.
  3. You have entered the wrong PIN code multiple times. 

Your Card Is Suspended

Your bank may have suspended your card following the detection of suspicious activity. Many credit and debit cards get suspended because the website they were used on had a data breach, compromising card numbers.

The Merchant Does Not Accept Your Card

It’s not uncommon for payment terminals to reject incompatible cards. For example, if a terminal only accepts Mastercard® and Discover® cards, those from the Visa® or American Express® networks would automatically be declined. Another similar instance is when a card machine cannot read chip-enabled cards.

A bird’s shot of a person holding a white, chip-enabled payment card over a card reader

Source: Towfiqu barbhuiya

Technical Issues Prevented the Transaction

Technical errors often lead to the soft decline of payment cards. Here are some common issues you may encounter:

  • A broken or ill-configured card reader
  • Poor internet connection
  • Power outages along the transmission route
  • Bank servers overloaded with transaction requests

What To Do if a Debit Card Is Declined

If your debit card is declined, double-check the entered information (if transacting online) and retry the transaction to see whether it was a soft decline. In case you suspect it is a hard decline, check if:

  • The card has expired or is inactive.
  • You have met your daily purchase limit.
  • You’re using the right debit card (if you manage multiple cards).

If you can determine the underlying cause, take the steps outlined in the following section to amend the situation.

In case you’re unsure why your card is declined, you must contact your bank or card issuer. The customer support representative will typically ask for the following details to confirm your identity:

  • Debit card number
  • Full name
  • Physical address tied to your account
  • Social Security number
  • Answers to security questions (if you’ve set them up beforehand)

The representative will analyze your issue, determine the reason behind the card decline, and specify the steps to fix the issue.

How To Fix a Declined Debit Card

Depending on the underlying cause, a declined debit card may be resolved immediately or may take several days. For example, if a debit card transaction was blocked by your bank’s fraud rules that were triggered by a large single purchase, the transaction will go through after you’ve assured the bank that you’re attempting to use the card.

In other cases, you may be asked to get your debit card replaced after a fraud review is conducted. Unfortunately, fixing your card issue is not always up to you. In the case of suspected fraud, you may have to wait for weeks before the bank completes the investigation and unblocks your card. It’s good to have other debit cards or backup payment methods like credit and prepaid cards to avoid inconveniences.

How To Avoid Having Your Card Declined

Some declined card issues are beyond your control, but you can take some precautionary steps to avoid them:

  • Keep an eye on your card—Be aware of the card’s daily limit, expiration date, and balance.
  • Give your card provider a heads up for out-of-the-ordinary purchases—If you’re planning to travel abroad or make a big purchase, let your bank know beforehand so that the transactions are not flagged.
  • Reduce exposure to online fraud with virtual cardsVirtual cards are connected to a debit or credit card but have unique credentials, including a card number, CVV, and expiration date. They mask your actual card credentials during online transactions, protecting your real cards from being compromised or flagged in the first place, which is the reason behind many declined transactions.

Besides minimizing the risk of fraudulent activities, some virtual card providers offer useful features to streamline online payment procedures. Privacy, a BBB®-accredited virtual card issuer, helps you manage your digital transactions with ease. 

Privacy Virtual Cards—A New Way To Pay

The online leakage of payment card details can disrupt transaction services and lead to identity theft and cyber fraud. If you want to use your debit card for online payments but have security concerns, sign up for Privacy.

Source: Christina Morillo

With Privacy, you can create multiple virtual cards and pay on various websites without exposing your actual card or banking information. If a website has a data breach, only your virtual card data is at risk, not your actual card information. Privacy gives you an extra layer of protection from cyberattacks with:

  • Merchant-Locked Cards—Merchant-Locked Cards can be used multiple times with the same merchant. Even if the number is stolen, it will not work with other vendors.
  • Single-Use Cards—Single-Use Cards automatically close after you make the transaction. They cannot be reused, so they are convenient for paying somewhere for the first time.

Additional Benefits of Privacy Cards

You can use your Privacy Card to purchase any product or service—locally or abroad—if the merchant accepts U.S. credit or debit cards. Still, the benefits don’t end there because you can also:

  • Close or pause your Privacy Card—Privacy Cards can be closed or paused anytime without affecting the status of your debit card or bank account. This is especially significant for preventing unwanted subscription charges. If you pause or close your virtual card, Privacy will decline all charges from the subscription service in question.
  • Set spending limits—Every Privacy Card can be customized with a spending limit that suits your needs. You can set the card’s monthly, yearly, or per-transaction limit to prevent overspending.
  • Share your card with trusted family members or employees—Since a Privacy Card has a preset and customizable budget, you can use it as an allowance card for your children or a business-expenses payment method for your employees. You are the only person who can set the spending limit and have control over the card’s features. 
  • Monitor transactions effortlessly—You can enable push notifications to keep track of all transactions (approved or declined). Your account dashboard gives you a bird's-eye view of all payment activities and helps you manage your cards from a central station.

We recommend installing Privacy’s Chrome, Firefox, or Safari browser extension to expedite your checkouts. The plugin can create new virtual cards, remember existing cards, and autofill your credentials into relevant fields, significantly reducing the risk of declined transactions due to human error.

Privacy also supports 1Password integration, which helps you store virtual cards and passwords in a secure, encrypted online vault. The platform is accessible on web browsers and Android or iOS apps. Create an account to get started.

A bird’s-eye view shot of a person typing on a smartphone using both hands

Source: freestocks

Setting Up a Privacy Account

You must be a U.S. resident over 18 to be eligible for a Privacy account. Here’s how to set up yours:

  1. Click on the signup button
  2. Add the government-mandated Know-Your-Customer (KYC) details
  3. Request your Privacy Card


Privacy offers the following three tiers:

Plan
Price Monthly Card Limit
Personal
$0/month for domestic transactions
12
Pro
$10/month
36
Teams $25/month 60


The Pro and Premium plans entail other perks, such as priority support and cashback (on select purchases totaling up to $4,500 per month).

References

[1] Sophia Acevedo. Business Insider. https://www.businessinsider.com/personal-finance/debit-card-limits?IR=T, January 21, 2022
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