Reasons Why Issuer Declines Happen


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Credit card declines are not only frustrating but costly for a merchant. An issuer declined message from a credit card issuing bank means you’ll lose revenue from the canceled transaction, and you may also need to pay additional fees if you ignore the message. Not to mention that the failed transaction comes with a chargeback fee that also affects your chargeback ratio.

When a credit card is rejected, a merchant receives a unique code, and a short message such as “card issuer declined” or “transaction declined” shows that the issuer of the credit card has put a stop to the transaction. In some other instances, you may get a merchant override decline message. But what does merchant override decline mean, and why would a card issuer rejection happen?

In this article, we’ll discuss what is a card issuer decline, the various reasons why it happens, and what you can do to prevent it.

What Is an Issuer Decline?

Reasons Why Issuer Declines Happen

If in your business you accept credit cards as one of the payment methods, you’ve likely experienced credit card issuer declines. When a credit card is declined, you’ll often receive a response code and a short message that details the reason for the rejection. It means that the card issuer has declined, is unwilling, or unable to authorize the transaction.

In other instances, you may get a “merchant override decline” message meaning that although the transaction has been approved by the credit card issuer, the merchant bank has declined to authorize it.

Card issuer declines can be classified into two categories:

  • Soft declines – Soft declines occur when a card insurer places a temporary hold on the credit card transaction. This often happens if the customer’s account doesn’t have sufficient funds or due to network connectivity issues from your end or the card issuer’s end. A soft decline is often resolved by retrying the transaction.
  • Hard declines – A hard decline occurs due to more serious issues such as fraud or using a stolen card.  In this case, the card issuer will be unwilling to authorize the transaction even after a retry.

There are many reasons why credit card declines happen, and knowing how to stop them can help save your customer’s face and also help you as a business avoid financial losses.

Card Declined by Issuer Due to Insufficient Funds

One of the common reasons why a customer’s credit card may be declined is due to insufficient funds. During the authorization of a transaction, the card issuer will check if the customer has sufficient funds to pay for the transaction. In case the funds aren’t enough, then the issuer won’t authorize the transaction. Alternatively, the card issuer may reject the transaction if approving it may put the customer over their credit card limit. For instance, let’s say a customer’s credit limit is $3,000 and they have a $2,500 balance, if they try to purchase goods worth $1,000, then the transaction won’t be authorized.

There is nothing much you can do when it comes to insufficient funds issuer declines. However, you can always request your customers to pay with an alternative payment method such as cash or another card. You can also offer the customer an alternative payment option to help prevent the loss of revenue due to the lost sale. For instance, you can let such customers pay in installments or provide “buy now pay later” arrangements. Mobile payment processing options or the use of apps such as PayPal are other alternatives that can work in such a scenario.

Card Issued Decline due to Incorrect Details

A card issuing bank may also decline a transaction due to incorrectly entered card details. For instance, if the customer has entered their credit card number, billing address, card code verification, or expiration date incorrectly, the transaction may be declined. In some cases, this decline response may come up due to non-existing credit card details.

A quick fix that often works in such a case is to double-check the card details and retry the credit card transaction. Another possible solution that can help reduce incorrect details card issuer declines is to tokenize the payment details of frequent customers. This way, instead of the customer keying their details every time they shop, you can use the already tokenized details.

Other Reasons for Issuer Declines

Other Reasons for Issuer Declines

In addition to the discussed reasons above, card issuer declines may also occur due to a myriad of reasons, as explained below:

No Issuer Decline

A no issuer card response means that the card number is not supported or the card issuer doesn’t exist. Double check the card issuer and the card number and enter the correct details. If you’re using Visa, the card number should always start with 4, while Mastercard card numbers start with 5.

Suspected Fraud

The card issuing bank can decline a transaction if there is suspicious activity on the credit number provided. The issuer will most likely give you instructions on how to proceed after getting this message. Remember, you should never process a credit card transaction with a suspected fraud response unless instructed otherwise by the card issuing bank.

The Card Was Declined

The card issuer may decline a transaction because the credit card used isn’t enabled to pay for online transactions. As a merchant, request the cardholder to contact their credit card company for them to authorize the card for online payments. Also, offer them alternate payment solutions.

A Lost or Stolen Card

The card issuer may decline a transaction because the card owner reported it as lost or stolen. In such an instance, you should first validate the card owner’s identification and then refer them to their card issuing bank. Notably, never retry transactions with a response of a lost or stolen card as this can make you liable for fraud.

Invalid Amount or Invalid Transaction

The credit card company can also decline a transaction if the amount details are entered in the wrong format or field. Always double-check the payment details and ensure the amount doesn’t have incorrect symbols. In case the response persists, request the customer to use another payment method.

Expired Card

This response means that the card has expired and the customer can longer use it. You can ask the customer to switch the card with a new one if they had already renewed the card. In case the customer hasn’t renewed their card yet, ask them to get a new one from their credit card company. You can also request them to pay with alternative payment methods to recapture the sale.

Temporary Hold

A temporary hold decline response occurs due to a temporary lock on the credit card funds by another merchant. This occurs because there is a pending charge on the customer’s account due to a transaction that has not yet been paid.  Most entertainment, hotels, and car rental merchants will put temporary holds on their customers’ accounts until outstanding credit card payments are settled.

A card with a temporary hold is often over its credit limit and can’t be used to pay for a transaction. In this case, you can ask the cardholder to contact their bank and also let them know that they can pay using alternative payment methods.

Consequences of Issuer Declines for Merchants

Merchants need to understand the reasons why credit card issuer declines happen so that they can help resolve them before they occur. For a customer, a declined payment may mean that they won’t be able to pay for the item with their credit card unless they use another payment method. For a merchant, a payment decline negatively impacts them in multiple ways even when it isn’t their fault. For starters, when a credit card is rejected you have to deal with lost revenue from the lost sale.

Besides, most customers will blame the merchant for a credit card decline even if the fault may be the customers. This leaves the merchant with a disgruntled customer who may be unwilling to come back. Further, a card issuer rejection also results in chargeback fees. The card issuer will also add the rejected credit card transaction to your chargeback ratio which results in a higher rate. A very high chargeback ratio will result in the merchant being classified as high risk which can make it harder for your business to get merchant account services.

Based on this information, we advise merchants to try and manage declined transactions. In instances where a credit card rejection can’t be avoided, it’s always advisable to help the customer complete the sale. You can start by explaining to the customer why their card was rejected. This way they’ll understand that it’s no fault of yours. Next, ask them if they’ll be willing to pay for the transaction using another payment method.

Examples of alternative payment methods that you can have for customers include PayPal, digital wallets, cryptocurrency, installments, cash, and ACH transfers. Lastly, help the cardholder get in touch with their credit card company as some of the rejection issues can be resolved with timely communication.


Card issuer declines are frustrating to both the customer and the merchant. When a card issuer decline occurs, your customer will be unable to make the payment using their card and you’ll also lose a sale in the process. Hopefully, after reading this article, you now understand why card issuer declines happen and how you can minimize them.