A credit card block can mean two things: a usually temporary freeze of your card or a portion of your credit limit is put on hold. Both situations can be frustrating but are easier to resolve if you understand how they work.
What Is a Credit Card Block?
Usually, a credit card block happens when a merchant, such as a hotel, car rental company or gas station, places a hold on your card for the estimated amount of the bill. As a result, the card issuer reduces the amount of credit you can access. A hold enables the merchant to ensure you’ve got enough credit available to take care of the charge.
For example, you provide a credit card when you check into a $100-a-night hotel for two nights. The hotel places a hold on at least $200 and might tack on more money to cover incidentals, such as room service. When you pay your bill with the same card you presented at check-in, your final charge may wipe out the block within a couple days. But if you cover the bill with a different card – or with cash or a check – the block could last up to 15 days.
When Can Your Issuer Decide to Block Your Card?
Aside from a hold from a merchant, a card issuer can block or decline charges on your card by freezing your account.
The card might be blocked because the card issuer has detected suspicious and possibly fraudulent activity. But a credit card block also could mean the card issuer has, at least temporarily, shut down access to your account because of something you’ve done. For instance, maybe you’re behind on monthly payments or you’ve made an unusual purchase that flags a fraud alert.
“While having your card blocked is very frustrating and stressful, remain calm and remember that your card company has often done it because they are trying to look after your money and protect you from fraud,” says Ciaran Chu, principal product manager at ACI Worldwide, a provider of payment technology.
Suspected fraud. Oftentimes, a card will be blocked because activity on your account indicates that you’re a potential victim of credit card fraud. Chu says these may be signs of potential fraud:
- A big purchase, such as a TV, follows a flurry of transactions with extremely low dollar amounts. This suggests a fraudster might be testing your credit card before attempting a much larger purchase.
- Transactions from several locations show up in a short period of time. For instance, your account activity might show you gassed up your car at a station in New York and tried an hour later to buy a sofa at a furniture store in Texas.
- Several high-dollar transactions suddenly appear on your card after months of it going unused.
Sophisticated software allows card issuers to regularly analyze your spending patterns and spot potential fraud, according to Chu.
Unusual spending. Out-of-the-ordinary activity on your credit card might be the work of a fraudster. But you also might be engaging in legitimate activity that leads to a card block. Chu and Brittney Mayer, contributor and credit strategist at CardRates.com, say these examples could raise a red flag:
- High-risk behavior: You’re trying to use your card for a transaction with a high-risk merchant. This could include gambling websites, where use of credit cards is severely limited, and e-commerce retailers whose practices are considered shady. Jim Angleton, president of financial services company Aegis Finserv Corp., adds that attempted online purchases of porn or marijuana-related products also can prompt a credit card block.
- Strange behavior: You’re trying to use your card in an odd way. For example, maybe you’ve never paid for an online purchase with your card, but a significant number of back-to-back transactions are being attempted at online merchants. Or maybe you’ve never used your card to withdraw cash at an ATM, but all of a sudden, a number of withdrawals have been attempted at five ATMs during a two-hour window.
- Out-of-the-country behavior: You’re finally getting away for a beach vacation in Jamaica, and you plan to pay for pretty much everything with your favorite cash-back credit card. If you’ve never made purchases in Jamaica and don’t notify the card issuer ahead of time about traveling abroad, the issuer might block your card in an effort to combat possible fraud.
Ordinary behavior. Strange behavior can initiate a credit card block. But so can everyday situations. According to Chu, some of the regular occurrences that can prompt an issuer to reject attempted transactions are:
- You’re trying to make a purchase that would push you over your overall credit limit.
- Your card has expired.
- Your payment is overdue.
- The purchase would put you over your card’s daily spending limit.
What to Do When an Issuer Freezes Your Card
How you react depends on what caused the issuer to freeze your card in the first place. Whatever the situation, though, your first step should be to contact the issuer. You can find the phone number for your issuer’s customer service department on the back of your card or on the issuer’s website or mobile app.
What happens next will vary, depending on the circumstances:
Suspected fraud. “If the charges are legitimate, you’ll need to confirm your identity, and the block will be lifted immediately,” says Mayer. “But if there’s real fraud, your card will likely be canceled, and you’ll be sent a new one with a new account number.”
Your credit card issuer may have an automated system that will prompt a representative to call you about unusual activity on your card or that sends you a text or email alerting you of a block.
Late payments and insufficient credit. If you find out that your card was blocked because your payment is overdue, the easiest solution is to make the payment as soon as possible and bring your account up to date. After the payment has been posted, the card issuer should unblock your card.
As for an insufficient credit limit, you can ask the card issuer to increase the limit so you can make a purchase. You may be able to score a higher limit if your track record with the issuer is solid.
How Can I Prevent a Block From a Credit Card Issuer?
Some answers to this question are easier than others.
If it’s a matter of missed payments, then the answer is simple: Always pay at least the minimum amount due, and always pay on time.
In case you plan to make several large purchases, it doesn’t hurt to inform the card issuer in advance so you can avoid any problems, says Xavier Epps, founder and CEO of XNE Financial Advising. The same holds true if you’re heading to another country; many issuers offer the ability to set vacation notices on their websites or mobile apps. However, some issuers no longer need travel notices.
On top of that, be sure to sign up for email or text alerts from your credit card issuer to let you know suspicious activity has been identified. Chu adds that you should download your card issuer’s mobile app if one is available. This way, you can keep on top of account activity when you’re on the go and can easily set preferences for use of your card, such as disabling online transactions.
Also, be mindful of your spending activity. “Stay ahead by knowing that certain trends, like bouncing from store to store or (dealing with) unfamiliar merchants, may trigger a block,” Epps says.
And if you know that a purchase will put you over your card’s credit limit, contact the issuer ahead of time to seek a credit limit increase.
What Can I Do to Ease the Burden if My Credit Card Is Blocked?
It’s wise to carry another credit card or debit card – or even cash – in case you run into a block, experts say. This lets you complete a purchase even if your payment is declined.
Chu suggests making sure your contact information, such as your cellphone number and your email address, is up to date so your card issuer can easily reach you about a blocked card or another issue.