When your credit card issuer suspects fraudulent activity on your credit card, it triggers a red flag to deny the charge.  Generally, it is a great protection.  But if you are making the purchase and not a thief, it can be frustrating.  Some purchase patterns that could cause your purchase to be denied include:

• A purchase for a small dollar amount, followed by a large purchase. Credit card thieves sometimes make a small dollar “test purchase” followed by big ticket items, so this raises a red flag.
• Multiple purchases back-to-back in a short span of time.
• Making purchases in a new city, in a different part of town, or in stores where you do not normally shop.

Though inconvenient, these protections are to keep you from being a victim of fraud.  Take these steps to prevent or deal with a credit card purchase being denied by mistake:

• Inform your credit card company if you will be using your card out of town (especially internationally).
• Update your billing address if you move, so that the company recognizes the new pattern of purchases as a new normal.
• Make sure the company has your cell phone number so that it can contact you faster to verify or authorize a purchase.
• Contact your credit company immediately if your purchase is denied.

For more information go to http://www.usa.gov/topics/consumer/consumer-action-handbook.pdf

Teaching Suggestions

• Ask students if their credit card was ever denied in error.
• If the transaction was denied, how did they resolve the problem.

Discussion Questions

1. What are a few reasons that your credit card purchase might be denied?
2. What can you do to avoid such an embarrassment at the check-out counter?