Credit card declines are an unfortunate and frustrating part of doing business. They occur for many reasons, from insufficient funds to technical issues and even fraud. They come with a code that often leaves merchants confused about what to do next.
In this guide, I’ll explain what credit card decline codes are and who issues them. I’ll also provide a complete list of decline codes including what each one means and what you can do about it when it occurs.
What Is a Credit Card Declined Code?
A credit card decline code is a numerical code indicating that the processing of a credit card transaction has failed. Decline codes, usually accompanied by a short error message, can happen for various reasons, from card expiry or insufficient credit to suspected fraudulent activity. There are two main types of credit declines:
Soft declines occur when a transaction receives card issuer approval but fails due to temporary authorization issues caused somewhere else in the payment processing chain. Soft declines
Hard declines occur when a transaction is rejected by the card issuer due to issues like suspected fraudulent activity. They are final and cannot be overcome by retrying the transaction.
Who Issues Credit Card Declined Codes?
Credit card decline codes can originate from any party involved in the transaction process. This includes your payment processor or gateway or your customer’s card issuing bank. The card issuing bank will likely be responsible for most of the declines you experience, as they have many different risks and assessments to make around the validity of each transaction.
The Most Common Reasons Credit Cards Are Declined
Insufficient funds: A cardholder tries to use their credit card but has reached their credit limit.
Transactional error: A cardholder incorrectly types credit card details such as the card number, CVV2 code, or PIN.
Expired card: A cardholder uses a credit card that has passed its validity date.
Address change: A cardholder’s address doesn’t match the billing address registered with the card issuer.
Lost or stolen card: The transaction occurs with a card that has been reported lost or stolen.
Unusual location: The transaction occurs from an area outside the normal geographic boundaries where a cardholder usually makes transactions. For example, a cardholder makes a transaction from a foreign country while traveling and doesn’t inform the issuing bank.
Fraud: A transaction or series of transactions doesn’t meet a cardholder’s usual usage behavior. For example, any sudden change in purchasing habits, suspiciously timed purchases or larger than normal purchases can result in a decline.
Credit Card Declined Codes: A Complete List
Now that we’ve run through what a credit decline is and the most common reasons they occur, it’s time to understand the various codes you may encounter.
Here’s a list of decline codes with easy-to-understand explanations and instructions on what actions to take if they happen. Keep these handy so you’ve always got a reference the next time you get a decline!
Error Codes for Credit Card Fraud
Fraud is a serious and growing issue that can impact your business. The following are some of the most common fraud-related codes you should look out for.
07 Hold card, special conditions: If you see this code, the card issuer declined the transaction because it suspects a card or account is fraudulent. You should not attempt to retry the transaction. Hold the card and contact the card issuer. If you cannot hold the card because the transaction was online, advise the customer to contact the card issuer.
41 Lost card: In this case, the card issuer has declined the transaction because the cardholder has reported it lost. You should not attempt to retry the transaction. Hold the card and contact the card issuer. If you cannot hold the card because the transaction was online, request the customer to get in touch with the card issuer.
43 Stolen card: Another common fraud-related code occurs when the card issuer has declined a transaction because the cardholder reported it stolen. In this instance, you should take the same actions as you would after receiving decline codes 07 and 41. You shouldn't attempt to retry the transaction. Hold the card and contact the card issuer. If you cannot hold the card because the transaction was online, request the customer to get in touch with the card issuer.
What's the Best Way for a Business to Accept Credit Cards?
A payment service provider is undoubtedly the best way to start accepting credit cards for most merchants. This is especially the case for merchants with a limited budget or limited payment processing experience.
When you use Pay.com as your payment service provider, you don't need to invest thousands of dollars, struggle with complicated setups, or wait weeks to get up and running.
Pay.com allows you to quickly and easily accept credit card payments through your website. You can also create Pay Links to send customers via email or SMS. When a customer clicks a link, they go to a personalized checkout page where they can make a credit card payment. You can even speak to customers to get their credit card details over the phone and then enter them into your Pay Virtual Terminal to collect payment.
Pay.com offers the highest security and fraud protection levels as well. We have level 1 PCI DSS compliance and support 3D Secure 2.0 (3DS2), so you can deploy Strong Customer Authentication to better protect against fraud and follow EU PSD2 regulations.
Beyond letting your business securely accept credit cards, Pay.com also helps you overcome costly payment declines. Pay.com's account updater fetches updated information from Visa or Mastercard if one of your customers pays using an expired card.
The Bottom Line: Credit Card Declined Codes
Credit card decline codes provide valuable insights into why transactions get declined. By taking the time to understand the different codes using this guide, you can take steps to reduce future declines and cut the impact they have on your bottom line.
But understanding these codes and knowing what to do when they occur is only half the battle. Partnering with the right payment service provider is also a critical part of your efforts to manage and decrease your declines.
With Pay.com, you’ll have a partner that works behind the scenes to reduce your decline rates, so you can deliver the smoothest possible customer experience, no matter what happens. Click here to sign up now!