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- There are several reasons why a debit card may be declined even if you have money in your account.
- Commons reasons may include changing cities or not having your card activated.
- Stay on top of your cards and consider using budgeting apps to help avoid being unable to use them.
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It's a frustrating experience when your debit card is denied from making a purchase even when you know there's money in your bank account happily waiting to be spent.
On the bright side, the reason for a denied debit card purchase may have a simple solution. Here are the most common reasons your debit card may be declined and tips on fixing your debit card dilemmas.
1. A different bank account has funds
You might have money in your savings account, but the checking account or money market account you're withdrawing funds from has a negative balance. You can check your debit card balance over the phone, at the ATM, online, or in person at your bank.
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Some financial institutions may deny you from overdrawing from your account, preventing you from making a debit card purchase.
Brian Walsh, a CFP® professional and senior manager of financial planning at SoFi, says in his experience working with people, an overdrawn account has been the most common reason for being denied a debit card purchase.
How to fix your debit card issue
Transfer money to the correct bank account so enough money is in your account to keep you from overdrawing.
Keep in mind you might have to pay an overdraft fee or overdraft transfer fee depending on where you bank. If your account balance has been overdrawn for less than 24 hours, you might be able to get an overdraft refund even if you don't have overdraft protection.
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2. You've reached your daily purchase limit
If you've made some big-ticket purchases in the last 24 hours, your debit card might be denied because you've reached your daily purchase limit.
Debit cards have daily purchase limits set by financial institutions to ensure your money is safe. The daily purchase limit for your debit card depends on where you bank.
Most financial institutions will generally allow you to spend between $400 to $25,000 daily on a debit card. Some banks also offer higher withdrawal limits for specific bank accounts.
How to fix your debit card issue
You may request a temporary purchase increase on your debit card to complete your purchase. As extra security, you may be asked to verify your identity.
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3. You've traveled but didn't notify your bank
Many banks require you to set a travel notice before visiting a new city or country. If you've traveled to a new location and didn't notify your bank beforehand, a financial institution may deny purchases because they think it's an unauthorized user.
How to fix your debit card issue
Contact your bank to let them know you are traveling. Before your next trip, consider going through our banking travel checklist, so your banking doesn't affect your vacation.
4. Your new debit card isn't activated
If you've just started using a new debit card because you're old one expired, it may not be activated yet. You won't be approved for any debit transactions that require a PIN.
How to fix your debit card issue
You may activate your debit card by phone, online, at an ATM, or through your bank's mobile app. When you activate it, you'll be able to set your PIN to something you can easily recall.
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Tips for managing your debit cards
Walsh recommends keeping track of how often you use your debit cards and when they expire.
"You don't want to get in a position where you're traveling, and you only have a card that's either expired or not activated. It can really make your life inconvenient," explains Walsh.
You can also use technology to your advantage by analyzing how much you owe, own, and spend, notes Walsh.
"A lot of times, technology gets a bad rep because it makes it easier for you to spend money and make impulse purchases," says Walsh. "You can stay on top of your spending and see your balances and where your spending is in real-time without having to bust out a calculator or spreadsheet."
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Budgeting apps allowyou to link your bank accounts, credit cards, and other financial tools and organize expenses into categories. You may also be able to set personal goals or limit spending through specific features on a budgeting app.
Banking Reporter
Sophia Acevedo is a banking reporter at Business Insider. Sophia joined Insider in July 2021. She writes bank reviews, banking guides, and banking and savings articles for Personal Finance Insider. She is also a Certified Educator in Personal Finance (CEPF).Sophia is an alumna of California State University Fullerton where she studied journalism and minored in political science. She is based in Southern California.You can reach out to her on Twitter at @sophieacvdo or email sacevedo@insider.com.Read more about how Personal Finance Insider chooses, rates, and covers financial products and services >>Below are links to some of her most popular stories:
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- Four reasons why your debit card might be denied even when you have money
I'm an enthusiast with extensive knowledge in personal finance, banking, and financial planning. Having closely followed developments in the banking sector, I can confidently say that understanding the intricacies of debit card transactions is crucial for a smooth financial experience. Now, let's delve into the concepts mentioned in the article about reasons for debit card denials:
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Overdrawn Account:
- Expertise: Overdrawing an account is a common reason for debit card denials. Brian Walsh, a CFP® professional and senior manager of financial planning at SoFi, emphasizes this point based on his experience working with people.
- Solution: To resolve this issue, the article suggests transferring money to the correct bank account to avoid overdrawing. Additionally, users may need to be aware of potential overdraft fees.
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Daily Purchase Limit:
- Expertise: The article mentions that financial institutions set daily purchase limits on debit cards to ensure security. The daily limit varies between $400 to $25,000, depending on the bank.
- Solution: Users can request a temporary purchase increase, with additional security measures such as identity verification.
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Travel Notifications:
- Expertise: Banks may deny transactions if users travel without notifying them. This is a security measure to prevent unauthorized usage.
- Solution: The article advises users to contact their bank before traveling and suggests using a banking travel checklist to avoid disruptions during vacations.
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Debit Card Activation:
- Expertise: Newly issued debit cards may not be activated, leading to transaction denials, as highlighted in the article.
- Solution: Users are advised to activate their new debit cards through various channels such as phone, online, ATM, or the bank's mobile app. Activation allows users to set a PIN for transactions.
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Expert Contributor - Sophia Acevedo:
- Expertise: Sophia Acevedo, a banking reporter at Business Insider, adds valuable insights. As a Certified Educator in Personal Finance (CEPF) with a journalism background, she contributes to bank reviews, guides, and articles.
- Insights: Acevedo emphasizes the importance of tracking debit card usage, staying informed about card expiration dates, and utilizing technology, such as budgeting apps, to manage finances effectively.
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Budgeting Apps:
- Expertise: Brian Walsh recommends leveraging technology, including budgeting apps, to monitor spending and balances in real-time.
- Insights: Budgeting apps enable users to link accounts, organize expenses, set financial goals, and limit spending, providing a comprehensive approach to financial management.
In conclusion, the article covers crucial aspects of debit card issues, drawing on the expertise of financial professionals and providing practical solutions for users to address common problems.
