Sometimes debit cards are mysteriously declined mysteriously. But there are a number of good reasons this may happen.
Some debit cards are now associated with savings accounts, which aren’t like traditional transaction accounts. Most savings accounts don’t carry an overdraft facility, so if the account’s balance is low, a debit card transaction which would empty the account will be refused.
Another reason for a debit card to be declined is that it may have a daily limit for withdrawals. These daily limits are set up as firebreaks against fraud, as debit card thieves tend to use a stolen card quickly and empty the account. Some daily limits do not count cash withdrawals (although there may be a separate limit for cash withdrawals).
To get around a daily limit, the debit card holder may telephone the card provider and inform them that a large purchase will be made that day. The card provider will then temporarily raise or suspend the daily limit, although this is not guaranteed. In that case, paying by cheque may be the only option.
Overdraft limits and credit limits are another reason why debit cards are declined. These limits apply to some transaction accounts or home loan current accounts. If a transaction will take an overdraft over the preset limit, the card is likely to be refused. With some accounts the transaction may be accepted but the account will be charged a penalty fee, which can add considerably to the cost of an overdraft.
Another reason why debit cards are refused, even when the account is within its overall and daily limits, is when fraud is suspected. Perhaps there have been some unusual (for the account holder) transactions which have triggered an alert. In these cases, phoning the debit card provider and confirming the transactions may free up the card again.
