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Unusual travel plans? Alert issuer

By Leslie McFadden · Bankrate.com
Friday, September 3, 2010
Posted: 2 pm ET

You might be aware that your credit card can get declined if you travel overseas, but did you know it could get declined out of state? Certain changes in behavior can set off fraud controls set up by the card issuer.

Every swipe of your credit card transmits data to the issuing bank, such as the transaction amount and whether the card was swiped through a reader or keyed in.

"Then that data is then bounced up against some qualifying factors," says Todd McHugh, president of Omega Processing Solutions, a credit and debit card processing company based out of the Greater Cincinnati area. These tolerance factors can include the type of merchant where the card was used and the frequency of purchases that occurred that day.

McHugh says that tracking the frequency of purchases can be the reason why a transaction gets declined if an unusual number of purchases are made in a short time period. "It looks to them as if the card has been stolen," he says.

Other changes in your purchasing behavior can set off alarm bells. He gave the example of a card just used for gasoline purchases. "But then all of a sudden, they see a purchase come in from overseas for a product or service online. That's a big fraud trigger there."

Some additional fraud triggers, if unusual for your spending behavior, could include:

  • Out of state travel.
  • Overseas travel.
  • Mail orders for foreign products or services.

It all depends on your usage patterns and customer profile. Folks that have a low credit score may have tighter fraud controls on their accounts, he says, while those with better credit scores and higher net worth may have more relaxed controls.

What to do
Alert your card issuer if you know you're going to do something unusual for your account, such as make purchases out of state on an infrequently-used card. "You let them know, 'Hey, I'm going to be going out of town, I know I don't typically use this card, but I'm going to do that,'" says McHugh.

He says card issuers will typically work with customers who ask for those fraud triggers to be lifted in advance.

Ideally, advance calls will prevent any fraud-triggered declines during vacation. To play it safe, take a back-up card in case one gets rejected. You can later call customer service to get the account unblocked.

Have you ever had a card declined for an unusual transaction? Share your experience in the comments section below.

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2 Comments
Erica
September 09, 2010 at 4:18 pm

I work for a bank, and usually find it amusing when customers really get upset about their cards being shut down. Most of the time it is a card that is rarely used and suddenly it is being used a lot in a different state or even different country.

To protect our customer, as well as ourselves, from fraud we freeze the card and attempt to contact the customer on the phone number we have on file.

Often customers have not updated their phone numbers with us, or have not read the deposit agreement that is sent with every account opened. The deposit agreement usually very clearly states the rules, and what the bank would constitute as unusual activity.

Francis
September 06, 2010 at 10:56 pm

Why don't these clowns tell us what the rules are? You go to Canada, you go to another state, and when you most need your card, Poof! They deny it.

When you call to complain, the customer service drones yell at you that you didn't call them. Where is it written that you have to call? Do they make it easy? No, you go through the usual six security questions from a rep who does not seem more than barely literate.

They advertize peace of mind, worldwide coverage, etc. But arbitrarily, they cut it off. Security is important, but it is mainly used as a convenient excuse for arbitrary cutoffs because they are not smart enough to figure out your spending patterns.