It can be embarrassing to have your credit card declined for suspicious activity while you’re traveling.
But it can happen under all sorts of circumstances, even if you’ve let your bank in on your travel plans.
Just ask Ben Cober of St. Louis. In June, he and his girlfriend took a trip to Hawaii to attend a destination wedding. He had been through the experience of having his credit card declined before, so this time he called ahead and let the bank know where he’d be and for how long. He asked them not to freeze his card if charges started coming in from the islands.
Still, when Cober tried to charge four tickets to treat his hosts to a tour of the USS Arizona memorial and USS Missouri at Pearl Harbor, his card was declined and the newlyweds had to shell out more than $200 for the tickets instead.
There’s not much a traveler can do to ensure a card won’t be declined. It happens to cards from all issuers, for purchases of all sizes, and to those traveling domestically and internationally. The reason for the declined transactions? Card issuers have sophisticated fraud detection systems in place that can shut a card down after suspicious purchases. If you’ve broken out of your typical spending patterns, you may get flagged. There’s good news in that if your bank is right, it has just thwarted a thief from going on a spending spree in your name.
You can let issuers know in advance that you’re traveling, but this won’t guarantee your account won’t be frozen. There’s good reason for this, banks say. Fraud can happen even in the place you’re traveling. If someone accesses your card information in a cafe or hotel, for instance, that person could start charging in the city you’re visiting. Or maybe you ordered merchandise before you left and the charge went through while you were overseas. It may appear as though you’re in two places at once.
For those reasons and others, Amelia Woltering, a spokeswoman for American Express, says you can save yourself the call when you’re planning your vacation.
“We don’t encourage card members to call us when they’re traveling. We don’t feel that it’s necessary, so that’s something that might set us apart from other card companies,” she says.
But card members may want to make sure they have signed up on the American Express site for fraud alerts. That way, a representative can text or call to check out suspicious activity quickly and get the issue resolved.
Other companies do recommend that you call and let them know your travel plans. Steve O’Halloran, a spokesman for Chase says, “We strongly encourage our customers to contact us immediately if they’re concerned about fraud or using their card while traveling, whether they’re in the middle of a trip or about to leave.”
A spokeswoman for Wells Fargo agrees — you should let the company know you’re traveling, but that won’t necessarily prevent a block.
Your best bet is to make sure the bank has an up-to-date mobile phone number for you when you’re traveling. Also, bringing a backup card will give you another option if one card isn’t accepted. A prepaid card may avert an emergency as well, but you may not have the same purchasel protections you would have with a credit card.
If your card is declined, and you have been inconvenienced in terms of time or money, you can try asking for compensation. Some issuers may give you a small credit or rewards points for your trouble. It’s a competitive industry, and they won’t want to lose you.
Breaking from pattern can cause freeze
Card issuers won’t reveal specific triggers for suspicious activity — they don’t want thieves to have any more information than they already do. They say alerts are based on individual spending trends, so they’re different for everyone.
In addition to protecting you, the bank is protecting its own interests as well. If a card is used by a thief, the cardholder is legally liable only for a maximum of $50.. But fraud has much bigger implications for banks’ bottom lines. As thieves get smarter and technology gets more sophisticated, fraud losses mount. In 2010, total global fraud losses from credit and debit cards hit $7.6 billion, up 10 percent from the previous year, according to the latest Nilson Report. Of that total, nearly half (47 percent), was in the United States
So banks have a considerable challenge. They have to fight fraud aggressively without alienating customers who are none too happy when their cards won’t work away from home.
More tales of woe…and happy endings
London-born Chris Maddern, CEO of AppLaunch, a site that helps developers publicize new apps, understands the challenges banks face. But he was surprised and irritated when he returned to the city for the 2012 Olympics and a block from his bank put a damper on his dinner.
Maddern, who currently lives in New York City, had scored tickets to the women’s soccer match and planned to pick up the tab for dinner with high school friends.
First one credit card was rejected, then another and then a debit card, all three from different providers, he said. He had one card left and it worked, but not before he took some abuse from friends who were starting to wonder what kind of financial shape he was in, he says.
He said the charge for dinner wasn’t cheap — about $150 — but not out of his normal spending range.
“I understand the need [for banks] to protect themselves from the risks of fraud, as they may not be able to charge back all international fraudulent charges, but traveling to another developed country is not by itself indicative of fraud,” Maddern says.
Sometimes the problem is resolved instantly, with a single phone call to the bank. Others, like travel writer and blogger Hilary Billings, of Las Vegas, spend a considerable amount of time and money to deal with shut-down credit cards. It took her weeks (and many expensive international phone calls) to straighten things out after her credit card was declined during her June trip to Australia.
Billings, who blogged about the experience, suspects her problem stemmed from using a card internationally that was from a small local bank. For her next trip, she plans to switch to a bank with a bigger network and carry a prepaid card for backup.
While getting your card declined can complicate your travel plans, it doesn’t have to ruin your trip.
Better things were definitely ahead for Cober, who had a second, secret purpose in mind for that trip to Hawaii and a reason for wanting things to go smoothly — he planned to make his girlfriend his fiancee. His card may have been declined, but his proposal was accepted.