A Small Guide To Credit Card Usage And Transactions


Why was my transaction declined? Why had my card initiated a referral or call issuer response? Why am I asked so many questions before my charge is approved? Am I liable when my card was lost or stolen? What is CVV and why am I asked for it? Why must I sign the back of the card even though it is a photo card? How does fraud transactions occur? And more…..

This is just a general guide to help answer some of these questions, however you may be able to get more in depth answers by contacting your issuing bank direct.

Why was my transaction declined?

  • You could have reached the credit limit set on your account. If you are traveling with a low credit limit, you a may want to arrange for a temporary increase prior. Some Hotel establishments may put a large hold amount to ensure your stay in the hotel is covered.
  • The transaction could have been declined due to a failed credit card check. Egs. For online or rather internet/mail order transaction, a wrong expiry date or CVV/CVC value could have been entered and hence failed the processing requirement.
  • Your transaction my have initiated a referral or call issuer response because of fraud control parameters set by your issuer but treated as declined.
  • For cash advances etc. There might be a credit or fraud parameter set by your issuer whereby you have exceeded the daily allowed limit for withdrawals.
  • You may be delinquent with regards to your credit card payments hence your account may have been suspended or cancelled.
  • You reported your card lost but forgot to inform the bank/issuer that you had found it back.
  • There was a chip or magnetic stripe error on your card which ultimately let to your card being declined as some merchants do not or are not given manual processing forms or equipment.
  • Your issuing bank’s system could be down due to a technical problem or just end of day processing.
  • An incorrect card pin was used.

Why had my card initiated a referral or call issuer response?

This often happens as a result of security parameters set by your issuing bank which is done to safeguard the interests of both ‘you’ the card holder as well as the banks.

  • Did you inform your issuing bank that you would be traveling out of the country? If not then they want to ensure that the rightful owner of the card is actually using the card.
  • The transaction amount could be relatively large and for high risk items such as watches, jewellery, audio equipment, cameras etc.
  • There are an uncommonly high number of transactions done within the same day.
  • Numerous transactions are split within the same establishment.
  • Your card face appears to be tampered even though it may just be a little worn out.
  • The CVV or CVC which is the last 3 digits behind your card at the signature panel may have been worn and hence entered incorrectly on some terminals which require the values to be entered.
  • Your issuing bank’s system could be down due to a technical problem or just end of day processing.
  • You are using your card in a country deemed as high risk due to a substantially high volume of fraud transactions.
  • Verifications questions may be asked by your issuing bank to ensure that you, the rightful owner of the card is using it there before allowing subsequent transactions to be approved smoothly.

What is CVV or CVC and why must I provide it?

CVV stands for ‘Card Verification Value’ and is the last 3 digits found behind your card at the signature panel. This is an added security step to help in the fight against fraud or the usage of counterfeit cards. And if you don’t provide it then chances are high that your transactions will be declined. Even if merchants have the option of not entering it, they might still want to do so to avoid chargebacks later.

CVV or rather CVV2 is what it’s called at Visa, while it is called CVC for Mastercard. Amex terms theirs as CID.

Am I liable when my card was lost or stolen?

The terms and conditions may vary from issuer to issuer however generally your liability for all transactions ends after you have successfully reported it lost or stolen to your issuer. You may have limited or full liability prior to you making the report. It is advisable for you to lodge a lost/stolen incident report with the police in any case, especially if there are unrecognized transactions on your card as a result.

Why must I sign the back of the card? Or why must I sign behind the card even though it is a photo card?

All Credit cards must be signed behind at the signature panel, this is the terms and conditions of use set by the Associations. Merchants have every right to refuse acceptance of your card if you refuse to sign it behind regardless if it is photo card with your photo on it. Having a photo on your card is just an added security feature.

What happens if you somehow lose your un-signed card? Someone can easily pick it up, sign their own signature behind it and start using it without alerting the merchant’s suspicion. If the card is later recovered then you are liable for all the transactions due to your negligence.

How does fraud transactions occur?

Fraud can happen at anytime or anywhere, some with very simple techniques while others with highly sophisticated means. Here are just a few suggestions to safeguard your credit card or credit card transactions….

  • Do not leave your credit card statements lying around since it contains quite a fair bit of information which fraudsters can use easily.
  • Try not to send credit card information via email.
  • Ensure that credit card transaction done on the internet are on secure and trusted sites only.
  • Watch your card being swiped on the terminals which should normally be done in clear view to ensure no external readers are used to capture your credit card data, If you are suspicious, you can always alert your issuing bank.
  • The latest Chip cards (EMV technology ) are currently better and provide safer transactions via the POS terminals with the Chip readers.
  • If you feel that your card was somehow compromised, you can always alert your issuing bank and get your card changed.

Lastly always check the interest charges by your issuing bank, they can be quite high especially for cash advance transactions.

Wiki Credit Card

Wiki Credit Card – Fraud

4 Responses

  1. lots of good, useful information here… keep it coming, eh? 😀

  2. Thanks for the note….and I’ll do my best 😉

    cheers mate!

  3. some people really don’t know the risk, and out of control while used Credit card, so.. thanks for the post.
    cheers

  4. Yup agree….and thanks! 😉

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: