7 Times an Issuer Could Freeze Your Credit Card

[Update: Some offers mentioned below have expired. For current terms and conditions, please see card agreements. Disclosure: Cards from our partners are mentioned below.]Have you ever been puzzled when your credit card was declined? Sometimes it’s a technical glitch like a worn-out magnetic stripe or a merchant’s intermittent communications system, but other times it turns out that your account has been frozen.

Why would your account be frozen? It turns out that there are a few pretty good reasons why a credit card issuer would suspend your purchasing power, sometimes for reasons within your control, and other times not.

Here are seven times your credit card account could be frozen, and what you can do about it.

1. Fraud Alerts

Credit card issuers attempt to detect fraudulent transactions through pattern recognition and behavior detection formulas. In most cases, these systems work well at preventing unauthorized purchases, and your account will be frozen when a potentially fraudulent transaction is detected. According to Ashley Dodd, communications manager for Chase Card Services, “There are many variables that can impact account activity. We look at a number of factors — such as concerns about fraud — when evaluating a customer’s credit situation and determining if any action needs to be taken.” To prevent false fraud alerts, contact your card issuer before making any unusually large purchases, and before using your card outside of the U.S.

2. Defaults

If you stop paying your credit card bills, then it’s only a matter of time until your account is frozen. How long will that take? While it depends on both the card issuer and the specific customer, it’s unlikely that your account will be frozen immediately after missing a single payment, but it’s a pretty safe bet that your card will stop working after missing two. If you ever miss a payment for any reason, contact your card issuer as soon as possible to explain the situation, and to arrange to make up the payment as quickly as you can. Once your account is in good standing, you should be able to use your card again. Keep in mind that missing payments on your credit cards not only risks a freeze, it also damages your credit. You can check your credit scores for free on Credit.com to see whether a late payment is impacting you.

Get everything you need to master your credit today.

Get started for free

3. If You Cancel the Primary Cardholder’s Account

If the primary account holder closes his or her account, all of the authorized cardholders will have their cards frozen as well. Nevertheless, most card issuers will still display the account in the user’s online profile for several months, if only so that customers can track the status of their remaining balance and payments.

4. If an Authorized User’s Account Is Canceled

If you are an authorized user on another person’s account, he or she could contact the card issuer to and cancel your cardholder privileges. So if you have a credit card with the account of a family member or an employer, you might want to check with them if it stops working one day.

5. If You Exceed Your Credit Limit

Making purchases beyond your credit limit may result in your account being frozen. Some card issuers offer products with no-preset spending limits, while others will allow cardholders to exceed their limit upon request. Otherwise, expect your card to be declined if you attempt to make a purchase that exceeds your available credit limit. But by making a payment to your card issuer, you can quickly free up your credit limit again. However, going close to your limit can damage your credit score, which depends partly on how much you charge relative to your credit limit. Experts recommend using no more than 30% of your available credit for credit scoring purposes.

6. If You Freeze Your Own Card

Discover offers a novel feature called Freeze it that allows customers to suspend their own accounts, kind of like an on/off switch you can use if you misplace your card or if it’s stolen. Freezing an account prevents its use for most new purchases, cash advances and balance transfers, while still allowing recurring bill payments, returns, credits, dispute adjustments and payments. (You can read our review of the Discover it card here.)

According to Laks Vasudevan, vice president of products and innovation with Discover, “One of the main reasons we developed the Freeze it function was to give our cardmembers better control over their account. This function is extremely beneficial for the times cardmembers either leave their card at an establishment, or maybe misplaced their card in their car or home. Having the ability to temporarily freeze an account during these instances gives cardmembers piece of mind that purchases won’t be made on their card. And if there is a declined transaction made while the account is frozen, the cardmember is immediately alerted.”

7. If the Issuer Is Performing a Financial Review

A credit card issuer may suspend your account while it performs a financial review. In particular, American Express is known to do this. To pass the review, customers must authorize American Express to verify their income by viewing their tax statements. Once customers have passed this review process, their accounts will be reactivated.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.