Yes, Obama's credit card was declined -- but yours needn't be

By Peter Andrew

President Obama and I are like two peas in a pod. We both have quite a lot of grey hair. Er ... we both live in houses with street addresses that begin with a "1." And, um, we've both in the past had our credit cards wrongly declined. You see? POTUS and I are like brothers from different mothers.

Presidential plastic

Unexpectedly, given his multi-million dollar personal fortune, Mr. Obama's plastic was refused more recently than mine. He was in New York in September, attending the United Nations General Assembly, when he took the First Lady out to dinner. When the check arrived, his card issuer declined the payment.

Presumably after a short conference around the restaurant's payment terminal ("You tell him." "No, YOU tell him." "No way."), some poor sap was sent to inform the President of the United States that he was using dodgy plastic. His response echoed the words of every deadbeat with a 303 credit score (and me) who's ever been in that position: "No -- I really think that I've been paying my bills," he said, according to a New York Times report.

Luckily, Michelle had a functioning card, or the Secret Service detail could have faced a tricky extraction of their protectees past cleaver-wielding cooks, and members of the wait staff reprising their college football tackles.

Do you have another card?

Chances are, Mr. Obama had indeed been paying his bills, and had fallen foul of his credit card company's anti-fraud systems. Presidents don't often carry wallets, and a rare purchase of an expensive meal in a fancy restaurant could easily trigger an automatic rejection of a transaction by a computer that's looking for oddities in spending patterns.

Actually, it's surprising how many causes there are for the declining of plastic payments. The two obvious ones (and the two that everyone who witnesses your embarrassment will unfortunately and gleefully assume) is that you've fallen behind with your payments or have maxed out your card. But there are plenty of others, including:

1. The President's problem. Your card issuer's computer systems get to know you over a period, and can predict the sorts of goods and services you're likely to buy. If you suddenly begin to confound their expectations by purchasing stuff that doesn't fit your previous spending patterns, they can assume your card's been stolen, and automatically put a stop on it.
2. You've used your card for an overseas purchase. This is most likely to happen when you're on a rare trip to a foreign country, but isn't unknown when you buy something online from an overseas merchant. These too are down to those pesky (but very necessary) anti-fraud systems, and can result in your account being suspended pending an investigation. Give your card issuer a call before you travel, and check that it's not worried about that foreign online purchase you've just made.
3. Your card's expired. Oops.
4. There's a "hold." When you rent a car, or reserve or check into an hotel, the merchant often places a hold on some of your available credit. That should ultimately be released soon after you check out or return the car, but in the meantime, you may be closer to your credit limit than you think.
5. You're a recently unauthorized user. If you're an authorized user of a card, and the principal cardholder is your spouse, employer, parent or anyone else, you need to keep on that person's good side. Become persona non grata and you could be left high and dry.

Christmas cards

For many of us, the run up to the holiday season is our highest-spending period of the year, and our credit cards take on a new importance. Here are some hints for trouble-free shopping:

1. Call your card issuer just before you make extravagant purchases that don't fit your normal spending patterns.
2. Monitor your accounts online regularly. It could help you budget better, keep you within your credit limit and alert you to fraudulent activity on your account.
3. Consider whether you need new plastic. Your credit score's likely to take a hit if you roll forward a balance greater than 30 percent of your credit limit, so a new card could spread the load. You might also earn valuable rewards on travel -- perhaps with an airline or gas rebate credit card -- or gift and grocery shopping.
4. Be nice to your principal cardholder (I know it's not always easy), and check your plastic's expiration dates.

Happy holiday shopping!