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A card transaction may be declined for several reasons. Karat maintains fraud and risk monitoring systems designed to protect your account, and certain transactions may be blocked if they are flagged for review. If your transaction was declined, review the following common causes.

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1. Fraud or risk monitoring

Karat uses automated fraud and risk detection systems to monitor activity. If a transaction appears unusual based on location, merchant type, transaction size, or recent account activity, it may be declined to protect your account. If a transaction is flagged for potential fraud, you may receive a notification prompting you to review the activity.

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2. Card status

Confirm that your card is active in your dashboard. Transactions will be declined if the card is frozen or canceled. You can check this under: Banking or Credit Card > Cards

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3. Insufficient funds (Banking Card)

For Banking Cards, transactions are limited to the available balance in your checking account. If the transaction would result in a negative balance, it will be declined.

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4. Limit restrictions

Transactions may be declined if they exceed:
  • Your daily card limit (for the Banking Card)
  • Merchant-specific controls
  • Your organization’s approved spending limit (for the Karat Card)
You can review card limits from the Cards dashboard.

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5. International or restricted merchants

Some international transactions, merchant categories, or high-risk industries may be restricted depending on account settings.

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Still seeing declines?

If you are unsure why your transaction was declined, contact us so we can review your account activity directly. Karat is a financial technology company, not a bank. Banking services provided by Grasshopper Bank, N.A., Member FDIC. The Karat Visa® Business Credit Card is issued by Cross River Bank, Member FDIC, and pursuant to a license from Visa️ USA.