Question

Why does a credit-card transaction to buy an item fail to count as part of the $Ml$ measure of money? (Hint: When you make a credit-card payment. the bank that issued you the credit card instantaneously extends a loan to you for the amount of the transaction.)

Short answer

A credit card decline occurs when a credit card payment cannot be processed for some reason, and the payment gateway, processor, or bank supplying the money declines the transaction.

Step-by-step solution

Credit-card Transactions.

When a credit card is used at a merchant's payment terminal or portal, it is called a credit card transaction.

This could include inserting, tapping, or swiping their credit card number in a physical location such as a grocery store, as well as entering it online and over the phone.

Results of Credit-card Transaction Failure as Measure of Money.

If you don't pay your credit card account on time, you'll be hit with a slew of additional costs, like a late fee, exorbitant interest charges, and so on. Regularly missed payments may result in the end of the interest-free term, a reduction in credit limit, and a poorer credit score.