Key points about: never activating a credit card
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Activating a credit card allows a person to use it.
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You usually have 45-60 days to activate a new credit card before your credit card issuer sends you a message or cancels your account.
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Not activating may affect your credit score because your credit utilization ratio or credit mix may be impacted if your card issuer closes the account.
Consider this scenario: Youapply for a credit card, get approved, and the card arrives a few days later. But you forget to activate it or have second thoughts about activating it and put it off.
What happens if you decide to hold off on activating the card until you’re sure you want to use it? Does a never-activated credit card affect your credit score, even if you don’t technically activate it or make any purchases with it? The simple answer is yes.
Simply applying for credit can impact your credit score
First, even though you need to activate the card in order to make purchases with it, the act of activating a credit card doesn’t have an effect on yourcredit score. By going through the process of applying for a new credit card and opening the new account, you have already been approved for a certain credit limit, even if you never activate the card.
The key action that affects your credit score is applying for that card in the first place. During the process of applying for a new credit card account, your credit history has already been pulled and checked by the credit card issuer, and that “hard inquiry” may have an effect on your credit score.
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Never activating your card may have consequences
If you don’t activate your card, there are a few things to watch out for that could sneak up on you.
What if you didn’t activate your card as soon as you got it?
If you don’t activate a credit card within a certain timeframe and don’t use it, your account may be closed automatically and be reported as ‘closed by credit grantor’, which could have a negative impact on your credit. This may affect your credit by increasing your credit utilization ratio, shortening your credit history, or reducing your credit mix.
How long do you have to activate a credit card?
Your card issuer may contact you if you haven’t activated your card after a certain amount of time (typically 45 to 60 days depending on the issuer) to determine if you received it. If you wait longer than that, you may need to request a new card; and if you wait even longer than that, card issuers typically close accounts that aren’t used within a certain time period.
What happens if you never activate a credit card?
If you get a card with an annual fee, you risk missing this payment if you never activate your card, which may hurt your credit score. This fee is often charged on your first bill and repeats annually on the anniversary of your account opening. Missing it or making a late payment toward it can negatively affect your credit score.
Responsible use is beneficial
Once you have the new credit card, any impact on your credit score—as a result of applying for the new credit account—has already occurred. So, as far as your credit score is concerned, any impact to your credit score happens after applying for the card, not as a result of activating the card.
Did you know?
In some cases, opening a new credit account can give you a higher total credit limit, which can improve your credit utilization ratio—the percentage of your total available credit that you’re using—so long as you don’t rush to max out the new card.
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In many cases, it’s how you use a credit card that really matters.
Using your credit card responsiblyto make occasional small purchases and paying the bill on time and in full can help you build credit history without incurring interest charges on purchases. Closing your new credit card account might actually hurt your credit score, because it would reduce your total available credit and thus make your credit utilization ratio look higher to the credit reporting agencies.
If you’re having doubts about whether you actually want your new card, you can always cancel it. But if you’re confident that you can use the new card responsibly and pay it off on time without accumulating debt, go ahead andactivateit and proceed to use it wisely.
Instead of looking at a never-activated credit card as a possible threat to your credit score, think of the potential to use the card to help build your credit. The credit card issuer has already decided that you’re creditworthy enough to receive the new card. As long as you can use your new credit limit responsibly, your new card can be a source of convenient spending, cash flow management, and can even help you build your credit over time.
FAQs
Whether you activate your card or not has no direct affect on your credit.
What happens to a credit card if you don't activate it? ›
You won't be able to use the card
This may sound obvious, but if you don't activate your new credit card, you can't use it. And if you can't use it, you can't cash in on any introductory bonus offers tied to spending.
Does not activate credit card affect credit score? ›
You usually have 45-60 days to activate a new credit card before your credit card issuer sends you a message or cancels your account. Not activating may affect your credit score because your credit utilization ratio or credit mix may be impacted if your card issuer closes the account.
What happens if I don't activate my credit one card? ›
You should be aware that if you don't activate your card within 14 days after you receive it, Credit One will automatically close the new account. Similarly, once you're approved for a card, Credit One will report the new account to the major credit bureaus, regardless of whether you activate the card.
Does an inactive credit card affect your credit score? ›
The bottom line
Credit card inactivity will eventually result in your account being closed. A closed account can have a negative impact on your credit score, so consider keeping your cards open and active whenever possible.
Do unactivated credit cards expire? ›
If you don't use a credit card for a year or more, the issuer may decide to close the account. In fact, inactivity is one of the most common reasons for account cancellations.
Do all credit cards need to be activated? ›
New credit cards must be activated for security reasons. Activation notifies the card issuer the card has been received by the correct person and is designed to help prevent fraud.
Is it better to cancel unused credit cards or keep them? ›
Canceling a credit card will cause a direct hit to your credit score, so more often than not, you'll want to keep the account open. Correctly managing an open, rarely-used account may require some extra attention, but the added effort will help your credit in the long run.
Can I cancel a credit card before activating it? ›
Can you cancel a credit card before activating it? You can cancel a credit card before activating it, but it will be the same as canceling a card at any other time. And it might still impact your credit scores.
Should you keep credit cards at zero balance? ›
Keeping a zero balance is a sign that you're being responsible with the credit extended to you. As long as you keep utilization low and continue on-time payments with a zero balance, there's a good chance you'll see your credit score rise, as well.
ANNUAL FEE: The Annual Fee of $75 will be billed to your Account when opened. It's refundable as long as you cancel your Account and have not made any transactions.
Can I cancel a credit card I just applied for? ›
You can't decline a credit card after being accepted, but you can always cancel your new credit card if you don't want the new account. Canceling a new credit line might be the right move if you're worried about going into debt you can't pay off.
How often should I use my credit card to keep it active? ›
How often should I use my card to keep it active? While it depends on the issuer, you should use your card at least once every few months to keep it active. Even a small purchase is enough to show your card company that you're still interested in the card.
Why is my credit score going down when I pay on time? ›
Using more of your credit card balance than usual — even if you pay on time — can reduce your score until a new, lower balance is reported the following month. Closed accounts and lower credit limits can also result in lower scores even if your payment behavior has not changed.
Can a deactivated credit card be activated again? ›
How To Activate Inactive Credit Card. A cardholder can unblock its credit card offline, online, or through customer service support. To unblock the credit card online, follow the below steps: The cardholders must first log in to the bank's internet banking or mobile app.
Is there any problem if credit card is not used? ›
Even if you don't use a credit card, the card issuer may still continue to levy annual fees and charges. An inactive credit card could be deactivated by the card issuer. A credit card could be helpful for those who are looking forward to convenience of payment and often face cash crunch.
Will Discover cancel my card if I don't use it? ›
Your credit card account may be closed due to inactivity if you don't use it. You could overlook fraudulent charges if you're not regularly reviewing your account. If your credit card account is closed, it could negatively impact your credit score.
Does activating a new card deactivate the old one? ›
When you activate your new card, your existing card is automatically deactivated, so you should destroy it by cutting it up or shredding it to protect yourself against fraud.
