What happens if you don’t activate a credit card? When you activate your card, you inform your card issuer that you have received it. A credit card that has never been used impacts your credit score, even if you do not make any purchases for products or activate it. Moreover, your credit report may suffer if you throw it away or activate it at a later time as well. Let’s go over everything surrounding this topic with Hanfincal.
1. How long can you have to activate a credit card?
You have to activate a credit card for 45 to 60 days when you receive your credit card in the mail. However, many issuers do not have a time limit for starting their cards.
The OTP sent to your phone number will only be valid for the period specified in the message. If you do not activate the credit card within this specific time, it will be deactivated and useless. However, some card issuers, such as American Express, will let you use your card without activating it. So, if you’ve had a credit card for a while and haven’t been able to activate it, call customer service to get a new OTP and use it to set your first-time PIN.
2. What happens if you don’t activate a credit card?
If you don’t activate your credit card and don’t use it, you still owe annual fees. Finally, if the account is inactive for an extended period, it may be closed.
2.1. You may start accruing interest and late fees
Even if you do not use a credit card, you should always pay attention to the interest and fees. If you transfer a balance to a new card but do not activate it, interest and late fees can begin to accumulate if you forget about the balance. This can lead to interest and late fees payment in this case. It has a significant impact on your credit score as well.
2.2. You still owe any annual fees
Paying an annual fee without receiving cardholder benefits is one of the most noticeable consequences of not activating a credit card.
After your application is approved, your account is opened, so even if you do not activate and use the credit card you receive in the mail, you still have an open account and must pay the annual fee. This fee is frequently applied to your first bill and is charged every year on the anniversary of your account opening. If you forget about it, the fee will be considered a missed payment, which will harm your credit score.
2.3. Your credit score can take a hit
When you apply for a credit card, an inquiry appears on your credit report. This can reduce your credit score by about five points, but it will quickly recover. Whether or not you activate your card does not affect your credit. However, even if you do not activate your card, there are a few things to consider. Your credit scores may suffer if your credit card issuer reports late payments to the credit bureaus.
You should also consider how a new credit card will affect your credit utilization rate if you apply for a new one. A new card comes with a new credit limit, and even if you never use it, the increased credit limit can help lower your credit utilization rate.
3. How to cancel an unactivated credit card?
To cancel an unactivated credit card, you can:
- Learn about the cancellation process.
- Make sure that you do not have a balance on your credit card.
- Call customer service and inform them that you want to close your account.
- Confirm with the customer service representative that there are no cancellation fees.
- Prepare a written request to cancel an account.
- After your account is closed, destroy your credit card carefully by yourself or send it back to the issuer in person or by mail.
What happens if you don’t activate a credit card? As the information above, it has the potential to cause serious problems. Getting approved for a credit card is an excellent first step toward improving your credit score, but if you change your mind, it’s best to cancel it before anything wrong happens. Hanfincal hopes you think carefully before deciding whether or not it will harm your credit. Follow our website for improving credit scores, top savings money tips, investing, and more for your financial health.
==> Read More:
- What Happens If You Don’t Use Your Credit Card?
- What Happens If You Miss A Credit Card Payment?
- Credit Card Expiration Date: What’s It?
- How To Cancel A Credit Card In A Smart And Safe Way
- How To Apply For A Credit Card And Get Approved Easily?
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