What happens if you don’t activate a credit card?


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Being approved for a credit card is a great feeling. Even better is the feeling of receiving your new card in the mail. Once you’ve activated your card you’ll be able to make purchases, balance transfers, and maybe even earn rewards. But what happens if you simply don’t activate your card?

Your account was opened the moment you were approved, so choosing not to activate your credit card won’t impact your account status – it just means you won’t be able to use it. If you’ve changed your mind between getting approved and getting your card in the mail you’ll need to contact your issuer to discuss your account.

Is the account open if you don’t activate the card?

Activating your card is not the same as opening your credit card account. Not activating your card will mean that you won’t be able to use it, but your account is still active. Activating your card is simply a security step put in place by your card issuer. It helps to protect your account in case your card is lost or taken on its way to you. And for some issuers, like Chase, activating your card is simply a formality and your account is usable before you even receive your card.

Do you still have to pay the annual fee?

The annual fee on your credit card is charged to cover your access to your issuer’s credit services. That means that your annual fee is charged whether you choose to use your credit card or not. So, even if you don’t use your card to make purchases or keep an unactivated card locked in a drawer, you’ll still be charged an annual fee for access to your account.

If you’ve applied for a card that you have no intention of using, you may be able to get your issuer to waive the fee. You are more likely to get the fee waived if you haven’t used the card at all and plan on closing the account. That said, your issuer has no obligation to waive the fee. Since the fee was a part of the initial contract, you are obliged to pay it.

Can it still impact your credit?

Not activating your credit card could impact your credit score if you lapse on your payments. Remember, your account is open, even if you don’t activate your card. That means that you are responsible for paying any associated fees for the account, and payment history is the largest factor used in calculating your credit score. If fees go unpaid, your credit score will be negatively affected.

However, if the card doesn’t have any fees, you may see a positive effect on your credit. The reason comes down to credit utilization. Credit utilization refers to the amount of credit you have compared to the amount of credit you use. Adding a credit card to your report will add to the amount of credit you have. And if you don’t use the card, you will lower the amount of credit you use. Lower credit utilization has a positive effect on your credit score, although the ideal credit utilization range is 10 to 30 percent, rather than zero.

How long do you have to activate a credit card?

The length of time that you have to activate your card will depend on the issuer. American Express gives you 45 days to activate, after which they will deactivate the card and you’ll need to request a replacement card. Chase, on the other hand, gives you 60 days before they simply activate the card for you. Other issuers, such as Citi and Bank of America, have no time limit for activation. To be sure about how much time you have to activate, contact your issuer. And remember, activation is used as a security measure. If you’ve applied for a card and don’t receive it within two weeks, report it to your issuer. This is true even if you plan to cancel the account. A missing card puts you at risk of identity theft.

How do you cancel a credit card before activation?

If you’ve applied for a credit card but decide you no longer want the card, you will need to cancel it. The best way to start this process is to make a call to your issuer as soon as you’ve made the decision. Let the issuer know that you have not activated the card and that you wish to close the account. You may be able to do this over the phone, but some providers require that you make the request in writing.

When you close the account, be sure to confirm that the balance on the account is zero. If your account has an annual fee, this will be your chance to inquire about having it waived. Once you have confirmed that the account is closed with a zero balance, be sure to request a confirmation letter. This will serve as written evidence that the account was closed in good standing.

Keep in mind that closing your account may have an impact on your credit score. When you take that line of credit away, your available credit will decrease. This may put your credit utilization in a higher range, lowering your credit score.