It’s always exciting to apply for a credit card that allows you to earn cash back or travel points, and you might feel even more excited if you apply for a balance transfer credit card that lets you consolidate and pay off your debt.
But there may be situations where you receive your card but never activate it: you might put it in a drawer and forget about it, or you might get approved but then decide you don’t need the card.
In either case, it’s helpful to know what happens if you don’t activate your credit card for any reason. That said, the outcome depends on whether you have a balance on the card and whether fees apply. Let’s look at some of the common consequences that occur if you don’t activate an approved credit card.
What happens if I don’t activate my credit card?
We’re all busy people, and it’s easy to end up with a growing pile of mail piling up on your kitchen counter. If your new credit card is in that pile, you’re probably wondering, “What happens if I don’t activate my credit card?”
What happens if you don’t activate your card depends on a variety of factors, but one of the following may happen:
The annual fee is still unpaid
One of the most immediate consequences you will feel if you don’t activate your credit card is paying annual fees without enjoying the cardholder benefits.
Your account will be opened if your application is approved, so even if you do not activate the credit card you received in the mail, your account will remain open and you will be required to pay the associated annual fee.
This also applies to secured credit cards that have fees: if you miss an annual fee payment, it will count as a missed payment and can negatively impact your credit score.
Interest and late fees may apply
Interest and late fees can also start accruing if you carry a balance on your credit card or have an annual fee applied that isn’t paid.
If you have a balance or fees and miss a payment, you may also be charged a much higher penalty interest rate, meaning the amount you owe will grow even more quickly than if you were charged the card’s regular variable APR.
Your credit score may drop
Your credit score can also be negatively affected if your credit card issuer reports late payments or a high credit utilization ratio (if you transfer a balance that you haven’t paid off) to the credit bureaus.
As soon as you open a new credit card account, a report containing your credit limit and other pertinent information is sent to the three credit bureaus, so you’ll want to start managing your card right away.
Impact on credit usage
The only benefit you’ll get from not activating your credit card is if you don’t carry a balance, have any fees, and don’t use the card for new purchases, in which case the card’s available credit limit will lower your average credit utilization ratio, potentially improving your credit score in the long run.
Of course, this is only true if, someday, when you decide to activate a new credit card, you have enough self-control to avoid taking on additional debt on that credit card.
Your card issuer may close your account
At some point, credit card issuers will close credit card accounts that have never been activated. Card issuers have also been known to close accounts that have been activated and used but remain inactive for a significant period of time.
According to Equifax, the period of inactivity before card issuers close your account varies widely, and you may or may not be notified before your account is closed. If your account is closed for inactivity, you’ll lose the card’s available credit limit and any potential benefits it may have brought to your credit score.
How long does it take for my credit card to be activated?
When considering how long it will take to activate your credit card, it’s important to check with your credit card issuer to find out the exact time frame – in most cases it will take 45 to 60 days to activate a new credit card.
Some lenders may contact you to confirm if your card has arrived if you don’t activate it within the activation period, but this is not a guarantee. Your account will be opened from the day you are approved, so the countdown begins.
If you don’t activate your card during the activation period, you may need to contact your credit card issuer to request a new card and then activate the new card instead.
If you have a credit card that is about to expire, keep an eye on your mailbox. Your credit card issuer will send you a replacement credit card up to six months before the expiration date. You don’t have to wait to activate your new card; activate it as soon as you receive it. Once you activate your new card, discard your old card immediately.
Ideally, you should always activate your credit card immediately to avoid activation issues. All you have to do is follow the online activation instructions provided in your authorization letter or call the phone number provided on your card.
If you do it over the phone, calling from the number on your application makes it easier for the credit card company to verify your identity. If you’re an existing customer, you might be able to activate your new card through your issuer’s mobile app.
How to cancel a credit card that was never activated
The steps you need to take to cancel a credit card that’s never been activated will vary depending on your credit card issuer, but generally, your issuer will contact you if you take too long to activate it.
To cancel your credit card in advance, call the credit card’s customer service line and tell them you want to close your account.
First, make sure you confirm with a customer service representative that there are no outstanding fees on the card, and also make sure there is no balance on the card before you close it (this is likely the case with balance transfer cards).
As additional verification, you can send a letter by recorded mail to your credit card company with the date the account was closed, your name, the last four digits of your account number, and any other important details.
You should also keep a record of this communication and ask for confirmation of the closure. Your card issuer should send you a follow-up letter about the account closure. You can also check your credit report to see if your account has been closed.
Once your account is closed, you should dispose of your credit card properly, either by disposing of it yourself or by returning it to the issuer in person or by mail.
Conclusion
There’s no real benefit to not activating your credit card other than that you might be less tempted to use it to make purchases, but if you’re afraid of using a credit card, there’s no need to go out of your way to apply for a new one.
If you ignore a new credit card, you could end up paying fees without receiving any of the cardholder benefits. Plus, forgetting to pay interest and fees can hurt your credit score, and waiting too long to activate your first card could cost you the hassle of applying for a new one. If you want to cancel a credit card, it’s best to call your credit card issuer right away.
