If i get approved for a credit card and don t activate it what happens

did you make an impulsive decision to get a best credit card and are now regretting it? maybe the financial freedom of shopping at your favourite merchandise store lured you into the mix. or maybe you were unable to gauge the emotional implications of carrying it around.
whatever the case, here is how the activation process usually boils down to:

• you receive a new credit card via mail.
• the documents instruct you to call a toll-free number or visit a website.
• post successful identification, you confirm that you have received the card.
• the card is subsequently activated and ready to be used.

but, what if the tangibility of actually getting your hands on the credit card gives you cold feet? can you simply ditch the card and choose not to activate it? we hate to bring down your hopes, but it does not work that way.
why? to begin with, choosing not to activate the credit has no effect on the underlying account. chances are that the account is still very much open and operational. this is because, when you apply for a credit card and your application gets approved, you may also be involuntarily agreeing to the opening of a credit card account. what does this translate to? charges you owe to the bank in the form of annual fees. so, if you forget about this altogether and decide to ignore the card, the non-payment of the fees may deteriorate your credit score.
but, there is also a silver lining to this. in the case you have opted for a credit card with zero annual charges, choosing to not activate the card may not affect your credit score at all. for the best results, it is always advisable to consult your bank before taking any decision.

affect of credit card applications

that being said, if you are unsure about getting a credit card, you should never apply for it in the first place. a credit card application gives complete freedom to the bank to pull a hard inquiry on your credit score. this can potentially reduce your credit score by 5 to 10 points. note that this is the affect of every single hard inquiry. thus, multiple credit card applications can significantly tarnish your credit score.

canceling a credit card before activation

if you have an unactivated and unused credit card at your disposal, the next best course of action is to cancel the card altogether. you need to move quickly and immediately contact your bank to understand the cancellation process. and before going down this road, ensure that you understand the implications of this premature closure.
here is how a credit card account closure affects you:

• decreases your available overall credit limit.
• increases your credit utilization ratio.

both of these act as negative indicators for credit reporting agencies, enabling them to reduce your credit scores.

alternative strategy

if your bank does not charge you any annual fees for the credit card, an alternative strategy to deal with an unwanted credit card is to actually activate the card and lock it away. in this way:

• you will have a higher unutilized credit limit.
• a significantly lower credit utilization ratio.
• higher average credit account age over time.

all of these variables can work in tandem to build a positive credit report for you over time. and if used responsibly, the new card can also be an appropriate source of cash flow management.
do you have an unactivated credit card? share your experiences with us in the comments section!
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If you have a change of heart about a recent credit card application, you might consider simply not activating your credit card once it arrives in the mail. Though there’s a certain level of safety in not activating the card, that doesn’t mean you won’t have a credit card account, which can leave you vulnerable in certain circumstances.

If you don’t activate your credit card, you nor anyone else who possess the card can use that credit card to make purchases. However, a credit card is simply a way to access your credit account. In most cases, when you are approved for a credit card, your credit account is opened well before you receive your credit card — usually once you’re approved.

This means that your account remains open until you decide to close it, even if you don’t activate your credit card.

Will not activating my credit card hurt my credit score?

Failing to activate your credit card will have no direct impact on your credit score. The hard pull your issuer performed on your credit history prior to approving your application is the main factor affecting your credit score, but you’ll receive that hard pull whether you choose to use the card or not.

Generally, the amount of time you have to activate a credit card depends on the issuer. What’s more, the definition of “activate” can also vary between issuers.

Some issuers, such as American Express, will allow you to use your card without activation. Should you fail to “activate” within a certain period of time however, they will deactivate the card so it’s useless.

Other credit cards — such as those issued by Discover and TD Bank, have no activation time limit — though they can’t be used beforehand.

Unfortunately, you can’t cancel your credit card application and canceling your credit card account won’t erase the hard credit pull performed on your account. But you can close your account without incurring further credit score hits without any problem.

However, one perk of keeping the account open is the increased credit limit it offers. Even if you never use the account, its very presence can help improve your credit utilization and increase your average account age, giving your credit score a boost.

If you’ve decided the card you’ve applied for isn’t for you, compare other credit cards that might offer the rates and perks that better suit your needs. Just remember not to apply too soon if you want to avoid dinging your credit score too quickly.

There’s nothing wrong with not activating a credit card once you’ve received it. Just remember that not activating a card doesn’t mean your credit account doesn’t exist — or that, in some cases, your credit card can’t be used — which can cause some security concerns.

If you choose not to activate your card because it wasn’t a good fit for you, compare other credit cards to find one that better suits your financial needs.

Steven Dashiell is Senior Writer, Personal Finance at Finder specializing in all things credit cards. With more than 300 articles under his belt, he aims to help readers embrace credit cards and maximize their rewards. Steve is studying to become a Certified Educator in Personal Finance, and is a frequent face on Finder’s YouTube channel, offering the latest in credit card hacks and advice. His expertise has been featured on numerous outlets, including U.S. News & World Report, NASDAQ, Time, CBS, Fox Business, Lifehacker, Martha Stewart Living and more.

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