What happens if I don’t activate a credit card?
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Hi,
About two month ago I applied for a zero interest credit card. Yesterday the card arrived, and it turns out that it’s only zero-interest for balance transfer, not new purchases as they advertised (or perhaps what I thought they advertise).
I don’t carry balances on my other cards, so this new credit card is worthless to me. My question is: what happens if I don’t activate the credit card, and how will it affect my credit?
Do I cancel the card and close the account? Do I lose it in my sock drawer? What’s best with respect to FICO?
Thank you
For what it’s worth, I have a credit card that I never activated and it shows up on my credit report as an open, active line of credit. I have no idea how it affects my FICO, though.
Activating a credit card is meaningless to FICO
“Activating” a credit card just confirms to the card issuer that you received it. Some issuers won’t allow transactions on the account until that “activation” happens.Activated or not, a new credit card means a new, OPEN line of credit. It will show on your credit report as an open, active account, and will be accounted for by FICO.
That’s actually no so bad. If you don’t use the card the balance will be zero, which isn’t bad nor good with respect to FICO.
The new CL will be added to the CL of your other cards, which lowers your total utilization. That’s good for FICO.
I would stick it in sock drawer and forget about it.
Never toss a credit card in the drawer!
A credit card in a drawer is very risky. It may be stolen without you even noticing, and by the time the bills come in it’s too late.If you plan on never using the card but don’t want to close the account, shred the card without activating it. This removes the theft risk but leaves the account active, so if for some reason in the future you do want to use the account you can simply call up the issuer and get a replacement card sent out.
Make a one or two small purchases on it once a month and pay it off same month. Instant credit score boost!
Get rid of it
If you have no plans of ever using the card, then get rid of it (i.e. closed the account). While it’s true that in the short term closing a credit card account may lower your credit score a bit, it could potentially help other aspects of your credit profile (e.g. credit to income ratio).Unless you plan to shop for a new mortgage in the next 6 months – simply close the account.
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