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

Signing up for a credit card that earns cash back or travel points is always exciting. You may even get a jolt out of signing up for a balance transfer credit card so you can consolidate and pay down debt.

But, there are scenarios where you may end up not activating your card when it arrives. Maybe you put the card in a drawer and forget about it, or perhaps you decided you no longer want the card after you’re approved.

In either case, it helps to know what happens when you don’t activate a credit card for any reason. That said, the outcome really depends on whether the card has a balance and whether fees apply or not. Let’s take a look at some common outcomes that come into play when you fail to activate a credit card once you’re already approved.

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

We all get busy and it’s easy to let that pile of mail on the kitchen counter grow. If your new credit card is sitting in that pile, you’re likely wondering, “What happens if I don’t activate a credit card?”

What happens when you don’t activate your card depends on a number of factors, but any of the following could happen.

You still owe any annual fees

One of the most immediate impacts you may feel when you don’t activate a credit card is paying an annual fee without enjoying the cardholder benefits.

Your account is opened when your application is approved, so even if you don’t activate the credit card you receive in the mail, you still have an open account and you’ll still need to pay the annual fee associated with it.

This applies to secured credit cards that come with fees as well. If you forget to pay the annual fee, it can count as a missed payment which can hurt your credit score.

You may start accruing interest and late fees

Interest and late fees can also begin accruing if your credit card has a balance or an annual fee applies and you never make a payment.

You may even be charged a much higher penalty interest rate if you have a balance or fees and you fail to make payments. This means the amount you owe will grow even faster than it would if you were charged your card’s regular variable APR.

Your credit score can take a hit

Your credit score can also be negatively impacted if the credit card issuer reports your late payments and a high credit utilization ratio (if you transferred a balance you’re not paying down) to the credit bureaus.

As soon as you open a new credit card account, a report with your credit limit and other pertinent info is sent to the three credit reporting bureaus, so managing your card is something you need to jump on right away.

Impact on credit utilization

The only potential upside of not activating a credit card could happen if you don’t owe a balance or fees and you don’t use the card for new purchases, either. In that case, the card’s available credit limit will help lower your average credit utilization ratio, and this could help your credit score over time.

Of course, this only applies if you are disciplined enough to not rack up additional debt on your new credit card if you do decide to activate it one day.

The card issuer may close the account

At some point, credit card issuers will close a credit card account that is never activated. Card issuers have also been known to close accounts that were activated and used but have remained inactive for a fairly long stretch of time.

Equifax says the length of inactivity it takes for a card issuer to close an account varies widely, and that you may or may not be notified before the account is closed. If your account is closed for not being activated, this means you will lose the available credit limit on the card and any potential benefit it has provided to your credit score.

How long do you have to activate a credit card?

When considering how long you have to activate a credit card, it’s important to check in with your credit card issuer to nail down the exact time frame. In many cases, you have 45 to 60 days to activate a new credit card.

Some lenders will reach out if you don’t activate your card during the activation period to confirm you received it but that’s not a guarantee. The clock starts ticking the day you’re approved, since that’s the day your account opens.

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 so you can activate the new one instead.

If you have a credit card that will expire soon, keep an eye on your mailbox. Credit card issuers send replacement credit cards as much as six months in advance of your expiration date. You don’t need to wait to activate this new card—you do it as soon as you get it. Make sure you destroy your old card as soon as you activate the new one.

Ideally, you’ll always activate your credit card right away to avoid running into any activation issues. All you have to do is follow the instructions you receive in your acceptance letter for online activation or call the phone number on your card.

If you choose to do it by phone, it can be helpful to make that call from the same phone number listed on your application so the credit card company can more easily confirm your identity. If you’re an existing customer, you may be able to activate a new card through your issuer’s mobile app.

How to cancel a credit card that was never activated

The process required to cancel a credit card that was never activated varies by each credit card issuer. Generally speaking, however, the issuer will reach out to you if you wait too long to activate.

To cancel a credit card proactively, you can call your credit card’s customer service line and inform them that you want to close your account.

First, confirm with the customer service rep that there aren’t any fees owed on the card. You’ll also want to check that you don’t have a balance on the card (more likely the case with a balance transfer card) before you close it.

For extra confirmation, you can send a letter to the credit card company via recorded mail stating the date the account was closed, as well as your name, the last four digits of your account and any other important details.

Also keep a record of this interaction and ask for confirmation of the closure. The card issuer should send you a follow-up letter about the account closing. You could also check your credit report to see that the account has been closed.

Once your account is closed, properly dispose of the credit card. You can do this yourself or return it to the issuer in person or by mail.

The bottom line

There aren’t really any benefits associated with not activating a credit card outside of the fact it may reduce temptation to use it for purchases. Then again, there’s no reason to sign up for a new credit card if you’re too afraid to use it.

Ignoring a new credit card can also lead to paying fees without reaping any of your cardholder benefits. In addition, you can damage your credit score if you forget to make payments on interest and fees and you may have to go through the hassle of requesting a new card if you wait too long to activate the first one. If you want to cancel your credit card, it’s best to call the credit card issuer right away.