Shreyansh Singh, an IIT Kanpur alumnus, has eight years of experience in the finance industry. He has spent 5 years at American Express developing mid to long-term strategies for multiple markets including US, Europe and India. Shreyansh currently leads Growth and Strategy initiatives at Pice.
23 Oct 25
7 mins
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What Are the Consequences of Not Activating Credit Card?
If you’re wondering what if I dont activate my credit card, remember that while the physical card remains unusable, the account is still created under your name and may be reported to credit bureaus.
Even without activation, most credit cards with an annual fee will still charge it. Not paying it can lead to penalties and affect your credit score.
You’ll miss out on cashback, discounts, and loyalty points associated with the card until you activate it.
Since the card account opens after approval, a hard inquiry occurs, and inactivity or unpaid fees can negatively affect your credit score.
If you don’t plan to use the card, it’s best to contact customer service and cancel it officially to avoid hidden charges or misuse.
Many of us must have wondered what if I dont activate my credit card?
When you get a new card, activation is necessary before you use it for purchases. However, if you choose to keep it deactivated, the card remains closed. This means you cannot spend any more with the card. Additionally, keep in mind that annual fees, starting from around ₹500 plus taxes, may still apply.
Continue reading this blog to find out about the cancellation of a credit card, the consequences of an inactive card and more.
What Are the Immediate Consequences of Not Activating Your Credit Card?
Let’s find out the immediate consequences that might occur for not activating your credit card:
1. Discontinued Use of Card
Discontinuation of the use of a credit card is one of the most obvious and immediate consequences of the inactivation of your credit card. Once discontinued, you will no longer be able to use the card for purchases. The card will stay inactive until completion of the activation process.
2. Annual Fees
If there is an annual fee associated with your credit card, the fee will be charged even if the card is inactivated. Failing to complete the fee payment might result in penalties and a significant impact on your credit report.
3. No Benefits and Rewards
There are many credit cards with rewards programs, such as travel points or cash back. If you fail to activate your card on time, you will miss out on travel rewards redemption and earning points.
What to Know About Not Activating a Credit Card?
Not activating a credit card means you are unable to use the card for purchases. However, the account will still exist in your name. Banks often report your account to credit bureaus upon approval of the card but not activated. This indicates that your credit limit might have already affected your credit score.
Moreover, failure of credit card activation on time prevents you from experiencing the benefits of reward points, cashback and attractive discounts. Some cards even charge an annual fee even if not used before. If you misplace the card, you might need to pay penalties, leading to a poor credit history.
Your card issuer might contact you if you are found not to activate your card after a specified period. Depending on the issuer, this usually takes place within 45 to 60 days. Waiting for more time causes you to request a new card. If the waiting time is even longer, card issuers choose to close the account that is not used within that specific period.
How to Cancel a Credit Card That Was Never Activated?
The cancellation process of a credit card, left inactive, varies from one issuer to another. Follow the steps below to cancel a credit card proactively:
Step 1: Dial the customer care service number of your credit card and call.
Step 2: Inform the customer service representative that you are willing to deactivate the account.
Step 3: Confirm with the representative about the fees associated with the card.
Step 4: Check once if there is any balance on the card (usually the case with a balance transfer card) before you proceed to close the account.
For additional confirmation, send a letter to the respective credit card company through recorded mail. Make sure to state your name, the account closure date, your account's last four digits and other relevant details.
What Is the Impact on your Credit Score for a Credit Card You Never Activated?
Failing to activate your credit card can create adverse effects on your credit score. This will thereby affect your ability to receive credit approval in future. The application process includes a hard inquiry into your credit report. This can reduce your credit score significantly, irrespective of whether your card is activated or not.
Upon approval of your application, your credit card account opens up immediately. This is applicable even if you have not activated the card. However, the annual fees will accumulate even if the card is left unused. Failure to pay the applicable fees to credit bureaus might also affect your credit score negatively.
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What Are the Fees and Charges Applicable to an Inactive Credit Card?
Inactive credit cards charge certain fees, which vary based on the issuer and the card type. Find out the common charges:
1. Annual Fees
The majority of credit cards have annual fees, which are applicable even if you keep the card unused. These fees usually range from a small amount to several hundred rupees, depending on the issuer and card type.
2. Inactivity Fees
Keeping your credit card unused for a prolonged period could lead to payment of inactivity fees. This fee is applicable particularly if your card is inactive for 6 months or more.
Conclusion
So, what if I don’t activate my credit card? In most cases, the card simply remains unused.In usual cases, the card remains unused. At the same time, some banks even charge annual fees or report accounts to credit bureaus, which affects your credit score in turn. That is why,
Approximately one-third of credit card owners have at least one inactive card and have faced several charges. If you are not in need of the card any longer, cancel it immediately. This ensures that your credit profile is maintained and prevents hidden costs.
FAQs
What happens if I don’t activate my credit card?
If you don’t activate your credit card, it simply remains unused. However, the account linked to it still exists, and fees like annual charges may still apply.
Does not activating my credit card affect my credit score?
Yes. The card issuer usually reports the account to credit bureaus after approval, not activation. This means your credit limit and inquiries might impact your score.
Will I be charged fees if I never activate my credit card?
In most cases, yes. Annual fees and sometimes inactivity charges are levied even on non-activated cards, depending on the issuer’s policy.
Can I cancel my credit card if I haven’t activated it?
Absolutely. You can contact customer support, confirm there’s no balance, and request cancellation. It’s wise to follow up with a written confirmation.
Is it better to activate or cancel an unused credit card?
If you plan to use it responsibly, activating helps build credit history. But if it’s unnecessary, cancel it early to prevent unwanted charges and reporting issues.
Shreyansh Singh, an IIT Kanpur alumnus, has eight years of experience in the finance industry. He has spent 5 years at American Express developing mid to long-term strategies for multiple markets including US, Europe and India. Shreyansh currently leads Growth and Strategy initiatives at Pice.
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