What happens if you don't activate the credit card?

By : Raam Dhakad

KYD - Personal Finance

Whenever you take a credit card, it has a fixed fee. Your credit card may increase your fees and interest even if you don't activate it.

After you apply for and are approved for a credit card, you will receive your card in the mail. You have to activate it.

Credit card activation helps prevent credit card fraud, as it prevents thieves from swiping cards from mailboxes and using them.

Credit card activation also tells your credit card issuer that you have successfully received your new card and are ready to use your new credit limit.

It's a good idea to activate your credit card as soon as possible, because you won't be able to earn credit card rewards or take advantage of credit-building opportunities until it's activated.

If you don't activate your credit card, you won't be able to use it to make purchases. You may end up with unforeseen complications at checkout at the grocery store.

Amazingly, a dormant credit card can still accrue interest. If your credit card has an annual fee, for example, the cost of the fee can be factored into your first credit card billing cycle.

Even if your credit card has not yet been activated, your credit issuer may charge interest on that unpaid balance. An inoperative credit card can also affect your credit score.

The credit limit associated with an inactive card will be reported to the three major credit bureaus, which means it will appear on your credit report.

Credit inquiries become part of your credit report when you apply for the card and not when you activate it.

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