What Happens If You Don’t Activate Your Credit Card?

Do you remember the credit card you got at the check-out counter of a store and never took it out of the kit? Your bank may also have pressured you into getting a new credit card when you opened your first account with them but you never activated it. You may think that just because you did not activate the card, it would cause no harm to your finances. But you must note that even if you did not activate the card, your credit card account is still open. If it carries any annual fee, you will have to pay the same. However, if the card is free, you can keep the account open and not use the card as the unused credit limit will improve your credit score.

Why is it important to activate your credit card?

For most card issuers, activating the credit card is the same as generating credit card PIN for the first time. This is to ensure that no unauthorized transaction can be made if your credit card is lost in transit or wrongly delivered to someone else. However, as we have mentioned above, card activation is not the same as opening a credit card account. As soon as you get approved for a card, the first thing that the banks do is create your new credit card account. Based on this new account, your physical card will be created and then linked to it. So, basically, you have an account even before you get your credit card mailed to you. This is the reason why you get the messages and emails about your new credit card soon after you have been approved.

Is your credit card account open even if you didn’t activate the card?

Most of the credit cards are already active when they are sent to you and, therefore, can be used for transactions that do not require PIN such as online purchases and international transactions. If you do not activate your credit card (set a PIN), you would not be able to use it for offline payments/PIN-enabled POS transactions.

Fees and Charges on Your Inactive Credit Card

You would be annoyed at the thought of paying fees on a card you have never used but the terms and conditions laid down by the bank would require you to do so. When you apply for a new credit card, you agree to the terms and conditions related to the said card. This also includes the joining fee and annual fee. So, if the card carries an annual fee, you will owe the same to the bank every year, even if your card is not activated. Since you are not using the card, there is no chance for you to get the fees waived off as a waiver is usually offered on reaching spending milestones. If you have a long relationship with the bank with good records, you can ask them to waive the fee on your card. Though the bank is not obligated to do so as you signed it off, they can still waive the fee as a courteous step towards a patron. Related Article: 7 Credit Card Fees and Charges You Must Be Aware Of

Did you Know?

Not activating your credit card could impact your credit score if you lapse on your payments. Remember, your account is open, even if you don’t activate your card. That means that you are responsible for paying any associated fees for the account, and payment history is the largest factor used in calculating your credit score. If fees go unpaid, your credit score will be negatively affected.

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How to activate your credit card?

The procedure for card activation may differ from one bank to another. You will have to create your first-time PIN which will eventually activate the card for use at POS machines and for transactions that need PIN. Given below are the ways to activate credit cards from some popular banks.

HDFC Bank– You can activate your HDFC credit card by visiting the nearest HDFC Bank ATM. Call their customer care and ask for OTP. You can then insert the card in the ATM machine, select the Create new ATM PIN using OTP option. Enter the OTP received and create the PIN. After this, your card will be activated. If you already have savings/current account with the bank and use their net banking service, you can directly activate the card using net banking.

SBI Card– Your new SBI Card can be activated by registering for their net banking service. Once you have registered successfully, log in using your ID and Password. Go to the ‘Requests’ tab and select the card activation option.

Axis Bank– You can activate your Axis Bank credit card through net banking or mobile app. Log in using your customer ID and Password, go to the credit cards sections and set your PIN by entering the OTP sent to your registered mobile number. The card can also be activated at an ATM. Axis Bank automatically sends OTP when the card is dispatched, so you do not need to call the customer service.

ICICI Bank– ICICI Bank allows its customers to activate their new credit card through multiple ways such as internet banking, mobile banking, ATM and customer care. You will need an OTP for creating the new PIN which will be sent to your registered mobile number.

Citibank– If you have recently received your Citibank credit card, you can activate it through net banking, mobile app or through IVR customer service. For activating the card online and through the mobile app, you should go to the PIN related section for activation services.

If you have a credit card from any other bank, you can call their customer service to know how to activate the credit card.

How much time do you have to activate your credit card?

In order to be able to use your card at POS machines, you should activate it as soon as possible using any of the methods that the bank offers. But if you have been caught up and could not activate it immediately, there is no need to worry. Mostly, there is no time limit to activate the card unless your bank has specified otherwise. However, the OTP sent to your number will be valid only for a limited period as mentioned in the message.

So, if you have a credit card for quite some time and have not been able to activate it, you should call the customer care service to generate a new OTP and use the same to set your first-time PIN.

Will closing an inactive credit card affect your credit score?

As we have said already, all credit cards are initially active meaning that you can use them for transactions that do not require PIN. So, the effects of closing an un-activated credit card will be the same as an activated one. If you close the card, your overall credit limit will be reduced which, in turn, will hit your credit score.

Even if you are not using a credit card, we recommend that you keep it open as the unused limit will help your score, unless it carries a high annual fee.