Do You Have to Activate a Credit Card?
Just got a new credit card? Uncover the necessity of activation, simple methods to do it, and the implications of leaving it unactivated.
Receiving a new credit card in the mail often prompts a common question: does it need to be activated? While the card may look ready for use, most financial institutions require a specific activation step before you can begin making purchases. This article will explain why activation is necessary, how to complete the process, and what the implications are if you choose not to activate your new credit card.
Why Credit Card Activation is Required
Credit card activation serves as a crucial security measure designed to protect both the cardholder and the issuing financial institution. When a new card is mailed, there is a possibility it could be intercepted or stolen before it reaches its intended recipient. Requiring activation ensures the card has arrived safely and is in the hands of the legitimate cardholder.
This process verifies the identity of the person who received the card. By activating it, you confirm receipt and signal your intent to use the account. This prevents a lost or stolen card from being used by someone other than the account holder.
Methods for Activating Your Credit Card
Activating a credit card is a straightforward process with several options. One method involves calling a toll-free number, printed on a sticker on the card or in the accompanying paperwork. During the call, you will be prompted to provide your full card number, the security code (often a three-digit number on the back of the card), and personal identifiers like the last four digits of your Social Security Number or your date of birth to confirm your identity.
Many card issuers also offer online activation through their official website or online banking portal. This requires logging into an existing account or creating a new one, then navigating to an activation section to input card details.
Financial institutions also provide the option to activate your card via their mobile banking application. This involves logging into the app and following prompts within the card management or activation section, requiring similar card and personal verification details.
What Happens If You Don’t Activate
If you choose not to activate a newly received credit card, the most immediate consequence is that you will be unable to use it for any transactions, including purchases or cash advances. While the physical card remains inactive, the account itself is typically considered open from the moment it was approved. This means that any applicable annual fees will still be charged to the account, even if the card is never activated or used.
Card issuers may eventually close an account that remains unactivated for an extended period, often ranging from 45 to 60 days. If an account is closed due to inactivity, it generally does not directly harm your credit score in the same way a missed payment would. However, the initial hard inquiry on your credit report from the application remains, and the closure could indirectly impact factors like your average age of accounts and credit utilization ratio. An unactivated card does still pose a minor security risk if it falls into the wrong hands, so it is advisable to securely dispose of any cards you do not intend to activate.