what happens if you don't activate your credit card?
did you make an impulsive decision to get a best credit card and are now regretting it? maybe the financial freedom of shopping at your favourite merchandise store lured you into the mix. or maybe you were unable to gauge the emotional implications of carrying it around.
whatever the case, here is how the activation process usually boils down to:
- you receive a new credit card via mail.
- the documents instruct you to call a toll-free number or visit a website.
- post successful identification, you confirm that you have received the card.
- the card is subsequently activated and ready to be used.
but, what if the tangibility of actually getting your hands on the credit card gives you cold feet? can you simply ditch the card and choose not to activate it?
thanks to RBI’s 2022 circular, you absolutely can. your bank will ask for OTP-based consent for activating your credit card, and if they don’t receive it within 30 days from the date of issuance, they are required to close your credit card account.
effect of inactivation
once again, the 2022 circular comes to your rescue. banks are now prohibited from disclosing any credit details related to new credit card accounts to Credit Information Companies until the card is activated. if the card is never activated, they are required to withdraw any previously reported credit information.
effect of credit card applications
that being said, if you are unsure about getting a credit card, you should never apply for it in the first place. a credit card application gives complete freedom to the bank to pull a hard inquiry on your credit score. this can potentially reduce your credit score by 5 to 10 points. note that this is the effect of every single hard inquiry. thus, multiple credit card applications can significantly tarnish your credit score.
do you have an unactivated credit card? share your experiences with us in the comments section. make your credit card payment via CRED to earn exclusive rewards and cashback.