What Happens If You Do Not Activate Your Credit Card

Not activating a credit card can have adverse effects on your credit score, hence, affecting your ability to get approval for credit in future. 

The application process usually involves a hard inquiry on your credit report. This may cause a temporary dip in your credit score, regardless of whether you activate the card or not. 

Once your application is approved, your credit card account is opened immediately, even if you do not activate the card. This means that any associated fees, such as annual charges, could start to accumulate even if you do not use the card. 

Failure to pay these fees will be reported to credit bureaus and may negatively affect your credit score.

As per the new Reserve Bank of India (RBI) guidelines effective from 1 July 2022, the following rules apply when activating your credit card:  

• Actions like generating a PIN, using Interactive Voice Response (IVR), changing transaction controls, making a recorded call to customer care, or sending an SMS can be considered as ways of credit card activation

• If you do not activate your card within 30 days of receiving it, the card issuer will ask for a One-time Password (OTP) to proceed

• To activate or close credit cards, the card issuer must obtain explicit consent from the principal cardholder, not from add-on cardholders

As per the RBI’s guidelines, you must complete the activation process (via OTP) within 30 days of receiving your credit card. If you do not activate the card within this time, the issuer may close the account. 

You can also decide to close the account yourself if you no longer wish to keep the card or for any other reason. If the card has an annual fee, you will not have to pay the next one as the account is being closed. Your credit score will not be affected if the credit card account is closed, as no charges will be applied.

Inactive credit cards can attract certain fees and charges, which vary as per the issuer and the type of card you have. Here are some common charges you may encounter:

• Annual fees

Many cards have an annual fee, which you need to pay even if you do not use the card. These fees can range from a small amount to several hundred rupees, depending on the issuer and the type of card.

• Inactivity fees

Some issuers impose an inactivity fee if you do not use your card for an extended period. Typically, this fee is charged if your card has been inactive for 6 months or more.

Once you provide the OTP for activation, the issuer will create an account for your new credit card and arrange for the physical card to be delivered. There are various methods available for activating your card. Review the options below to find the one that best fits your scenario:

Through the Issuer’s Website or Net Banking

Go to the issuer's online portal and follow the steps to activate your card:

1. Enter your login credentials to access your internet banking account

2. Once logged in, navigate to the section that allows you to start the activation process

3. Enter your card number, expiry date, and date of birth, among other required details

4. Set a PIN and enter the OTP received on your contact number to complete the process

Via the Issuer’s Mobile App

Download the bank's mobile app and follow these steps for activation:

1. Log in on the issuer’s app or register if you are a new user

2. Go to the section where you can begin the activation process 

3. Enter your card details, such as the card number, name, birth date, etc.

4. Verify the OTP sent to your registered mobile number

5. Create a new user ID and password, and your card will be activated

You can also contact the issuer's customer care service or visit the branch to receive guidance on the activation process from a representative.