It’s not that unusual to sign up for a new credit card and then to have second thoughts about whether or not to activate it when it arrives. What happens if you decide to hold off on activating the card, until you’re sure you want to use it? Does a never activated credit card still affect your credit score, even if you don’t technically activate it or make any purchases with it?

It’s not the activating of your card that affects your credit…

First, even though you need to activate the card in order to make purchases with it, whether or not you activate a credit card does not have an effect on your credit score. By going through the process of applying for a new credit card and opening the new account, you have already been approved for a certain credit limit, even if you never activate the card.

The key action that affects your credit score is applying for that card in the first place. During the process of applying for a new credit card account, your credit history has already been pulled and checked by the credit card issuer, and that “hard inquiry” may have an effect on your credit score.

…it’s how you use and manage your new card that matters.

Once you have the new credit card, any impact on your credit score — as a result of applying for the new credit account — has already occurred. So, as far as your credit score is concerned, any hit to your credit score happens as a result of applying for the card, not as a result of activating the card. It’s how you use a credit card that really matters:

  • In some cases, opening a new credit account can give you a higher total credit limit, which can improve your credit utilization ratio — the percentage of your total available credit that you’re using — so long as you don’t rush to max out the new card.
  • Using your new card to make occasional small purchases and then immediately paying off the balance can help you build credit history — without incurring interest charges on purchases, when you pay your balance in full every billing cycle. But keep in mind your repayment of loans to other creditors will also have an impact on your credit.
  • Closing your new credit card account might actually hurt your credit score, because it would reduce your total available credit and thus make your credit utilization ratio look higher to the credit reporting agencies.

If you’re having doubts about whether you actually want your new card, you can always cancel it. But if you are confident that you can use the new card responsibly, and pay it off on time without accumulating debt, go ahead and activate it and proceed to use it wisely.

Instead of looking at a never activated credit card as a possible threat to your credit score — which it isn’t — think of the potential to use the card to help build your credit. The credit card issuer has already decided that you are creditworthy enough to receive the new card. So long as you can use your new credit limit responsibly, your new card can be a source of convenient spending, cash flow management, and can even help you build your credit over time.

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