What happens if you activate a credit card and don t use it

When you successfully apply for a credit card, the card-issuing company typically sends you an unactivated credit card and expects you to activate it through your online banking account or by calling the card company. Without doing so, you may not be able to transact using the card - which makes not activating the card sound like an easy way to avoid using the card. 

However, unless the credit card company deactivates the card themselves, you are exposed to the risk of fraudulent card usage. You can instead activate the card and ask the issuer to cancel the card if you don’t plan on using it at all.  

Why do I need to activate a credit card?

Activating a credit card is a security measure that prevents its misuse, as you usually need to login into your credit card account, or otherwise confirm your identity to activate it. If the card is sent to the wrong address or person, they would not be able to activate the card or use it. 

When credit cards were first introduced, cardholders needed to sign on the back of the card before they could use it. Merchants were required to match this with the customer’s signature at the time of the purchase to verify the transaction. With credit cards now used for digital payments as well, credit card issuers have to take more precautions. 

By activating your credit card, you can confirm yourself as a legitimate cardholder, set up additional card protection, and avoid being defrauded.

Will activating or not activating the credit card affect my credit score?

Once you receive the credit card, neither activating the card nor choosing to leave it inactivated can change your credit score. However, once you activate the card and start using it, but miss repaying the card debt in time, your credit score could be negatively impacted. As missing repayment deadlines can also mean having to pay interest on the debt, you may consider budgeting your spending to ensure you can pay off the debt in full each month.

In general, credit card companies check your credit score when reviewing your credit card application, but only with your permission. Note that a single credit inquiry doesn't impact your credit score much but multiple credit checks in a short time could make you appear credit hungry when a future lender or credit provider pulls out your credit report. This might raise a red flag and make it difficult for you to qualify for new credit.

Whether or not your application gets approved doesn’t directly impact your credit score. However, when you are rejected for a credit card, it is recorded on your credit report. When you apply for another credit card immediately after rejection, it might lead to your application getting declined again. It’s advisable to work out why your application was declined and improve that area before applying again to increase your chances of getting approved for a credit card. 

What should I do if I don’t want to use the credit card issued to me?

If you’ve received a credit card but don’t want to use it, you can contact the card issuer and request them to cancel the card. In Australia, credit card regulations require card issuing companies to let customers choose either to cancel their card or request a lower credit limit. 

You could consider doing so, for instance, if you are worried about racking up too much debt. However, cancelling your credit card or lowering your credit limit could hurt your credit score in some situations, and the right decision for you will depend on your personal circumstances. 

You may consider speaking with a financial expert to understand how closing a credit card or reducing your credit limit will affect your credit score or the ability to secure future credit, like a home loan.

Questions you may have

If you’re wondering how long a credit card fraud investigation takes, you should realise that each institution will have its own process for investigating fraud. This means that the time it takes to resolve disputes can also vary, and it all depends on your card issuer. In general, however, it can take anywhere from 21 days to 90 days. 

The basic process involves raising a dispute about the transaction or transactions that you think were due to credit card fraud with your bank. If you succeed, any money you’ve lost due to this fraud will likely be credited to your account within three business days after the investigation is concluded. The time taken to credit money to your account may vary due to the type of dispute you’ve raised and if the business that the transaction was made with decides to challenge your claim. Some card disputes are known to take up to 45 days.

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

Your ANZ credit card is considered expired only after the last day of the month and year marked on your card. For instance, if your card’s expiry date reads 03/23, it is valid until 31 March 2023 and expires on 1 April 2023. Typically, you should have received a new credit card by that date, and you won’t have to request a new card. 

Once you get the new card, you should remember to switch any automatic payments you have - such as a utility or mobile phone bill - from your expired credit card to your new credit card. Equally, if you are using CardPay Direct to repay your ANZ credit card debt, you may need to update the credit card account details for that service as well. 

In case the new card doesn’t arrive by the expiry date of your current credit card, you can call ANZ on 13 22 73 to find out the reason and if you need to request an expedited card. Please note that if you were planning to close your credit card account or request a credit card upgrade, you may need to call ANZ at least before the 25th of the month your current credit card expires in, as that’s when they may send you the new credit card.

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

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Jodie Humphries

Jodie Humphries is an experienced Personal & Home Finances Editor for RateCity with expertise in financial topics, including credit, loans, superannuation, mortgage and housing, insurance, telecommunications, and more. For over a decade, Jodie's journalism and editing career has seen work published at both Finder and Sharesight, and as one of RateCity's chief contributors, Jodie spends her time working on ways to make personal finances within reach of everyone in Australia.

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