If you've ever considered canceling a credit card that you haven't used, you might be wondering what happens if you do so. In this article, we will delve into the intricacies of canceling a credit card that has never been activated or used, and explore the potential consequences of doing so.
Firstly, it's important to understand that not all credit cards are created equal. Some credit cards require an activation process, where the user must either call the issuer or log into their online account to activate the card before it can be used. Others may come pre-activated, meaning they can be used immediately upon receipt. If you have a credit card that requires activation but you never use it, there could be several reasons why:
- You received the card as a gift: Many people receive credit cards as gifts from family members or friends. If the recipient never uses the card, it may simply collect dust until it is eventually discarded.
- You applied for the card but changed your mind: Sometimes, people apply for credit cards without fully understanding the terms and conditions, or they may change their financial situation and decide against using the card.
- You were given a promotional card: Banks and credit card companies often offer promotional cards to new customers or existing customers who meet certain criteria. These cards may have special benefits, such as cash back or rewards points, but if the customer doesn't qualify for these benefits or doesn't use the card, it may be cancelled.
Now that we've covered some of the common scenarios, let's address the question at hand: what happens if you cancel a credit card that you never used? The answer largely depends on the credit card issuer and the specific terms and conditions of the card. Here are some possible outcomes:
- No impact on your credit score: If you never activated the card and didn't make any transactions, it won't affect your credit score. However, if you did activate the card and made purchases, those transactions would appear on your credit report and could affect your credit score.
- Cancellation fee: Some credit card issuers may charge a cancellation fee if you cancel a card that hasn't been used. This fee is usually a percentage of the remaining balance on the card or a fixed amount, which could range from $0 to several dollars. It's important to check the terms and conditions of the card before canceling to avoid unexpected fees.
- Removal from your credit report: If you never activated the card and it was reported as "not approved" or "cancelled," it may eventually be removed from your credit report by the credit bureaus. However, this process can take several months, and the exact timing depends on the credit reporting rules of each individual credit bureau.
- Potential impact on future applications: Cancelling unused cards can help maintain a low credit utilization ratio, which is a key factor in determining your creditworthiness. A lower utilization ratio can improve your chances of being approved for new credit in the future.
To cancel a credit card that you never used, follow these steps:
- Contact the issuer: Call the customer service number listed on the back of your card or log into your online account to request a cancellation.
- Provide necessary information: You may need to provide your name, card number, and other personal details to verify your identity.
- Confirm cancellation: Once you've provided the necessary information, confirm that you want to cancel the card. Be aware that some issuers may ask you to confirm multiple times before proceeding with the cancellation.
- Follow up: After submitting your cancellation request, check your statements and online account regularly to ensure that the card has been closed and no further charges are made.
In conclusion, canceling a credit card that you never used is generally safe and won't harm your credit score unless you've already activated the card and made transactions. However, it's essential to review the terms and conditions of the card before canceling to avoid any unexpected fees. By keeping track of your unused cards and canceling them when necessary, you can maintain a clean credit history and improve your overall financial health.