If you receive a credit card and never use it, there are several things that could happen. Firstly, the issuer of the card may close your account if you do not make any transactions for a certain period. This is usually within 6 months to a year after the card is issued. However, some issuers may allow you to keep the account open indefinitely with no activity, but they may charge an annual fee or reduce your credit limit.
Secondly, if you never use the card, you will not build any history on the card. This means that when you eventually decide to use it, you will have a short credit history, which can affect your credit score negatively. A shorter credit history can make it harder for you to get approved for loans or credit cards in the future.
Thirdly, if you never use the card, you will not be able to take advantage of any rewards programs that the issuer offers. These programs typically offer cash back, points, or miles that can be redeemed for travel, merchandise, or other benefits. By not using the card, you are missing out on these potential perks.
Fourthly, if you never use the card, you may miss out on fraud protection. Many credit cards come with zero-liability protection, which means that if someone uses your card without your permission and you report the loss promptly, you won't be responsible for any unauthorized charges. If you don't use the card, you won't have this protection.
Fifthly, if you never use the card, you may face fees for having an unused account. Some issuers may charge an annual fee if your account is not used frequently enough. Additionally, if you have a balance on the card, interest may accrue on that balance until it is paid off.
Sixthly, if you never use the card, you may miss out on opportunities to improve your credit score. Credit scores are based on factors such as payment history, credit utilization ratio, length of credit history, and more. By not using the card, you are not contributing to any of these factors, which could negatively impact your score.
Seventhly, if you never use the card, you may miss out on the opportunity to establish a credit history. Having a credit history is crucial for getting approved for loans, mortgages, and other types of credit. Without a history, you may find it difficult to qualify for these types of loans in the future.
Eighthly, if you never use the card, you may miss out on the opportunity to build a positive relationship with the credit card issuer. Building a good credit history with one issuer can help you get approved for other credit cards from that issuer in the future.
Ninthly, if you never use the card, you may miss out on the opportunity to learn how to manage your finances effectively. Using a credit card regularly can help you develop good financial habits, such as budgeting and paying bills on time.
Tenthly, if you never use the card, you may miss out on the opportunity to explore new spending options. Credit cards often offer exclusive deals and promotions that can help you save money on purchases. By not using the card, you may miss out on these opportunities.
In conclusion, while it may seem tempting to simply ignore a credit card if you never plan to use it, doing so can have negative consequences on your financial health and credit score. It is important to evaluate your needs and decide whether a credit card is right for you before signing up for one. If you choose to get a credit card and never use it, make sure to read the terms and conditions carefully to understand any fees or penalties that may apply. Alternatively, consider closing the account if you are not planning to use it, to avoid any unnecessary fees or damage to your credit score.