Leaving CC Unactivated?

[lamEduDe]

Just wondering is it ok to leave newly applied CC unactivated? And then cancel it after 6 months. Does it hurt credit rating? Any cons? Thanks!

 

[dante-z]

no wonder i am not getting my commissions !!

 

[denial86]

no wonder i am not getting my commissions !!

LOL!! TS why so funny. Then why did you apply for that card? Got forced? Since nowadays most freebies are only given after you use it, not sure what's the point in you not activating it.

 

[zirhk3355]

It doesn't give you a bad rating directly, but it is still not a good thing to do.

When you apply for a new card, the bank will check on your credit status. So there will be a status update in there stating "new card application" by your issuing bank.

Then, even if you do not activate the card, your credit report will still show up that you have the card. There is no difference whether you activated it or not. This counts towards your total liability when computing your debts.

Lastly, I recently realised the banks also make an assessment on you based on the date of the last activity; eg even if you have no balance but your last activity (new application, just used / cleared balance) is only 1 or 2 months ago, it is not a positive sign. If they are computing MSR/TDSR, they may take the whole credit limit or part thereof into account.

In brief, the quick answer is yes, applying for a card and leaving it inactivated still affects your credit records!

 

[lamEduDe]

LOL!! TS why so funny. Then why did you apply for that card? Got forced? Since nowadays most freebies are only given after you use it, not sure what's the point in you not activating it.

Haha well cos theres this time the sales guy at roadshow ask if i could sign more cards so he can hit his quota for the day, so i give him the benefit of doubt and helped him out by signing cards im never gonna use. And the freebies is given for a transaction on a single card instead of a transaction on each card applied. So i activated 1 card to use and leave the rest unactivated

 

[lamEduDe]

It doesn't give you a bad rating directly, but it is still not a good thing to do.

When you apply for a new card, the bank will check on your credit status. So there will be a status update in there stating "new card application" by your issuing bank.

Then, even if you do not activate the card, your credit report will still show up that you have the card. There is no difference whether you activated it or not. This counts towards your total liability when computing your debts.

Lastly, I recently realised the banks also make an assessment on you based on the date of the last activity; eg even if you have no balance but your last activity (new application, just used / cleared balance) is only 1 or 2 months ago, it is not a positive sign. If they are computing MSR/TDSR, they may take the whole credit limit or part thereof into account.

In brief, the quick answer is yes, applying for a card and leaving it inactivated still affects your credit records!

Wow thanks for this knowledge, very useful. Now i better stop applying for cards just to get freebies..

 

[Polar Bear King]

LOL!! TS why so funny. Then why did you apply for that card? Got forced? Since nowadays most freebies are only given after you use it, not sure what's the point in you not activating it.

I guess roadshow sign up only 1 but got sent >2 cards thus the excess cards not activated.

 

[Mr_Farmer]

i had a friend who didn't have any credit cards... she applied for loan..got rejected.. and was apparently told she has .... NO credit rating so hard to get loan

 

[cybercom8]

It doesn't give you a bad rating directly, but it is still not a good thing to do.

When you apply for a new card, the bank will check on your credit status. So there will be a status update in there stating "new card application" by your issuing bank.

Then, even if you do not activate the card, your credit report will still show up that you have the card. There is no difference whether you activated it or not. This counts towards your total liability when computing your debts.

Lastly, I recently realised the banks also make an assessment on you based on the date of the last activity; eg even if you have no balance but your last activity (new application, just used / cleared balance) is only 1 or 2 months ago, it is not a positive sign. If they are computing MSR/TDSR, they may take the whole credit limit or part thereof into account.

In brief, the quick answer is yes, applying for a card and leaving it inactivated still affects your credit records!

so summary is holding a lot a lot of credit cards (mostly ununsed) is not good for your credit record?

 

[zirhk3355]

so summary is holding a lot a lot of credit cards (mostly ununsed) is not good for your credit record?

It really depends on what you want to do and how the person reads the report.

Eg if u r applying for more cards, then having existing cards but not used maybe a good sign that you wont overspend.

But if you are applying for a long-term loan (car, home, etc), then its a bad sign cuz there is risk you can overspend with a snap of the fingers since your cards are all there.

The last used record is important.

Sent from GAGT Android App

 

[ORELLE]

It really depends on what you want to do and how the person reads the report.

Eg if u r applying for more cards, then having existing cards but not used maybe a good sign that you wont overspend.

But if you are applying for a long-term loan (car, home, etc), then its a bad sign cuz there is risk you can overspend with a snap of the fingers since your cards are all there.

The last used record is important.

Sent from GAGT Android App

Sorry, but what do u mean by last used record.

Is it the last used record for any card or all the cards?

 

[zirhk3355]

Sorry, but what do u mean by last used record.

Is it the last used record for any card or all the cards?

Both are important. For eg:

Card A: Limit is $5,000, nil bal but last used 1 month ago.
Card B: Limit is $4,000, nil bal but last used long time, maybe 8 months ago.

According to what I know from certain banks, they will take full or as high as 70% limit of Card A $5,000 as your potential liability, while for Card B they will just take 30% or even none as your potential liability.

So the last used record is important in determining your total debt servicing ratio (TDSR).

 

[Sauron]

signed a few cards recently, activated those that gives free gifts and credit. Used up the credits then throw one side.

 

[foreseer]

err the other day i applied for loan with ANZ, then after that cancelled loan over the phone but they still sent the card + cheque book over. i called up 2 times to kan the CSO say before approval i called in to cancel...

then they say ok confirmed i cancelled. then 3 days later and dunno 7 or 14 days later they still sent sms ask me to activate card... this reminds me... maybe i should call ANZ again

 

[Polar Bear King]

i had a friend who didn't have any credit cards... she applied for loan..got rejected.. and was apparently told she has .... NO credit rating so hard to get loan

Borrow money return money on time on target--1st class people!
Don't borrow how to know you are trustworthy to return? Untested,unclassified.

 

[spearhawk]

Both are important. For eg:

Card A: Limit is $5,000, nil bal but last used 1 month ago.
Card B: Limit is $4,000, nil bal but last used long time, maybe 8 months ago.

According to what I know from certain banks, they will take full or as high as 70% limit of Card A $5,000 as your potential liability, while for Card B they will just take 30% or even none as your potential liability.

So the last used record is important in determining your total debt servicing ratio (TDSR).

If you pay your cc bills in time, is the credit limit still considered into the TDSR calculation?

 

[beri stupid idiot]

Borrow money return money on time on target--1st class people!
Don't borrow how to know you are trustworthy to return? Untested,unclassified.

wise words indeed