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Credit Card Canada - Canadian Credit Card Reviews and Applications How to Reactivate an Inactive Credit Card
There are many reasons why credit card holders can leave their card dormant for a longer period of time – perhaps they used the services of another credit company that offered better conditions or they simply did not make any major purchases for some time. Some credit companies may also interpret inactivity as a sign of personal financial difficulties and thus become suspicious of their customer if he decides to reactivate his card. This is especially relevant if the customer is planning to consume the line of credit as quickly as possible.
Why Does a Credit Card Become Inactive?
When a credit card has remained dormant for a long time, especially if the balance has reached zero, it will become inactive. In most cases, this is specified in your loan agreement, and you won’t receive any additional notifications from the lender. You may wish to reactive a dormant credit account, but it is not always easy, considering the abovementioned implications.
Reactivating a Credit Card
The specific conditions for credit card reactivation depend on the issuer you are working with; yet, there are some general guidelines to this process.
Step 1 – Request a Credit Report
First of all, you have to pull a current credit report, to make sure that your inactive account didn’t have a negative effect on your credit score. Urgent action is required, especially if you are more than 30 days behind on the account (meaning that you have unpaid balance).
A credit report is an official record of a person or company’s borrowing and repayment history, which also reflects bad credit – late payments or bankruptcy. Lenders use this information to establish if an individual is a suitable candidate for credit, i.e. whether he is willing enough to repay it. This is primarily determined by the timeliness of past payments to lenders. Other important factors for lenders are whether the borrower spends reasonably and if he has a stable background (home and job).
Step 2 – Check for Unpaid Balances
Once you have your credit report, you should check if there is any unpaid balance. It is important to get in touch with the issuer, especially if you find that some of the information is inaccurate. You need to check if there is any credit on the account – if there is, you will not need to reactivate the card. If, however, the account balance is zero, the card may have already been cancelled.
Step 3 – Request New Report
If your card was cancelled, simply ask the credit company’s representative to pull a new credit report, thus generating an inquiry on it. If you have a good credit score, they will most probably agree to reactivate the card without any additional delays. Bear in mind that your issuer may agree to reactivate your credit card under different terms. When your bank generates a new credit report, it is essentially opening a new account. If the terms and conditions on credit card accounts have changed, you’ll get your card under the new terms. In practice, this means that your credit limit and interest rate may change. If your card has expired, simply request a new one – you will not be able to use it, even if your account is reactivated. Again, do not forget to read the terms and conditions of your credit card agreement. The issuer may have changed its credit card policy.
In any case, it would be wise to keep close track of your credit accounts in order to avoid unpleasant situations or run the the risk of damaging your credit score.
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