Can I get approved for a credit card and not use it?

Can I Get Approved for a Credit Card and Not Use It?

Obtaining a credit card can be a strategic move for enhancing your credit profile. However, many people wonder if it’s possible to get approved for a credit card without actually using it.

Impact on Credit Score

Yes, you can get approved for a credit card and not use it. However, it’s important to understand that obtaining a new credit card, even if unused, will have an impact on your credit score.

Positive Influence

Initially, a new, unused credit card can provide a positive boost to your credit score in the following ways:

• Credit Mix: Having a variety of credit accounts, including revolving credit like credit cards, helps improve your credit mix.
• Available Credit: The additional credit limit from the new card can increase your overall available credit. This, in turn, improves your credit utilization ratio (the percentage of credit you’re using compared to your total available credit). Lower credit utilization is generally viewed favorably by credit scoring models.

Limited Positive Influence

While an unused credit card can initially boost your credit score, avoiding any activity on the card may limit its long-term positive influence.

• No Payment History: Regular on-time payments are crucial for building a strong credit history. Without any card activity, you won’t establish a payment history, which can hinder your score improvement.
• Account Dormancy: Some credit card issuers may close accounts that show no activity over a certain period. This can negatively impact your credit by reducing your available credit and potentially lowering your average account age.

Recommendation

If your goal is to improve your credit score, using your credit card responsibly is recommended. This includes making at least the minimum payment on time each month and keeping your credit utilization low.

By using your credit card wisely, you can take advantage of the positive aspects of having the card while avoiding potential pitfalls. Remember, obtaining a credit card is not an end in itself; it’s a tool that should be managed effectively to achieve your financial goals.