Credit Card: Individuals frequently utilize credit cards for various financial transactions. These cards not only offer funds during emergencies but also facilitate large purchases through the option of equated monthly installments (EMI). Additionally, they contribute to the development of a favorable credit score and provide enticing rewards. Many people rely on credit cards for their everyday expenses and online shopping.
However, some users may rarely or never use their credit cards, leading to them becoming inactive or dormant. A credit card is typically classified as dormant if it has not been used for a period ranging from six months to one year, during which no activities such as balance transfers, purchases, or cash advances have occurred.
Why a credit become inactive
The dormancy of a credit card can adversely affect your credit score. Consequently, if you need to secure a loan, you may encounter challenges in obtaining approval, as credit scores are crucial for loan eligibility.
Automatic Closure – Financial institutions may terminate your credit card if it remains inactive for an extended duration, which can negatively influence your credit history.
Loss of Rewards and Benefits – Each credit card provides specific rewards and benefits for transactions. Therefore, not utilizing the card results in missed opportunities for rewards, cashback offers, and amenities such as lounge access. If the card becomes inactive and is subsequently closed, you will forfeit any accumulated reward points and benefits.
Impact on Credit Score – A dormant credit card can detrimentally affect your credit history, potentially complicating future applications for loans or new credit cards.
If your card has become inactive, reactivation is possible. Typically, banks and financial institutions allow a grace period for reactivation after deactivation.
How to reactivate a credit card
To reactivate your inactive credit card, you may either visit the nearest branch of the issuing bank or activate the card through the official website.