Buzz
Receiving a credit card in the mail can be a thrilling moment. You've done your research, picked the perfect card for your needs, and been approved. Your new card represents your financial power. But what if that card showed up unexpectedly, and you never requested it?
A Reddit user named suicidal_whs recently shared their story on the r/personalfinance subreddit. They had visited a motorcycle dealership last fall, contemplating buying a new bike. The salesperson mentioned a brand-specific credit card offer, but the buyer made it clear they didn’t want a card unless they made the purchase. They completed a credit card application under the assumption it would just check their credit, and the salesperson assured them the card wouldn’t be issued unless the sale went through. However, the sale never happened.
To their surprise, the motorcycle shopper received a charge card in the mail a few months later. After canceling the card, they questioned whether that was enough to safeguard their credit. I reached out to Matt Schulz, chief industry analyst at CompareCards, for advice on what to do if a credit card is opened in your name without your approval.
Think carefully before filling out any forms
If you're considering filling out a credit card application, whether online or on paper, don't assume it's just for checking your credit score and eligibility for rates. “Never, ever submit a credit card application unless you actually want the card,” Schulz advised. “This applies to most financial products as well.”
The Consumer Financial Protection Bureau suggests that you should never record your Social Security Number or input it on a keypad unless you are certain you want to open the credit card.
There is one exception: Apple Card allows you to review the terms of the card before deciding whether to proceed with opening the account.
Immediately report any fraud
If you resisted the salesperson's push to apply for a credit card but still end up with one, it's clear-cut fraud.
Your first move should be to contact the card issuer, Schulz advised, to inform them that the account was opened without your permission. After that, he suggests filing an identity theft report with the Federal Trade Commission and also filing a police report. “These actions can serve as evidence that you were victimized,” he said.
You might also want to file complaints with the Consumer Financial Protection Bureau and the Better Business Bureau to alert others and raise awareness about the issue. The CFPB, for instance, has over 1,800 complaints in its database from consumers who were sent unsolicited credit cards.
If you're feeling particularly frustrated, consider leaving negative reviews online to further expose the company.
Safeguard your credit
Next, take steps to secure your credit so that this situation doesn’t repeat—and ensure that the person who opened the card can't open more accounts in your name.
Start by placing a one-year fraud alert on your credit report with all three credit bureaus, but don’t stop there. After filing a report with the FTC, send a copy of that report to each credit bureau to place an extended fraud alert on your credit report. This alert lasts seven years and requires creditors to contact you before extending credit in your name.
Freezing your credit is another smart move to prevent new accounts from being opened without your knowledge. It’s a free service, so there's really no reason not to take advantage of it.
Think carefully before you cancel the card
While the CFPB advises canceling the card when you report fraud to the issuer, Schulz suggests that keeping the card might actually work in your favor.
“Opening a new credit card will have a small, temporary impact on your credit,” Schulz explained. “However, over time, it can actually boost your credit by improving your utilization ratio.” The only exception would be a card with an annual fee. “There’s no reason to pay an annual fee for a card that you’ll never use,” he added.
If the card you received is a store-only card that you know won’t be used, it will likely be closed by the issuer after a few years of inactivity. However, a co-branded card (one that works at both the retailer and other locations) can be beneficial to your credit profile, Schulz said. “It might be a good idea to keep the card, put a regular, predictable expense like a Netflix subscription on it, and set up autopay to cover the exact amount every month,” he suggested. “This way, you’re building a positive payment history without the risk of overspending.”
