Home > Credit Cards > How Your New Credit Card Could Hurt Your Credit

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Chances are, you recently received a new EMV chip credit card or debit card. (And, if you haven’t, don’t fret: yours is likely in the mail.) These cards can certainly help protect you from counterfeiting, but cardholders beware: There is a way they could inadvertently hurt your credit score.

Replacement cards — typically issued when a card expires, fraud occurs or an issuer needs to do an upgrade — more often than not come with some type of change to your account information.

“The changes could be subtle or they could be obvious,” Bruce McClary, vice president of public relations and external affairs at the National Foundation for Credit Counseling, said. For instance, the account number on the front of your card may stay the same, while the expiration date or its security code (located on the back) could be different.

Changes to any piece of this aforementioned data, however, could cause an automatic bill or recurring payment associated with the card to get declined. “When [creditors or service providers] try to process your next charge, it’s going to come back rejected,” McClary said. After that, “there are whole number of scenarios that could unfold.”

In a best-case scenario, the creditor or service provider would call you, get the new account information and process the payment before it’s actually due. In a less-than-ideal scenario, the bill could go unpaid — and if this bill is a loan payment (more commonly tied to debit cards or checking accounts, though some creditors do accept payment via credit card), you may wind up with a missed payment on your credit report. Missed payments are one of the quickest ways to tank a good credit score. In fact, a new one can cause a drop of about 100 points to a FICO score of 780 or higher.

Missing a non-loan payment, like a gym membership or streaming subscription, can be equally problematic, since, if left unaddressed long enough, they could wind up in collections — and that type of slip will also badly damage a previously stellar credit score.

How to Prevent Any Credit Score Problems

Once you get an EMV chip card — or any replacement credit or debit card, really — in the mail, spend some time reviewing the monthly billing statements associated with that account to identify any linked automatic billing or recurring charges. “Go back 12 months if you can, because sometimes you have things that you are billed for annually,” McClary said. You can call these creditors or service providers to update your billing information. (You may be able to do this online as well.)

You can also monitor your credit report regularly to spot a missed payment or collections obligation. You can get your credit report for free each year at AnnualCreditReport.com or check your credit scores each month for free on Credit.com.

There are some steps, too, that you can take to minimize the odds of a replacement card coming back to haunt your credit score. First, “designate one of your credit cards as the card that any of your accounts that you want to have automatically processed,” McClary said. “The simpler, the better when it comes to automatic billing.”

You can also try signing up for any email or text messaging alerts that a creditor or, even, service provider, like your cable company, may offer. These alerts can help you keep track of due dates and readily spot if a payment has gone unprocessed.

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  • crosstown

    Here’s how “[a retail card]” can hurt your credit score. You go in and select your items that are on sale. At the register, the cashier informs you that you can get an extra 20% off if you apply for an account and that it will only take a moment. You agree. Two minutes later, you’re rejected and will receive an explanation in the mail. Later on, you discover that your credit score has dropped because of the “Hard inquiry.” Avoid “[the retail card]” trap.

  • Dennis Elliott

    How true! This very same incident happened to me. I had a card that could no longer be trusted due to a web site taking money from my account for something I never even finished the application for. I got the money refunded, though it took some time to do. My issuer told me to cut up that card, and they would issue me a new one.

    After waiting some two weeks or so, I finally received my new card, activated it, and sure enough Netflix e-mailed me about a concern over my card number’s security code? I had to go over the whole process of renewing my prescription, but it would appear seamlessly in my account pages as if nothing had happened? They couldn’t get their auto-pay to accept my new card due to my new security code on the back.

    Thankfully, that was the only thing I had on bill pay, except for the utilities providers, and they had my bank to rely on for the correction. Nothing bothered my credit, thankfully, as I am building it up for a home loan. I have an account here with your site, so I can keep tabs on my credit rating. Very handy, this site!

    Thank you,


  • Jan

    If this is the case and we are not notified of the new change we should not be turned over to collection by the person issuing the new card, especially if it is automatic payments, why do we set up automatic payments so we won’t be late some burden should fall on the institution that is sending out the new card.,and if this happens, the cra should excuse the late payment why does everything fall on the consumer, especially when a person works hard to keep their payments excellent

    • crosstown

      “We should not be turned over to collection by the person issuing the new card.” Jan, you misunderstood the article. Read the article again, carefully.

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