Do Unused Credit Cards Hurt Your Score?

What will happen if you don’t use your Credit Card? Credit Card use is a staple in many customers’ budgetary lives. The capacity to pay for huge buys or startling costs inside and out when reserve funds aren’t accessible or are reserved for another goal is a significant instrument.

Deciding on how to use your credit card depends on individual needs. However, neglecting its use altogether may lead to consequences.

Once you know these dangers, it can help in determining the best approach for managing rarely-used cards.

So, let’s see what will happen to your credit card if it isn’t frequently used.

What Will Happen If You Don’t Use Your Credit Card?

If you don’t use your credit card, things could happen like:

1. The Risk of Credit Card Closure

If you let your credit card sit unused for a long time, the company might close your account. 

This closure could have negative effects on your credit score. 

Closing a credit card reduces your total available credit, which can bump up your credit utilization ratio. 

Also, if it’s an older card, saying goodbye to it might lower the average age of your accounts, which isn’t great for your score either. 

2. Danger of Fraud

If you haven’t used your card in a while, you might think you can skip checking your statement. But that’s risky. 

Without keeping an eye on your monthly statements, you might not notice any fraudulent charges for weeks or even months. 

Even if you don’t use your card much, it’s smart to regularly log into your account online or on the app to scan for anything fishy.

If you don’t spot any unauthorized charges and don’t report them, your credit card company won’t know they’re not yours and end up on your statement. 

Missing a payment because of these charges could hurt your credit score and lead to extra late fees. Plus, you’re opening yourself up to even more fraud.

Should You Cancel a Credit Card You Don’t Use?

Before canceling a credit card you don’t use, think about how it might affect your credit score, available credit, and overall finances. 

There might be other ways to handle it instead of getting rid of the card completely.

For instance, even if your card has a high-interest rate, you can avoid paying interest by paying off your balance in full every month. 

Using the card for small purchases and paying them off before the due date can help build your payment history, which is good for your credit score. 

This way, you keep the card active and prevent any negative impact on your credit score that could come from closing it.

If you’re not using a card much, you could look into switching to one with a rewards program that suits you better. 

Some credit card companies allow you to switch to a different card without changing your account or closing it. 

Would I Incur Charges for Non-usage of My Credit Card?

You won’t face charges just for letting your credit card gather dust anymore, thanks to a ban by the Federal Reserve in 2010 on those inactivity fees. 

However, it’s essential to note that while you won’t be hit with fees for not swiping your card, you could still encounter some standard charges.

The main culprits are the annual fee and any interest that builds up if you carry a balance. 

But if you’re diligent about paying off your balance and you’ve chosen a card with no annual fee, you’re likely in the clear. 

When Does a Credit Card Close from Inactivity?

There’s no set time limit for how long a credit card can go unused before it’s closed. 

Some lenders might close your account after a few months of inactivity, while others may leave it open for much longer. 

It’s generally okay to not use your card for a month or so, but if it’s longer, it’s a good idea to check with your issuer about their policy to avoid any surprises.

In some cases, lenders might close an inactive card after about six months to a year, while others might keep sending you new cards hoping you’ll start using them. 

Overall, though, issuers won’t rush to close an unused card since it’s part of their business to keep accounts open.

How Do I Keep My Credit Cards Active

Keeping your credit cards active doesn’t have to be complicated. You don’t need to spend big or risk getting buried in debt. 

One simple strategy is to use your credit card for just one monthly subscription payment. This keeps the card active without much effort.

Using your credit card for regular payments and paying off the balance promptly helps keep it active and improves your credit score.

Also, regularly reviewing your transactions helps you spot any unauthorized charges, safeguarding your finances.

Limiting your credit card transactions to essential expenses also makes it easier to spot any odd or suspicious activity. 

Not using a specific credit card won’t directly affect your credit score if the account remains open. However, inactive accounts might get closed by the bank, causing potential issues. 

If a card is closed, your credit utilization rates could rise, impacting your score. It’s wise to keep your oldest accounts open to positively impact your credit history length. 

To keep a rarely used account active, simply make a small purchase every few months and pay it off completely before the billing cycle ends.