Suppose you see a credit card that comes with an excellent introductory offer, so you sign up and open an account. After you receive the bonus, the card takes a backseat to the others in your wallet. But what happens if you stop using your credit card altogether?
Well, you run a few risks by not using it. First, your credit card provider might cancel your account. And unless you routinely check your inactive account, you are also more vulnerable to fraudulent activity that can wreck your credit score and finances.
Of course, not a lot will happen if you go a few weeks without using your card. But if you never intend to use it, you might consider canceling your account.
You Could Miss Fraudulent Activity
According to US News My Money, the most significant risk that happens when you don’t use a credit card is that you may forget to check your statements. Neglecting your account could leave you blissfully ignorant about fraud. When you don’t use a card, you don’t think to check the statement, so you may not find an unauthorized purchase until it’s too late.
“You’re not going to be nearly as likely to stay on top of what’s happening,” Chris Dlugozima, GreenPath Financial Wellness’s learning experience designer, explained.
And as Linda Jacob, author and an accredited financial advisor at Consumer Credit of Des Moines, adds, the more time that passes, the worse fraudulent activity can get. “If you’re not paying attention, that could go on for months.”
Your Credit Card Issuer Could Close Your Account
Another thing that could happen when you let a credit card become inactive is the issuer may cancel your account. If it’s been a while since you used your card, this may not affect your credit rating. But if the inactivity becomes apparent to a creditor and they close your account, your score could take a hit. This causes your credit limit to drop and impacts your credit utilization ratio, or the amount of credit you use out of the total amount available.
Additionally, if you’ve had the card for years, it will lower your credit history’s average age, which is another factor that affects your score. And if the issuer closes your account before you redeem your rewards, you could lose all of those miles, cashback, and other perks.
Do Credit Card Issuers Charge You For Inactivity?
At one point, providers could charge inactivity fees if you didn’t use your card for a certain amount of time. Fortunately, the Federal Reserve made it illegal for issuers to charge inactivity fees in 2010.
However, if you have a credit card that comes with an annual fee, you still have to pay it, even if you never use the card.
How Long Can You Go Without Using A Credit Card?
There is no definite rule that credit card issuers use to determine when an inactive account should be closed. If you go a month without using your card, you don’t have anything to worry about. But after anything longer than that, you may want to contact your credit card provider and ask about its policy to prevent an unexpected card cancellation.
Dlugozima told US News My Money that he has had several cards that were canceled between six months or a year of non-use. “But I had another card that I didn’t use, and they just kept on sending me new cards, kind of begging me to start using them.”
According to Jacob, creditors usually aren’t rushed to cancel an inactive card. “They are going to leave it open. That’s their business.”
How To Keep Credit Cards Active
The best way to keep an “inactive” account active is to periodically use the card and review your monthly statements for fraudulent activity. The goal is to find a middle ground between using the card too infrequently or too often. One idea is to use your card to pay for one bill each month, such as a subscription service or something you can pay off quickly.
“Set up some sort of automated charge on the cards you are not using,” Dlugozima says. “In essence, what that’s doing is keeping that activity happening.”
Jacob suggests a similar tactic for her clients and uses it in herself. “We have one credit card that we use just for gas.”
- Kissell, Chris. “What Happens If You Don’t Use Your Credit Card?” U.S. News & World Report, U.S. News & World Report, 14 Dec. 2020, creditcards.usnews.com/articles/what-happens-if-you-dont-use-your-credit-card.