How Credit Card Inactivity Affects Your Score | Bankrate (2024)

There may come a time when you realize that you’ve stopped using one of your credit cards — maybe even unintentionally. It could be an old card that you got years ago, and you just don’t need it much anymore. Perhaps it’s a retail card for a store you no longer shop at, or a gas card from before you sold your car and moved to the city.

Credit cards are a useful financial tool, but — as life changes — so do the needs you may have from your card. Whether it be high annual fees, costly interest rates or rewards that just aren’t cutting it, there are plenty of reasons your credit card may have become less useful.

While there may be a good reason to stop using a credit card, you should know what it could mean for your credit score. Let’s explore how not using your credit card may affect your credit score and consider some ways to manage any changes.

What happens when your credit card is inactive?

When you have an open credit card account, issuers obviously want you to use the credit they have made available to you. Not using your credit card for an extended length of time can cause your card to be considered “inactive.”

Not using a credit card isn’t necessarily a bad thing. However, it can come with some unintended consequences. Although charging inactivity fees is no longer legal, issuers have other options at their disposal — some of which could affect your credit score, your available credit and more.

Can a credit card be closed due to inactivity?

The short answer is yes. A credit card issuer has the right to close your credit card if you don’t use it.

Unfortunately, closing an account can have an adverse effect on your credit score. Before you run out and charge something just to keep your account active, however, you should know that it usually takes a year or more of inactivity for the issuer to close the card.

It’s also important to note that you might not get any warning that your issuer is closing your account. Credit card companies are not required to notify customers of account closures if they are being closed due to inactivity.

If you find that your credit card account has been closed and you want to reopen it, you will need to contact the issuer. You may be able to get your account reinstated if you contact your issuer soon enough. Issuers have different policies, so it is not a given that you will be able to do so. Still, it won’t hurt to ask.

Do unused credit cards hurt your score?

You may be wondering if it hurts your credit score to not use a credit card. Generally speaking, it does not. In fact, the opposite may be true. Keeping an unused credit card open can help keep your credit score higher.

Your length of credit history is a factor that makes up 15 percent of your overall FICO score. This is really the only portion of your overall score that you have relatively little control over — that is until you decide to close one or more accounts. Length of credit history is calculated by factoring in the age of your oldest account, the average age of all of your accounts and how long it has been since you’ve used certain accounts. Keeping a card that you’ve had for a long time can improve the length of your credit history, even if you don’t use it.

You must also consider your credit utilization ratio, which shows how much of your total available credit you have used. This is the second most important factor (after payment history) in your FICO credit score, accounting for 30 percent. It is generally considered best practice to keep your credit utilization below 30 percent of your overall credit line, though people with the best credit scores tend to have a number in the single digits. Even if you don’t use a card, having a card open with available credit improves the ratio of the amount of credit you’re using compared to what you have available.

Should I cancel my credit card I don’t use?

It may be tempting to cancel a credit card you don’t use. Prior to canceling any credit cards, however, you should carefully weigh any potential benefits against any disadvantages you may face.

As previously discussed, canceling a credit card can negatively impact your credit score. Canceling your card could affect the length of your credit history, especially if it is a card you’ve had for some time. Since your credit history accounts for 15 percent of your FICO score, this could effectively lower your current credit score.

Canceling a credit card that you don’t use can also impact your credit utilization ratio. When you cancel a card you don’t use, this decreases some of the credit available to you. This can increase the percentage of credit you’re using versus the amount of credit you have available, negatively impacting your credit utilization ratio.

For example, let’s assume you are using $1,000 in credit while you have $10,000 in available credit available across 2 different cards. In this case, your credit utilization is 10 percent. However, let’s also assume you don’t use one of the cards, so you decide to close the account. The card you closed offers $5,000 in available credit, decreasing the total amount of credit you now have available to $5,000. In this case, you’ve closed your card but doubled your credit utilization to 20 percent — which could have a negative impact on your credit score.

Credit scores aren’t the only thing to consider when deciding whether or not to close a credit card. If you aren’t using a credit card, chances are good that you aren’t monitoring the card’s usage that closely. This means you could easily miss any fraudulent charges or activity made on the card.

How to cancel a credit card you don’t use

After considering the pros and cons of canceling an unused card, you may decide now is the time to close it. Follow these steps to close your card the right way:

1. Pay off your balance: Be sure to pay off your balance prior to closing your unused credit card. If you don’t, your issuer could raise the interest rate on your existing balance.
2. Use or transfer rewards: Try to use any rewards or cash back you’ve earned prior to closing your account. If possible, you might also request to transfer your rewards to another card that you use within the same card family.
3. Contact the issuer: When you’re ready, use the number on your card or statement to contact the card issuer. Confirm that you’ve paid off the balance, and ask them to close your account.
4. Check your credit report and final statement: After closing your account, make sure that any final statements you receive show a zero balance. You may also want to request a free credit report to ensure your account is being reported as closed.

How to keep your credit cards active without hurting your score

Although you may not use a credit card very often, keeping it active is actually quite easy. This can help you avoid the hassles and negative impacts that closing a card may have on your credit score.

If you don’t use the card because the interest rate is high, consider using it for smaller, predictable purchases each month — such as gas, your weekend coffee run or take out once a month. To keep a card active without having to remember to make small charges, set your card up to make recurring automatic payments — like a Netflix subscription or your utility bill.

The bottom line

Credit card inactivity will eventually result in your account being closed. A closed account can have a negative impact on your credit score, so consider keeping your cards open and active whenever possible.

When determining a card’s worth to your credit score’s bottom line, don’t forget to consider where the card falls in your credit history. Letting one of your oldest cards close due to inactivity can significantly curtail the length of your credit history, which has a negative effect on your credit score.

Maintaining at least a small amount of activity on each of your cards helps keep them active and open. It is easy to do and can have a positive impact on maintaining a good credit score.