Open Unused Credit Cards - Close Them or Use Them?


Is that inactive credit card hurting your credit? Will the credit card company close your account?

Spare Card

Many people have a spare credit card that rarely gets used. These cards come to the rescue when a card holder reaches a daily spending limit on a debit card or has an unusually large purchase or spends more for the holidays. Otherwise, these back up credit cards stay put in the back of a purse or wallet.

Will the Credit Card Company Close the Account?

It is unlikely that the card issuer will close your account. However, if your card goes unused for six months or more, the credit card company could close your account. Your open, unused account poses a possibility of risk to the card issuer; an unused card could be a forgotten card and could be used by someone other than the card holder. And the credit card company incurs a small expense for maintaining your account.

Pay off your credit card debt in full each month? Fantastic! But not for your credit card company. The credit card industry has a term for you: deadbeat. The credit card company is not making any money off of you. In fact, your zero balance or inactive account is costing the credit card company - if only pennies. The card issuer has a cost, however minimal, to maintain your account, even with the fees it collects from vendors every time you use your card. If you pay off your balance each month, you are not paying interest on that balance, and credit card companies would prefer to collect that interest.

In these troublesome economic times, some credit card companies might opt to close inactive accounts rather than keep your risky inactive account open - if only to end their maintenance costs.

Good for Your Credit?

Having a credit card that only occasionally gets used is good for your credit - provided that you use it every few months and pay off the balance with each bill. Keeping a credit card in your purse or wallet for months or even years before it sees a card swiper isn't necessarily bad for your credit score, but it isn't doing you any good, either.

Open and Active, If Only Occasionally

So, keep your inactive credit card account open to maintain a steady, positive credit history on the account - but make it a little more active. You will avoid having your account closed out of the blue. You will help your credit rating with a small department store purchase every few months on your back up card. And be sure to pay off the balance when you get the bill.

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