What Happens if You Don’t Use Your Credit Card? | Credit Cards

You opened a credit card because it had a great introductory offer but stopped using it after you earned the reward. What happens next?

If you don’t use your credit card, the card issuer may close your account. You are also more susceptible to fraud if you aren’t vigilant about checking up on the inactive card, and fraudulent charges can affect your credit rating and finances.

While not much happens if you don’t use your credit card for a month, you shouldn’t let it sit idle indefinitely.

The most dangerous risk of not using a card is that you might also stop looking at your statements. Failing to monitor your account might leave you in the dark about fraudulent activity. With a card out of sight and mind, you could miss seeing a fraudulent charge until long after it occurs.

“You’re not going to be nearly as likely to stay on top of what’s happening,” says Chris Dlugozima, learning experience designer at GreenPath Financial Wellness, a nonprofit debt counseling service.

The longer you overlook the card, the more damaging fraudulent activity can become, says Teresa Baumann, associate financial planner with financial planning firm Syverson Strege.

The other risk of leaving a card inactive is the issuer might decide to close the account.

If you haven’t used a card for a long period, it generally will not hurt your credit score. However, if a lender notices your inactivity and decides to close the account, it can cause your score to slip. That’s because losing a source of credit can affect your credit utilization ratio – the percentage of your total available credit you’re using.

And if the card is one of your oldest, losing it can hurt the length of your credit history, which accounts for 15% of your FICO score. While an account closed in good standing can stay on your credit report and factor into your credit score for up to 10 years, it can bring down the average age of the accounts in your credit report and lower your credit score in the long term.

Another consequence of having an account closed is that you may lose any accumulated rewards, such as airline miles associated with the account.

In the past, issuers could charge credit card inactivity fees if you failed to use your card for a long period. However, the Federal Reserve banned this practice in 2010.

If the card has an annual fee, you will have to pay it regardless of whether you use the card.

There are no hard-and-fast industry rules or standards as to when – or even if – a lender will close your account after a period of inactivity. You shouldn’t be concerned about leaving your credit card unused for a month or so, but a longer period warrants reaching out to your issuer about its policy to avoid a surprise closure.

Dlugozima says he has owned credit cards that the issuer shut down after just six months or a year of inactivity. “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,” he says.

If you want to keep your card account active, it’s best to occasionally use the card and check your statements every month for fraudulent charges. The key is to strike a balance somewhere between using the card too little and using it too much.

One way to keep a card modestly active is to make a single, regular charge on the card. For example, Dlugozima suggests using the card to pay a monthly streaming service or cellphone bill.

“Set up some sort of automated charge on the cards you are not using,” he says. “In essence, what that’s doing is keeping that activity happening.”

Baumann recommends a similar approach to her clients. “Use one credit card for gas only and pay it in full each month,” she says.