What Happens If You Don’t Use Your Credit Card?

What Happens If You Don’t Use Your Credit Card?

by | May 22, 2023

Credit cards can be a useful financial tool, making it easy to make purchases and help your credit. But, what happens if you don’t use your credit card for a long time?

In this blog, we explore what can happen if you don’t use your credit card and provide tips to help keep your account active and in good standing. We also discuss how neglecting your credit card can negatively impact your credit score, lead to fees and penalties, and even result in account closure.

So, if you’re curious about what happens when you don’t use your credit card and how to help avoid potential issues, keep reading.

Here’s What Happens If You Don’t Use Your Credit Card

Your credit card account may become inactive and eventually closed by the credit card company if you don’t use it. This inactivity may raise your credit utilization rate, leading to a negative impact on your credit score.

To prevent your credit card from becoming inactive or being closed, it’s advisable to use it from time to time and clear the outstanding balance completely. This approach not only keeps your account active but also helps you maintain a healthy credit score.

How Long Can You Go Without Using a Credit Card?

There is no specific time limit for not using a credit card. However, you should use it occasionally to avoid inactivity fees or having the account closed.

If you do not use the card for an extended period, it can lower your credit score by reducing your payment history and credit utilization rate. So, using your credit card once in a while and paying off the balance in full each month is recommended to maintain a positive payment history and credit utilization rate.

Do You Get Charged for Not Using a Credit Card?

In the past, credit card companies used to charge people for not using their credit cards. Nowadays, you won’t be charged an inactivity fee since this practice was banned in 2010 by the Federal Reserve.

However, you may still be charged annual and interest fees if you don’t pay off your balance in full each month. This is why reading your credit card agreement is important to understand what fees and charges may apply to your card.

Tips to Keep Your Credit Card Active

Keeping your credit card active can help you maintain a positive credit score, avoid inactivity fees and prevent your account from being closed. Here are tips to keep your credit card active:

  1. Use it for small purchases: Even if you don’t use your credit card frequently, using it occasionally for small purchases can keep your account active.
  2. Set up automatic payments: Setting up automatic payments for recurring bills or subscriptions can ensure that you’re using your credit card and paying off the balance on time each month.
  3. Monitor your account regularly: Checking your account regularly can help you catch fraudulent activity and fees or changes to your account.
  4. Use rewards and benefits: Many credit cards offer rewards and benefits, such as cashback or airline miles, for using your card. Using these card benefits can motivate you to use your card and keep your account active.
  5. Avoid carrying a balance: Carrying a balance on your credit card can lead to interest charges and debt, so paying off your balance in full each month is important. This can also help maintain a positive payment history and credit utilization rate.

Does Not Using a Credit Card Negatively Impact Your Credit Score?

Not using your credit card won’t harm your credit score. When you get a new credit card, your score may drop slightly because of the lender’s credit check, but this is usually temporary.

If your credit card issuer cancels your credit card due to inactivity, it can cause a temporary dip in your credit score since it drops your credit limit.

It’s recommended that you keep track of your credit report and scores to understand how opening a credit account affects your creditworthiness.

The Bottom Line

In short, not using your credit card can ding your credit score and the card can possibly be closed by your credit card issuer.

To help make sure your credit stays healthy and you’re on track to reach your credit goals, use MyScoreIQ credit monitoring service with real-time credit monitoring, credit reports, FICO® Scores, educational resources, and more.

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