Keeping Your Credit Cards Active

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Keeping Your Credit Cards Active

Have you ever heard the phrase "use it or lose it"? A lot of the time, to be honest, I don't know exactly what "it" is. I do know, however, that this maxim can apply to your credit cards. Leaving your credit cards unused can be potentially harmful to your credit health, and if your credit card issuer determines that your card has become "inactive," it may even close your account. Find out more below about how this can happen, why it matters and what you can do about it.

What is "active"?

It's no secret that card issuers profit from things like annual fees, interest charges, and other finance charges when consumers use their cards. Unused credit cards are also a potential liability if the account information ends up in the hands of identity thieves, which is another reason why issuers may close inactive credit cards. Keep in mind that you do not need to carry a balance to keep an account active - card issuers also make money through "swipe fees," so just using your card a few times a year can be enough to keep it open. The exact inactivity period is up to the card issuer, however, and the Equal Credit Opportunity Act does not require issuers to give you advance notice of accounts that are closed for inactivity.

Why does it matter?

An inactive account may harm your credit for a handful of reasons. After a few months of inactivity, your lender may stop providing updates to the credit bureau regarding your account. Continuing to use your open accounts is a great way to help keep your credit card utilization in a healthy range. If your card ends up closed, the total amount of credit available to you will be reduced, which could skew your credit card utilization rate upwards and cause your credit score to fall. Additionally, if you've had the card for a while, the closure could negatively impact the average age of your accounts. This could also potentially reduce your score.

What can I do?

Here are a few tactics for avoiding inactivity:

  • Think about setting up a small recurring subscription fee (like Netflix or Spotify) on the credit card you wish to keep open and active. You may even be able to link the card to your checking account so the bill is paid automatically. This will ensure that your card stays active without the need for much additional thought or effort. This trick is especially useful if you have older cards you don't use as much, whether it's because of a high APR or limited rewards program. As always, it's important to make sure you pay your bills on time, and then, if you'd like, you can leave the card somewhere you won't be tempted to use it, like your sock drawer.
  • If you carry the card around only for emergencies, you could make efforts to use it at least a few times a year anyway. Stay on top of your finances so you'll be able to notice when a card has fallen out of use. Then, every few months, you could use the card to buy a tank of gas or groceries. Use the card only to buy items you were going to buy anyway. Afterwards, you can pay the card off immediately so as not to accrue any interest.
  • Consider avoiding cash or debit cards when there are better benefits associated with using your credit card. You may be able to earn rewards like cash back and bonus points while ensuring that your cards stay active at the same time. Many credit cards even have extra built-in protections, like trip insurance or extended warranties, so it's good practice to plan your purchases ahead of time and take full advantage of friendly terms.
  • Choose carefully. When opening a new credit card account, be sure it's one you'll actually get some use out of. If you don't see yourself using the card at least once per year, you might not need the card at all.

Bottom Line

Whether it is left open or closed by your lender, letting a credit card become inactive could negatively affect your credit score. Since your credit score can affect everything from your insurance rates to your apartment search, it's usually worthwhile to keep your accounts active so they're available when you need them. Stay a step ahead of the old maxim and use your cards now so you don't end up losing them later.

About the Author: Kayleigh Gaddor is the Community Manager at Credit Karma. Not content to stay in one place too long, she's most recently traveled to Hong Kong, Scandinavia and Hawaii. An avid reader and proud introvert, Kayleigh can usually be found with her head buried in her Kindle.

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Be careful when using a credit repair service. All disputes that are claimed will show up on your credit report and that scares lenders. I recently used Lexington Law for credit repair and went to my bank and the loan officer asked me why am I disputing all my credit? He went on and asked why am I disputing credit that has been paid perfectly. That's right Lexington Law even disputed my good credit. I had to admit that Lexington Law was helping me improve my credit and they were over zelious. He told me that was a red flag for creditors. I was approved but had a lot of explaining to do. I called Lexington Law and they denied challenging my good credit and I am certain they did because I saw the credit report at my bank. I decided that Lexington Law was creating more problems than helping so I closed my account for credit repair. Perhaps they should call it credit disrepair.

Credit Karma Team
Top Contributor
2949 Contributions
4604 People Helped
Helpful to 71 out of 78 people

Thanks for sharing your experiences. 

Reply by
curlygirljaime

1 Contribution
49 People Helped
Helpful to 49 out of 77 people

Really?? Lexington law and obtaining new credit brought my credit score up 150 pts in 12 mos. i reccomend them to everyone!! loved their service.

Reply by
WilliamsD717

1 Contribution
25 People Helped
Helpful to 25 out of 27 people

The same thing happened to me !!

Top Contributor

Reply by
eddie1261

25 Contributions
258 People Helped
Helpful to 2 out of 2 people

Even better, DON'T use a credit repair service. All they do is pull your report, write letters on your behalf, and reportif anything is inaccurate. Let'sjust say everything IS accurate and you have just overextended and thus missed payments? Those repair places, who will charge you starting at $99, do nothing that you can't do yourself. Write letters to everybody you are past due with and ask for a verification of debt. Once you have that, you write to every one of them requesting a payment plan. Often they will include a settlement amount.

My personal; example is a store credit card that was issued through a company I will not name but WILL say that it was the opposite of National Express...... I owed them $10,000. When I was making payments, I realized that every $300 I paid them saw about $95 go to principle and the rest to interest, as it is compounded as a percentage of the amount owed. I then lost my job and went into default. They then sued me. As a settlement, the account went to a local law firm who specialized in acting as trustee in these cases. We set up a payment plan of $300 a month, but at only 3% interest, so of that $300, about $290 of it went to the principle. I paid that ting down MUCH faster that way. Now, that cost me a judgement that will be on my credit report until 2019, but  I would have had a negative entry anyway,m and I would still be paying that off with 24.99% interest had it not gone that way. I am not suggesting that you do that, but I AM suggesting that you explore all avenues to pay things off faster. Start wit the smallest account and get it out of the way. Then the next, and the next and the next. Before you know it, you will be out of debt. It is especially important that you do thisone thing.

Make a plan, and stick to it. It might mean you don't buuy the new car for 3 more years, of wait another year to replace the 50" flat screen with the 75", but it is really important to get out of debt and start improving your credit score.

I tried to buy windows for my house in Jan 2014. I was denied credit because my score was 560. I bought a car in Nov 2015 and my score was 711. In 22 months, with a little discipline anf a lot of focus (and some sacrifice, all of which was temporary) I improved my score by 150 points. One by one the acoutns closed, and slowly I started getting small credfit cards (the 2st of which was secured with a $49 deposit). I used that first card for $25 a month, and paid it to $0 every month. After 5 months, I got another unsecured card with a $1000 limit. I spent $50 a month on it, for stuff like gas and groceries that I would have normally used my debit card for, and paid it to $0 every month. Then I got a 3rd, with a $2000 limit. Again, $50 a month spent, paid to $0 every month.

As I sit heretoday, I now have $21,500 in available credit, and my usage stays below 5%. That is HUGE. Keep your useage about 10%, and pay it off every month. Showing the credit bureaus responsible activity is what matters, not how much money you spend.

You can do it. If I can, you can.

Reply by
Jbrannock

1 Contribution
0 People Helped

Lexington Law and Creditrepair.com don't know what they're doing. They're actually part owned by TransUnion. Call Empowerment Financial Group, triangleefg to get professional help raising your credit scores without tracks. 

3 Contributions
6 People Helped

Curlygirl and Williams must work for Lexington law, either that or they were paid for their input or you could be a competitor and trying to nail Lexington Law.  Can't trust anyone on the net these days, even me, but don't worry, you can trust me, can't you?

Reply by
crazycam

1 Contribution
0 People Helped

Sorry to hear that. I must say, I tried the same thing many, many years ago and I gather from what I read that things haven't changed. The Law firms are not there to help but damage your good name even more with trying to repair crdit reports.

Please, everyone......there is "NO" quick fix to repairing your credit report. If you are using a Law firm, stop now and try to get your hard earning money back or just stop your commitment with them. Good luck.

Reply by
LilaDavidson

2 Contributions
2 People Helped

I agree.  Lexington credit did not help but only made it more dificult to repair my credit, but cost me $99 per month for 6 months to do what I could have done better myself.

1 Contribution
56 People Helped

Helpful to 56 out of 59 people

Credit scores favor keeping you in debt: 1 - closing an account=bad, 2,using a balance tranfer 0 interest deal to keep another card from hosing you on interest =bad, 3,taking advantage of a new card offer and opening a new account=bad, 4 paying off an installment loan early and closing the account=bad, 5 applying for a loan that would give you a lower interest rate=bad. these are not opinions but FACTS.  If credit scores had the actual consumers best interest in mind, payment history would be the ONLY thing tracked, quite simply - the ability to repay.  the rest is a sham by large banks and co operative efforts to keep your head just under water while having you thrashing like mad to keep every penny you earn going to retailers and especially credit card interest!  I pay cash for EVERYTHING!  if i cant pay for it right away, or save up to buy it, i dont need it. PERIOD- that includes cars , boats etc....  put money in an interest bearing fund or account and save for it.  use cards for cash rewards and never ever run a balance.  I used to finance items to "build Credit".  now i just use some cards for cash rewards so my car insurance and health insurance stay low.  Credit scoring is the biggest numbers racket since the mob in the 1920's - but its "legal" lmao!

Reply by
Padam7

2 Contributions
1 Person Helped
Helpful to 1 out of 1 people

I have said that all along.  Now I find myself playing the game because you can't even rent an apartment if you have a low score.  Tomorrow, I am homeless.  I will be living in my van because I don't want to use a card, people can come after you for bills they make up in their heads, and not only once, but they raise the price and come at you again 4-5 years later when they think it will fall off your credit score.  You don't even get to go to court to defend yourself.  Then you have to ask someone who you don't see or know or can even talk to in person to fix the problem.  of course they are going to side with a company.  It is in their best interest to do that.

4 Contributions
56 People Helped

Helpful to 56 out of 61 people

My credit scores have kept bouncing up and down, always staying in the 700-740 range, for 3 years or so.  I don't do anything any differently - I pay my b[lls on time and don'r run high balances.  I can't be worrying about something beyond my control - it would drive me insane.

Credit Karma Team
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2949 Contributions
4604 People Helped
Helpful to 18 out of 27 people

Hi dawg1963,

No reason to stress over it! 

Reply by
TriciaRose17

1 Contribution
2 People Helped
Helpful to 2 out of 2 people

Depends on when the credit is pulled and how much is on the credit card to be paid even if you pay it off every month.  Impossible to have perfect credit that way.  Good luck.

1 Contribution
88 People Helped

Helpful to 88 out of 104 people

Who cares if closing an account "affects" your credit score.  The goal here is to get OUT OF DEBT!  Not worship at the altar of the FICO score...

Credit Karma Team
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2949 Contributions
4604 People Helped
Helpful to 33 out of 40 people

Hi sweau,

While wanting to stay out of debt is a fantastic plan, a consumer in the process of obtaining a mortgage might be dismayed to see their score drop. Everyone has a unique situation, so it's important to be aware of how certain decisions could potentialy affect a score. 

Reply by
rainy1221

1 Contribution
15 People Helped
Helpful to 15 out of 22 people

I agree! And any time I've applied for a car loan they ALWAYS use my FICO score. Not once has a lender said your Equifax or Transunion score is good, bad or average or used it for the basis of the loan rate. So whats the point of them?

Reply by
Diogeneia

2 Contributions
51 People Helped
Helpful to 50 out of 53 people

Personally, I think that a person with a good income from a stable job (I know, I know... it's America...)  and no debt should have a higher FICO score than a person with a half dozen credit card or loan balances.  Given the fact that the average person stays with the same employer  for only 3 - 5 years and is at RISK in this country of being laid off or "down-sized," this actually MAKES SENSE.

Credit is not handled the same way in other countries as it is here.  Only in the U.S.  are we forced to maintain debt in order to have the privilege of a home (nevermind a car!).  

Reply by
Katsuo

1 Contribution
1 Person Helped
Helpful to 1 out of 1 people

Having a credit card account doesn't mean you're in debt.  It just means you have a loan available to you.  Better yet, it's a loan that charges you no interest if you pay it off within ~1 month(or for credit cards like blispay, 6 months for >$199 purchases). 

The problem isn't having debt available to you, it's using your credit cards responsibly so when you need to take on some debt(buying a house, buying a car, medical emergency, etc...) you can do so at the lowest possible interest rate. 

If you pay off your entire credit card balance each month, you pay no interest, get a free 30-day loan on the things you buy, and build up your credit score.  How is that a bad thing?  Just don't buy what you can't afford. 

I have many credit cards, with various bonuses and cash-back offers attached to them.  But, I don't run up all the balances and make minimum payments.  I pay them off every month, and actually earn money through the bonus programs.  Credit cards can actually be profitable for the smart consumer, believe it or not. So, you could be earning $1,000 per year from credit card rewards(cashback, free hotel stays, airline points), while improving your credit score, and paying the banks nothing.  That seems like a good deal to me.

Reply by
bobalew

2 Contributions
1 Person Helped
Helpful to 0 out of 1 people

exactly, stop worshipping the great fico put them in their place put them out of business

1 Contribution
39 People Helped

Helpful to 39 out of 43 people

My score dropped 12 points last month.Why,because i had a credit line of $3,000.00 for a sleep number credit card.

Also a $3,500.00 for a Wolfs Furniture credit card.Thes accounts were closed by the lender.

Lets be honest,how often do you go out and buy a sleep number bed.Or a major furniture purchase.

Reply by
iowamoon

1 Contribution
12 People Helped
Helpful to 12 out of 12 people

Good to know. I was considering  a sleep number account. Now I will just buy it outright with my tax return.

Reply by
BiterSweet

1 Contribution
8 People Helped
Helpful to 8 out of 9 people

LOL.. yep... They will get you one way or the other... It’s a bitter sweet  situation.  

1 Contribution
83 People Helped

Helpful to 83 out of 105 people

I have an account that goes back to 2005 that I havnt used and it is listed as open, what should I do with it?  Close it or buy something and pay it off?  It is a Speigel account, I actually didnt remember having it

Credit Karma Team
Top Contributor
2949 Contributions
4604 People Helped
Helpful to 120 out of 160 people

If you don't want to keep the account open, or are being charged annual fees, you may want to consider closing the account. However, closing the account could affect your score. Only you can decide what you should do, based on your personal finance situation.  Read this article for more information: https://www.creditkarma.com/article/closing-accounts-credit-effects

Reply by
mfellion

9 Contributions
435 People Helped
Helpful to 110 out of 153 people

the credit score is a scam anyway.  Take hard credit enquiries.  If you are looking for a morgage and ask around they knock down your score thereby driving up your rate.  They do the same thing on these old inactive credit cards.  I suggest just leaving it open, make sure the card is not floating around, tear it up, and leave things as is.  Your score is actually helped in the scam by leaving it open as it drives the utilization rate down upping the score. 

Reply by
mslilad

2 Contributions
44 People Helped
Helpful to 42 out of 43 people

Buy something small and pay it right off.. The older your credit the better. Seriously

Reply by
litlbilly

2 Contributions
0 People Helped

It is actually a good thing to have lots of old accounts.  your cc score goes up the higher number of accounts.  I learned that the hard way by removing an old account.  turned out, it was a good account and my score went down.

Reply by
ntorres1986

5 Contributions
9 People Helped

the longer the accoiunt the better

Top Contributor
17 Contributions
135 People Helped

Helpful to 42 out of 48 people

It seems odd to me that using all your credit cards actually can make your score go up. My scores recently went up by over 30 points simply by using an older card that had been a zero balance for almost a year. You would think that using more credit cards would be a negative thing because it might hurt your utilization and could you could potentially forget to pay that card because you haven't used it in so long. Yet another mystery of the credit score algorithm.

Credit Karma Team
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2949 Contributions
4604 People Helped
Helpful to 16 out of 30 people

Yes, it can be a little confusing! 

Reply by
mfellion

9 Contributions
435 People Helped
Helpful to 32 out of 45 people

The credit score is a scam.  Your score went up as the computer program they use saw more on time payments.  Just make sure the utlitilization rete is very low , like 2 percent of the total credit.  Never miss a payment as that is death to your score. 

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Reply by
cmc304

23 Contributions
279 People Helped
Helpful to 40 out of 49 people

It's a ridiculous rule to be penalized on your score for closing any account.   Like the government, "they" decide how we should handle our money so they a business can score us.  Ridiculous when you think about it.  Congress can't balance a budget and we have the worst debt ever!   Leave the account open, shred the card and hope some hacker guru doesn't gt the info off the internet somehow. 

Reply by
mdb007

4 Contributions
11 People Helped

 This year we bought windows for our home through and installer and the credit went through wells fargo who issues use some kind of credit card which we will never use. We get 4 years interest free to pay it off. As soon as I signed of on the job and we recieved a payment notice our Fico dropped 35 points from excellent to good. The credit was approved back in january but due to the bad weather we didn't get the job finished until april so it is all a mystery.

Reply by
ntorres1986

5 Contributions
9 People Helped

it just shows resposibllity 

1 Contribution
24 People Helped

Helpful to 24 out of 26 people

I have taken this info to heart about 5 years ago.  It has worked very well.  I have gone from 500 to 765 in that time.  I would rocommed this way to any one who can get a card and controll their use of it

Credit Karma Team
Top Contributor
2949 Contributions
4604 People Helped
Helpful to 13 out of 15 people

Thank you for sharing! Glad to hear you have made such great strides improving your credit. 

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Reply by
njmack61

11 Contributions
91 People Helped
Helpful to 16 out of 20 people

Enter Your Replynot me credit karma ask me to replace a credit card with one that i have closed so i did just last week & my credit score went down big time from 729 to 6 something now it say poor instead of good i can't get over this when thay are the ones that are telling you to open it that it's a good deal for you

1 Contribution
36 People Helped

Helpful to 36 out of 53 people

What if this is a utility account that you no longer use or need.. This account has been inactive for a while at a zero balance. Should I close the account would it help me of hurt me.

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Reply by
CKCharmaine

512 Contributions
1065 People Helped
Helpful to 21 out of 35 people

Hi Newtothis22, it depends on your personal financial situation, so we can't exactly say if closing this utility account will help or hurt your credit. But you can read these articles to learn about the potential effects of closing accounts in general:

https://www.creditkarma.com/article/ClosingOldAccount

https://www.creditkarma.com/article/closing-accounts-credit-effects

Reply by
Newport89

3 Contributions
33 People Helped
Helpful to 30 out of 39 people

Well in the article it states a number of reasons why an account being closed has a negative impact on your credit score. 

"After a few months of inactivity, your lender may stop providing updates to the credit bureau regarding your account. Continuing to use your open accounts is a great way to help keep your credit card utilization in a healthy range. If your card ends up closed, the total amount of credit available to you will be reduced, which could skew your credit card utilization rate upwards and cause your credit score to fall. Additionally, if you've had the card for a while, the closure could negatively impact the average age of your accounts. This could also potentially reduce your score."

I would assume this would apply to any type of an account, even a utility account.

1 Contribution
22 People Helped

Helpful to 22 out of 31 people

Is the "average age of your account"  which is a measure of your credit score calculation based on all your open accounts, OR, on all your open and closed accounts that are on your credit card report?

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Reply by
CKCharmaine

512 Contributions
1065 People Helped
Helpful to 36 out of 43 people

Hi chaseciti12345, the average age of account history only factors in your open accounts.

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