What Happens if I Don’t Use My Credit Card?

Quick Answer

If you don’t use your credit card, your card issuer can close or reduce your credit limit. Both actions have the potential to lower your credit score.

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If you stop using your credit card for new purchases, your card issuer can close or curb your credit line and impact your credit score. Your credit card may be closed or restricted for inactivity, both of which can hurt your credit score.

What to Expect When You Don't Use a Credit Card

You can expect your credit card company to (eventually) either close your credit card account or reduce your credit limit when you go without swiping for a period of time. How long is up to your card issuer, and they don't have to warn you before they reduce or remove your credit line.

Your Card May Be Closed or Limited for Inactivity

Without notice, your credit card company can reduce your credit limit or shut down your account when you don't use your card for a period of time. What period of time, you ask? There's no predefined time limit for inactivity that triggers an account closure. To be safe, assume any multi-month length of inactivity can lead to your account's deactivation or a credit limit decrease.

Keep in mind that the card issuer doesn't have to warn you before they reduce or remove your credit line. They have the right to do both without notice, but you should still receive some communication detailing the updates to your account.

Your Credit Score May Be Affected

You might shrug off your credit card issuer closing an account you weren't using anyway, but the move can be significant for your finances and shouldn't be ignored. Your credit score may suffer the effects of a closed credit card:

  • Your credit history length may shorten. A portion of your credit score is calculated based on the longevity of your credit. Losing a credit account, especially a long-standing one, can reduce your overall credit "age"—a factor that helps potential lenders decide whether or not you're a good risk.
  • Your credit utilization rate may rise. As the second-most important component of your credit score, your credit utilization reflects the percentage of available credit you're using. If you suddenly have less available credit because your card issuer closes your account, your credit utilization rate will likely increase, and that can hurt your credit scores. Keeping your credit utilization under 30% is recommended; those with top credit scores typically have utilization of 10% or lower.
  • Your credit mix may be affected. Your credit mix refers to the different types of credit you have on the books, including installment credit accounts such as car loans and personal loans, and revolving credit accounts, such as credit cards. Credit scores can benefit from having some variety in your credit mix because it shows you can responsibly manage different types of accounts. If your credit card issuer closes the only revolving credit account you hold, it could dent your credit score.

Should I Close a Credit Card I Don't Use?

To put it simply: probably not. Maintaining your credit card account is likely to benefit your credit score, whereas a closed account can trigger the aforementioned damage to your credit. By keeping your credit account open and relatively active, you can preserve the available credit and history components your card offers.

On the other hand, if you're paying an annual fee for a credit card you don't use, consider your options to eliminate that extra expense. Unless you earn enough returns through a rewards credit card to justify the annual fee, call your card issuer to discuss a downgrade rather than closing the account. Downgrading your credit card involves doing a "product change" to switch your current card (the one with the unjustifiable annual fees) to another card within the issuer's same "family" of cards but without the annual fee. This way, you can keep your credit card account open without the cost to maintain it.

What to Do With Your Unused Credit Card

When you don't use your credit card, your card issuer can take action that may hurt your credit. So, instead of closing your dust-gathering credit relics (or risk the issuer doing so), gather any seldom-used cards and assign a recurring, inexpensive charge. Use your card to pay for a streaming subscription or your utilities bill, then set up automatic payments to effortlessly maintain the card and benefit your credit over time. And, if you do encounter an account closure or limit decrease, don't fret—call your credit card company and request they reconsider.

Credit cards can have a positive impact on your financial health when used responsibly and with your credit score in mind. Check on your credit score regularly to stay on top of any account closures or changes to your credit limits (it's free through Experian).

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