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How Often Should You Use a Credit Card to Keep It Open?

To keep a credit card active and avoid closure due to inactivity, aim to use it at least once every three to six months. Regular, small purchases will signal to the issuer that you intend to keep the account open and active, even if you primarily use other cards for everyday spending.

The Silent Killer: Inactivity and Credit Card Closures

We all have them – those credit cards we opened for a specific purpose, maybe a big purchase with 0% financing, or a travel rewards card we rarely use anymore. They sit in our wallets or drawers, seemingly harmless. But lurking beneath the plastic is a potential credit score torpedo: inactivity closure. Credit card issuers, like any business, want active accounts. Inactive accounts are a drag – they represent potential losses. Maintaining these accounts costs money (statements, security protocols, etc.), and if you’re not using the card, the issuer isn’t making any profit. That’s why they often close accounts that show no activity for extended periods.

Why Credit Card Closures Hurt

Closing a credit card might seem insignificant, but it can impact your credit score in several ways:

Reduced Available Credit: Your credit utilization ratio (the amount of credit you’re using compared to your total available credit) is a crucial factor in your credit score. Closing a card lowers your total available credit, potentially increasing your utilization ratio and negatively affecting your score.
Shorter Credit History: The length of your credit history is another factor. If the closed card was one of your older accounts, its removal from your credit report can shorten your credit history, which can also lower your score.
Impact on Credit Mix: A diverse mix of credit accounts (credit cards, loans, etc.) can positively influence your score. Closing a card reduces that diversity.

The Minimum Usage Rule: Keeping the Lights On

Fortunately, avoiding inactivity closure is relatively simple. The key is regular, albeit minimal, usage. As stated at the outset, using your credit card at least once every three to six months is generally sufficient. This single transaction signals to the issuer that the account is still in use and valued.

Strategic Spending: Making It Work for You

Don’t just use the card for the sake of using it. Be strategic. Here are a few ideas:

Automatic Payments: Link a small, recurring bill (like a streaming service subscription, a gym membership, or a mobile phone bill) to the card and set up automatic payments. This ensures consistent activity without requiring active management.
Small, Frequent Purchases: Use the card for small, everyday purchases like coffee, gas, or groceries. Pay off the balance immediately to avoid interest charges.
Gift Card Purchases: Buy a small gift card for a retailer you frequent. You can use it later, and it registers as activity on your credit card account.
Online Subscriptions: Use the card to pay for online subscriptions like newspapers or Cloud storage.

Monitoring Your Accounts: Staying Vigilant

Don’t assume your credit card is safe just because you used it once a year ago. Regularly monitor your credit card statements and online accounts. This allows you to:

Verify Activity: Confirm that your transactions are posting correctly and that the account is still open and in good standing.
Detect Fraud: Identify any unauthorized charges or suspicious activity promptly.
Stay Informed: Be aware of any changes to the card’s terms and conditions, including potential changes to inactivity policies.

Beyond Inactivity: Other Reasons for Closure

While inactivity is a common reason for credit card closure, it’s not the only one. Issuers can also close accounts for:

Payment Delinquency: Consistently missing payments or making late payments can lead to account closure.
Credit Score Decline: A significant drop in your credit score might prompt the issuer to reduce your credit line or close your account, especially if your initial approval was based on a high credit score.
Violation of Terms and Conditions: Violating the card’s terms and conditions, such as using the card for illegal activities, can result in immediate closure.
Issuer Business Decisions: Sometimes, issuers discontinue certain card products and close existing accounts. This is often beyond your control, but you’ll typically be notified in advance.

FAQs: Your Credit Card Inactivity Questions Answered

Here are 12 frequently asked questions to provide additional valuable information:

1. What Happens if My Credit Card is Closed Due to Inactivity?

Your credit card issuer will typically send you a notification before closing your account due to inactivity. If you receive this notice, you can simply make a small purchase to keep the account open. If the account is closed, it will eventually be reflected on your credit report.

2. Will a Closed Credit Card Disappear from My Credit Report Immediately?

No, a closed credit card will remain on your credit report for up to 10 years, assuming it was in good standing. Negative information, such as late payments, can stay on your report for up to seven years.

3. Does Requesting a Credit Limit Increase Count as Activity?

No, simply requesting a credit limit increase does not count as activity. You need to make a purchase or payment using the card to register as activity.

4. I Have Multiple Cards from the Same Issuer. Will Using One Keep All Active?

Generally, no. Each credit card is treated as a separate account. You need to use each card individually to keep it active.

5. Is There a Specific Minimum Amount I Need to Spend to Keep a Card Active?

No, there is no specific minimum amount. Even a small purchase, like a $1 coffee, is enough to register as activity. The important thing is the frequency of use, not the amount.

6. Can I Reactivate a Credit Card Closed Due to Inactivity?

It depends on the issuer. Some issuers might allow you to reactivate the card within a certain timeframe (e.g., a few months), while others might require you to apply for a new card.

7. Does Making a Payment on the Card Count as Activity?

Yes, making a payment on the card counts as activity, even if you haven’t made any purchases recently.

8. I Received a Notice of Closure. Can I Still Use the Card?

Typically, yes. You can use the card until the date specified in the closure notice. Making a purchase before that date will usually prevent the closure.

9. Should I Close Credit Cards I Don’t Use to Avoid Temptation?

Closing a credit card can negatively impact your credit score. Consider the impact on your credit utilization and the length of your credit history before closing any cards. If you are able to commit to responsible usage, a better solution is to continue to use the cards sparingly, and pay off the balance in full each month.

10. Are There Any Credit Cards That Don’t Close Due to Inactivity?

While rare, some credit cards may have policies that are more lenient regarding inactivity. However, it’s always best to assume that regular usage is required to keep the account open. Review your cardholder agreement for the most accurate information.

11. Does Adding an Authorized User Count as Activity?

Adding an authorized user does not count as activity for the primary cardholder. The authorized user’s purchases will contribute to the overall account balance, but the primary cardholder still needs to use the card directly to register activity.

12. How Can I Find Out the Inactivity Policy for My Specific Card?

The best way to find out the inactivity policy for your specific card is to review your cardholder agreement or contact your credit card issuer directly. Look for information related to account closure or terms of service.

Conclusion: Proactive Card Management

Maintaining active credit cards is a simple, yet essential, aspect of responsible credit management. By understanding the impact of inactivity and implementing a strategy for regular, minimal usage, you can protect your credit score and avoid the negative consequences of unnecessary account closures. Remember, a little proactive management goes a long way in preserving your financial health.