How credit card inactivity affects your credit score


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A credit card can be a great financial tool to help you manage cash flow, earn rewards, and build credit.  However, what happens when you decide to curb your credit card spending?

Not using your credit card has some obvious benefits, the main one being that you won’t have a balance on your card. You may also reduce spending on one card so you can spend more on another card that has better rewards or a lower APR. Whatever your reason for not using your card, it’s important to understand what inactivity does to your account.

How long does it take for a credit card to become inactive?

Not using your card for a few weeks won’t cause your account to become inactive. For most card issuers inactivity doesn’t register until at least a year has passed. Here is a list of some of the major card issuers and their time frame for inactivity.

Card issuer Inactivity time frame
American Express No specific time frame is disclosed. If your account has been inactive for a “long period,” you will be contacted before any action is taken.
Capital One Around 12 months
Chase Around 12 months
Citi Around 24 months
Bank of America Around 24 months
Wells Fargo 3-5 years
Barclays No specific time frame is disclosed.

Do issuers close inactive credit card accounts?

The short answer is yes – it’s likely your credit card company will close an inactive account.  However it depends on the issuer, and most will offer options for reactivating a closed account. If your issuer has a grace period for reopening accounts, you may not be able to reopen it after this window. For example, American Express and Chase give you 30 days to reopen your account once it’s been closed. Other issuers, like Capital One, will permanently close inactive accounts. If your issuer allows account reactivation, you can start the process by calling them. You will need to verify that you are the account holder, so make sure you have your account details at hand.

How does an inactive credit card affect your credit score?

Payment history is the most important factor in your credit score, making up 35% of the total. However, the second most important factor is credit utilization, coming in at 30%. Credit utilization is determined by comparing the amount of credit you use to the amount of credit you have. In this way, credit utilization is directly linked to the activity on your accounts. If you never use your cards, your credit utilization rate will be zero. While zero may seem like the ideal goal for a utilization rate, according to FICO consumer affairs manager Barry Paperno, “The idea here is the lower, the better, in terms of the utilization percentage, but something is better than nothing.”

Your utilization rate is determined by looking at each individual card you have and all of your accounts as a whole. If you have one or two cards coming in at zero percent, you’re okay. However, if all of your accounts are inactive and coming in at zero, you may see your credit score lower by a few points. So what is the ideal percentage for your credit utilization? FICO spokesman Craig Watts says, “If your utilization is 10 percent or lower, you’re in great shape as far as utilization goes.”

Another factor in your credit score is your credit history, which makes up 15% of your total. If your account is closed due to inactivity, this part of your score will take a hit. The longer the account was open, the greater effect closing it will have on your credit history.

How can you keep your credit card active?

You can keep your account active by simply making a small purchase or two every few months. And if you’d prefer a more hands-off approach, another option is to use your card to make automatic payments for a bill.  If you’ve let your card become inactive because you are trying to avoid carrying a balance, just make sure that the purchases or payments you make can be paid off at the end of each billing cycle. This means you’ll keep your credit card active and keep your payment history in a good place.

When should you cancel a credit card?

While keeping a card open is usually the best option for maintaining your credit score, there are some circumstances when closing a card is the better choice. One reason would be having a card with an annual fee that no longer matches the value of the card. If this is your circumstance, you could check with your issuer to see if you can move your account to a card that doesn’t charge an annual fee. If that is not possible, closing the account may be your next step.

Another reason to let an account go would be if you have multiple cards and the inactive card simply doesn’t meet your needs anymore. Maybe the card no longer offers the same rewards points, or maybe your APR has gone up. It is likely that the inactive card will not be convenient to put back into your spending rotation, especially if you have other cards that you prefer to use.

The bottom line

Managing your credit card accounts is important. When an account becomes inactive, there are usually steps you can take to get the account back on track. If you feel you can use the card to make occasional purchases, it’s best to keep it open. This will keep your credit score in a stable place.