What happens if you don’t use your credit card?

Depending on your financial situation, you may have more than one credit card. And sometimes, one of those cards may become less useful over time. You may wonder: Is it bad to not use a credit card? It depends on your situation and goals. 

Learn more about what happens if you don’t use your credit card, plus what to consider before closing an inactive credit card account.

What you’ll learn:

• If you don’t use your card, your credit card company may lower your credit limit or close your account due to inactivity. 

• Closing a credit card account can affect your credit scores by decreasing your available credit and increasing your credit utilization ratio. 

• Not monitoring an open credit card account could cause you to miss potentially fraudulent activity or recurring charges you may want to keep up with.

• You won’t be charged a fee for not using your credit card. Inactivity fees were banned in 2010.

If you don’t use your credit card for a significant period of time, your credit card issuer may close your account due to inactivity or reduce your credit limit, both of which could affect your credit scores.

There’s no industry standard for how long you can leave a credit card unused before the issuer takes action. But it could be anywhere from a few months to a year.

You won’t be charged for credit card inactivity. Credit card inactivity fees, also called dormancy fees, used to apply to inactive accounts. However, these charges were banned in 2010 as an amendment to the Truth in Lending Act (TILA).

It depends. Closing a credit card account can affect your credit scores and give you access to less credit, so you may want to consider whether it’s worth it. 

If you find yourself not using the card or not monitoring its statements regularly, it can be more difficult to keep track of potentially fraudulent transactions or recurring charges.

If you decide to cancel a credit card, here are some tips:

• Pay it off. If you don’t pay off the balance before closing the card, your credit card issuer may raise the interest rate on the balance remaining on the card.

• Use your rewards. If you’ve earned travel or cash back rewards, try to take advantage of them before closing the credit card.

• Verify the account is closed. Check your credit reports to make sure it shows that the account has been successfully closed.

Using credit responsibly can help you build credit. But if your credit card is closed due to inactivity or you close it yourself, it could impact your credit scores in the following ways: 

• By increasing your credit utilization ratio: Your credit utilization ratio measures how much of your credit you’re using compared to your available credit. The Consumer Financial Protection Bureau (CFPB) recommends keeping your credit utilization ratio below 30%. Closing a credit card account could lower your total available credit and raise your credit utilization ratio.

• By reducing your length of credit history: The length of your credit history is determined by how long your credit accounts have been open. So canceling a credit card could affect the average age of your accounts. 

• By affecting your credit mix: Your credit mix has to do with the types of installment and revolving credit accounts you have. If you close a credit card account and it’s your only type of revolving credit, your credit mix could be negatively affected. 

These are just some factors that credit-scoring companies FICO® and VantageScore® consider when calculating your credit scores.

If you want to keep your credit card account active, you could use it to make small purchases or pay for a subscription service and then pay off the balance each month. You can even set up autopay for the card so you won’t need to worry about missing a payment. 

Consistent positive payment activity like this will usually be reported to the credit bureaus each month. And that can help your credit scores.

If your card has an annual fee but you’re worried that closing your account could affect your credit, you could ask your credit card issuer to upgrade or downgrade the account. That could let you swap your current credit card for one you may use more frequently—and it usually doesn’t affect your credit scores.

Credit card inactivity could negatively affect your credit scores, but you can evaluate your cards and make a plan for how to keep them active if you decide to keep the accounts open.

Understanding your credit scores before closing an account can help you manage the impact on your credit reports. With CreditWise from Capital One, you can monitor your credit health for free—and it won’t hurt your credit scores. You can also see how certain financial decisions—like forgetting to pay a bill—could affect your credit with the CreditWise Simulator.

CreditWise is free and available to everyone—even if you’re not a Capital One cardholder.