Does Anything Happen If I Don’t Use My Credit Card?

Not using a credit card can have indirect implications for your financial health. While direct penalties for inactivity are uncommon, it can affect your credit score and potentially lead to account closure by the issuer.

How Inactivity Affects Your Credit Score

Not using a credit card does not inherently damage a credit score. However, if the issuer closes an inactive account, two primary credit score factors can be affected: credit utilization and the average age of accounts.

Credit utilization represents the amount of revolving credit in use compared to total available credit. It is calculated by dividing your total credit card balances by your total credit limits. If a card, especially one with a high limit, is closed, total available credit decreases. This can increase your credit utilization ratio on remaining cards if balances are carried, potentially lowering your score. Lenders prefer a credit utilization ratio below 30%.

The average age of accounts is another important credit score factor, typically making up about 15% of a FICO score. This factor considers the average length of time all your credit accounts have been open. Older accounts contribute positively to a longer credit history, viewed favorably by lenders. If an old, unused credit card is closed, it can shorten the overall average age of your credit history, potentially impacting your score.

Potential Fees and Account Closure

Credit card issuers have policies regarding inactive accounts, which can lead to account closure. While inactivity fees were common in the past, regulations largely prohibited them. The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 banned credit card inactivity fees for most consumer credit cards. This means you generally will not be charged simply for not using your card. However, it is always prudent to review your specific cardholder agreement for any unique terms that might apply to certain specialized or store cards.

Credit card companies commonly close accounts that show no activity over an extended period. The timeframe for inactivity that triggers closure varies among issuers, typically ranging from six months to two years. Issuers may close these accounts to reduce administrative costs, manage potential risk, or because the account is not generating revenue from transactions or interest.

Some issuers might provide a warning or notification before closing an account due to inactivity, but they are not legally obligated to do so.

Maintaining Your Account Activity

Maintaining activity on a credit card does not require frequent or large purchases. Simple, occasional transactions can be enough to keep an account open and active. Consider making a small purchase, such as a streaming service subscription, a tank of gas, or a single cup of coffee, every few months. These minor transactions demonstrate consistent use without encouraging overspending.

Another effective strategy involves setting up a small, recurring bill, like a utility bill or a monthly subscription service, to be paid automatically with the credit card. To avoid incurring interest charges, ensure an automatic payment is also set up from your checking account to pay the credit card balance in full each month. This method ensures regular activity while promoting responsible financial habits.

You can also use the card for expenses that are already part of your budget and would otherwise be paid with cash or a debit card. The aim is to generate activity, not to accumulate debt, so paying the full statement balance on time every month is important. Regularly checking statements for all your credit cards, even those used infrequently, is also advisable to monitor for any fraudulent activity or unexpected changes in terms. Responsible, minimal use is a sound approach to maintaining a healthy credit profile and avoiding potential account closure due to inactivity.