How Often Should I Use My Credit Card to Keep It Active?

Maintaining an active credit card is important for cardholders managing their finances. Understanding the requirements helps navigate varying financial institution policies. This knowledge can prevent unintended account closures and potential financial implications.

Understanding Card Activity

Credit card issuers define “activity” as any transaction initiated by the cardholder. This includes making a purchase, even for a very small amount. Examples range from buying groceries to paying for a streaming service. Other qualifying actions include making a payment toward a balance, initiating a balance transfer, or taking a cash advance.

While some financial institutions might consider actions like logging into an online account or mobile application as activity, actual transactions are more reliably recognized. Simply receiving monthly statements or holding the physical card in a wallet does not constitute account activity. The key element is a direct interaction with the card to initiate a financial movement.

Determining Usage Frequency

There is no universal rule dictating how often a credit card must be used to remain active, as policies vary significantly among issuers. Some financial institutions may consider an account inactive after a period of 6 to 12 months without use, while others might extend this timeframe to 24 months or even longer. The specific inactivity policy for a credit card is typically detailed within the cardholder agreement provided when the account is opened.

To ascertain the precise policy for a particular card, individuals can review their cardholder agreement, contact customer service, or check the issuer’s website. A common practice to ensure a card remains active and to avoid potential issues is to make a small purchase at least once every three to six months. This regular, minimal usage helps prevent an account from being flagged for inactivity.

Ramifications of Inactive Accounts

If a credit card account becomes inactive and is subsequently closed by the issuer, it can have several implications for the cardholder. One consequence relates to the credit utilization ratio, which is a component of credit scores. This ratio is calculated by dividing the total outstanding credit card balances by the total available credit. The closure of an account reduces the total available credit, which can cause the utilization ratio to increase if existing balances remain unchanged.

Another factor affected is the average age of accounts within a credit profile. If an older, long-standing account is closed, it may decrease the overall average age of all open accounts. This shift can have a minor impact on credit scores over time. Cardholders also risk forfeiting any accumulated rewards points, cash back, or other benefits if the account is closed due to inactivity.