What Happens If You Get a Credit Card and Don’t Use It?

Obtaining a credit card offers financial flexibility, but sometimes these cards remain unused. While it might seem harmless to keep a credit card without actively using it, several implications can arise for your financial standing and credit profile. Understanding these nuances is important for effective credit management.

Impact on Your Credit Profile

An unused credit card can positively influence your credit profile, particularly regarding credit utilization and the average age of accounts. Keeping an account open increases your total available credit, which can lower your credit utilization ratio if you maintain low balances on other cards. A lower credit utilization ratio, generally below 30% of your total available credit, is viewed favorably by credit scoring models and can contribute positively to your credit score.

The length of your credit history also factors into your credit score, with older accounts typically having a more beneficial impact. An unused credit card, especially an older one, can continue to contribute to the average age of your accounts, demonstrating a long-standing credit history. However, inactivity can lead to the issuer closing the account. Such a closure can increase your credit utilization ratio by reducing total available credit and may shorten your average age of accounts, negatively affecting your credit score.

Financial Considerations and Account Status

Even if a credit card remains unused, financial considerations still apply. Some credit cards carry an annual fee, a recurring charge for holding the card regardless of use. These fees can accumulate over time if the card is left dormant. Review your cardholder agreement to identify any such fees.

While less common now, some credit cards historically imposed inactivity fees. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 generally made these fees illegal. Nevertheless, a credit card issuer may close an account due to prolonged inactivity. Issuers are not always required to provide notification before closure, so you might only learn of it after it has occurred.

Actions for Unused Credit Cards

To keep an unused credit card open, maintaining minimal activity can prevent issuer-initiated closure. Making small, infrequent purchases, such as a monthly streaming service subscription or a small online purchase, and paying the balance in full immediately, signals to the issuer that the card is active. Automating a small recurring charge can also ensure consistent activity.

Closing an unused credit card might be a reasonable option if it carries a high annual fee that outweighs benefits, or if managing too many credit lines becomes burdensome. Before closing any account, pay off any outstanding balance entirely, as an account cannot be formally closed with a balance. Ensure any recurring payments linked to the card are transferred to another account to avoid service interruptions or missed payments. For dormant cards, keep them in a secure location and regularly monitor statements for fraudulent activity, as unused cards can still be vulnerable to security breaches.