Do credit cards get closed if you don't use them?

Inactive Credit Cards: Risks andConsequences of Non-Use

Credit cards offer convenience and financial flexibility, but they can also pose risks if left neglected. Inactive credit cards are particularly vulnerable to closure by issuers, and failing to use or monitor them can have significant consequences.

Closure of Inactive Credit Cards

Credit card issuers routinely review account activity to assess cardholder behavior and risk. Accounts that have remained inactive for extended periods are often seen as dormant and may be closed without notice. This is done primarily to reduce the risk of fraud and unauthorized use.

Consequences of Closure

The closure of an inactive credit card can have a negative impact on your credit score and financial standing:

• Reduction of Available Credit: The closure of a credit card reduces your total available credit, which can hurt your credit utilization ratio. A high credit utilization ratio indicates that you are using a large portion of your available credit, which can lower your credit score.
• Loss of Credit History: When a credit card is closed, its payment history is removed from your credit report. This can reduce the length of your credit history, which is an important factor in determining your credit score.
• Damage to Credit Profile: The closure of a credit card can be a negative mark on your credit report, indicating that you may not be managing credit responsibly.

Additional Risks of Inactivity

Beyond the threat of closure, inactive credit cards pose other risks:

• Increased Fraud Risk: Inactive cards are more vulnerable to fraud, as they are less likely to be monitored for unauthorized transactions. If your card is stolen or compromised, you may not be aware of it until it’s too late.
• Potential Dormant Fees: Some credit card issuers may charge a dormant fee or inactivity fee for accounts that have not been used for a certain period. These fees can add up over time, especially if you have multiple inactive cards.

Recommendations

To avoid the risks associated with inactive credit cards, it’s important to:

• Use Your Cards Regularly: Make small purchases or pay bills with your credit cards to keep them active. Even a small transaction every few months can be enough to prevent closure.
• Monitor Your Accounts: Regularly check your credit card statements for any unauthorized activity. Set up alerts or notifications to be informed of any suspicious transactions.
• Freeze Unused Cards: If you have a credit card that you don’t plan on using, consider freezing it to prevent unauthorized access.
• Close Unused Accounts: If you have inactive credit cards that you no longer need, consider closing them. This will help reduce your risk of fraud and protect your credit profile.

By following these recommendations, you can keep your credit cards active and avoid the negative consequences of inactivity. Inactive credit cards can pose risks, but by staying vigilant and taking proactive steps, you can minimize these risks and protect your financial well-being.