What happens if I don't use credit card for a year?

Consequences of Extended Credit Card Inactivity

Credit cards are financial instruments that provide convenience and flexibility for making purchases. However, when a credit card remains unused for a prolonged period, it can have certain consequences, especially if the inactivity extends beyond a year. Here’s what can happen if you don’t use your credit card for a year:

1. Account Closure:

To manage inactive accounts and mitigate potential risks, banks may close credit card accounts that remain unused for an extended period, typically a year or longer. This closure may occur without prior notification. If the account is closed, you will no longer have access to the credit line and the card will be canceled.

2. Credit Score Impact:

Credit scores are influenced by various factors, including credit utilization and account activity. When a credit card account is closed due to inactivity, it can impact your credit score, especially if it was a long-standing account. Closed accounts may appear on your credit report for up to 10 years, depending on the credit bureau.

3. Loss of Rewards or Benefits:

Many credit cards offer rewards, benefits, or perks based on usage. If you don’t use your card for a year, you may lose out on these benefits, such as accumulated points, cashback rewards, or travel miles. Some cards may set expiration dates for accumulated rewards if they are not redeemed within a certain period.

4. Reopening Challenges:

If your credit card account is closed due to inactivity, reopening it may be challenging. Banks may require you to reapply and go through a credit check, which can impact your credit score. The approval process and terms for a new account may differ from your previous card.

5. Potential Fraud or Misuse:

Inactivity on a credit card can increase the risk of fraud or misuse. If your card remains inactive, it may become vulnerable to unauthorized transactions by fraudsters who may have obtained your card information. Monitoring your credit report regularly is essential to detect any suspicious activity.

Recommendation:

To avoid the consequences of extended credit card inactivity, it’s advisable to use your card regularly, even for small purchases. If you have multiple credit cards, consider rotating their usage to keep them active. If you don’t plan to use a particular card for an extended period, you can contact your bank to inquire about options for keeping the account open, such as setting a small recurring payment, like a subscription service, to maintain activity.