What to Do with Credit Cards You Don't Use

If you've accumulated a stash of unused credit cards, it's time to take action and free up some space in your wallet.

Cutting up old credit cards can be a good option, but be aware that this doesn't cancel the account, and you may still receive statements and collection notices.

Consider cancelling unused credit cards to avoid unnecessary fees and potential identity theft risks.

You can also consider downgrading or upgrading to a more suitable credit card, depending on your current needs and preferences.

If you don't use your credit card for a significant period of time, your credit card issuer may close your account due to inactivity. This could hurt your credit scores.

Your credit card issuer may also reduce your credit limit, which could affect your credit scores. I've seen it happen to friends who haven't used their cards in a while.

Credit card inactivity could have negative effects on your credit scores, but you can take steps to keep your cards active. You can use your card to pay for a streaming subscription or your utilities bill.

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Setting up automatic payments can help you maintain the card and benefit your credit over time. It's a simple way to keep your credit card active without having to think about it.

If your credit card issuer does close your account or reduce your credit limit, you can call them and ask them to reconsider. It's worth a try, and it might save you some hassle in the long run.

You can also check your credit score regularly to stay on top of any account closures or changes to your credit limits. It's free through Experian.

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Closing an unused credit card can have some unintended consequences on your credit score. Closing a credit card account could lower your total available credit, which in turn would raise your credit utilization ratio, recommended to be below 30%.

Your credit history length may also be affected, as the length of your credit history is determined by how long your credit accounts have been open. Losing a long-standing credit account can reduce your overall credit "age".

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Your credit mix may also be negatively affected if you close a credit card account and it's your only type of revolving credit. This can hurt your credit score.

Here's a quick rundown of the potential effects of closing a credit card account on your credit score:

Your credit card account may be closed without notice if you don't use it for a period of time. The credit card company doesn't have to warn you before they reduce or remove your credit line.

There's no predefined time limit for inactivity that triggers an account closure, so it's hard to predict when this might happen. To be safe, assume any multi-month length of inactivity can lead to your account's deactivation or a credit limit decrease.

Your credit card company has the right to close your account or reduce your credit limit without notice, but you should still receive some communication detailing the updates to your account. This is a standard practice, and you can expect to hear from them eventually.

If your account is closed, it can trigger damage to your credit score, which is why it's generally a good idea to keep your credit card account open and relatively active.

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Closing an unused credit card can have a significant impact on your credit score, so it's essential to consider the consequences before making a decision.

Closing a credit card account can affect your credit scores and give you access to less credit, so you may want to think twice before closing an account.

If you close a credit card account, it can increase your credit utilization ratio, which measures how much of your credit you're using compared to your available credit. The Consumer Financial Protection Bureau recommends keeping your credit utilization ratio below 30%.

Closing a credit card account can also reduce the length of your credit history, which is determined by how long your credit accounts have been open.

Your credit mix, which refers to the types of installment and revolving credit accounts you have, can also be affected by closing a credit card account.

If you close a credit card account, it can stay on your credit report for up to 10 years, which may positively influence your credit score if it has positive information.

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Closing a credit card account can shorten your credit history length, increase your credit utilization rate, and affect your credit mix.

Here are some potential effects of closing a credit card account:

To minimize the impact of closing a credit card account, consider keeping the account open and relatively active by assigning a recurring, inexpensive charge, such as a streaming subscription or utility bill.

Closing a credit card account can have several negative effects on your credit score. Your credit history length may shorten, which can hurt your credit score. This is because a portion of your credit score is calculated based on the longevity of your credit.

Closing a credit card account can also increase your credit utilization rate, which is the percentage of available credit you're using. If you suddenly have less available credit, your credit utilization rate will likely increase, and that can hurt your credit scores. It's recommended to keep your credit utilization under 30%.

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Your credit mix may also be affected if you close a credit card account. Credit scores can benefit from having some variety in your credit mix, showing you can responsibly manage different types of accounts. If your credit card issuer closes the only revolving credit account you hold, it could dent your credit score.

Here are the specific ways closing a credit card account can affect your credit score:

It's worth considering whether closing a credit card account is worth the potential negative impact on your credit score.

Maintaining your credit card account is likely to benefit your credit score, whereas a closed account can trigger damage to your credit.

If you're paying an annual fee for a credit card you don't use, consider your options to eliminate that extra expense. You can call your card issuer to discuss a downgrade rather than closing the account.

Downgrading your credit card involves doing a "product change" to switch your current card to another card within the issuer's same "family" of cards but without the annual fee. This way, you can keep your credit card account open without the cost to maintain it.

Keeping your credit card account open and relatively active preserves the available credit and history components your card offers.

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Your credit card company can close your account or reduce your credit limit without warning if you don't use your card for a period of time.

There's no specific time limit for inactivity that triggers an account closure, so assume any multi-month length of inactivity can lead to your account's deactivation or a credit limit decrease.

You won't receive a notification before your credit limit is reduced or your account is closed, so it's essential to stay on top of your account activity.

Your card issuer has the right to reduce or remove your credit line without notice, but you should still receive some communication detailing the updates to your account.

Keep in mind that your credit score may be affected if your account is closed or your credit limit is reduced, so it's crucial to monitor your account activity and make informed decisions about your credit cards.