What can I do with my credit card I don't use anymore?

Managing Inactive Credit Cards: A Guide to Avoiding Fees and Maintaining Credit

Unused credit cards can pose a financial risk, as they can accumulate fees that can chip away at your savings. It’s important to take proactive steps to manage your inactive credit cards to prevent these unwanted charges.

Contact the Issuing Bank for a Fee Waiver

The first step you should take is to contact the issuing bank and inquire about the possibility of a fee waiver. Explain your situation and request a waiver for any existing or upcoming fees. Some banks may be willing to accommodate your request, especially if you have been a loyal customer.

Pay Off the Balance and Close the Account

If the bank is unable to grant a fee waiver, you have two primary options: paying off the balance and closing the account, or letting the account remain inactive.

If you have the financial means to do so, it’s advisable to pay off the balance in full. This will eliminate any potential interest charges and protect your credit score from being negatively impacted by missed payments. Once the balance is paid off, you can call the bank to close the account permanently.

Maintaining Inactive Accounts

If paying off the balance is not a viable option, you can consider leaving the account inactive. However, it’s crucial to be aware of the potential impact on your credit history.

• Credit Utilization: Keeping an inactive account open will affect your credit utilization ratio, which is the percentage of available credit you’re using. Having a high credit utilization can lower your credit score.
• Account Age: The length of your credit history is a significant factor in determining your credit score. Closing an inactive account will shorten the average age of your accounts, which could have a negative impact on your score.

Therefore, if you choose to leave the account inactive, it’s important to make occasional small purchases (like a monthly subscription) and pay off the balance in full each month. This will keep the account active and help maintain your credit history.

Other Considerations

• Authorized Users: If you have authorized users on the account, closing it will also affect their credit history.
• Credit Alerts: Set up credit alerts to monitor the inactive account for any unauthorized activity.
• Identity Theft: If you have reason to believe your account information has been compromised, close the account immediately to prevent fraudulent charges.

Remember, managing your inactive credit cards is essential to protecting your financial well-being and maintaining a strong credit score. By following these steps, you can avoid unnecessary fees and ensure that your credit history remains intact.