What can I do with unused credit cards?

Unused Credit Cards: Handling and Risks

When credit cards are no longer in use, it’s crucial to take proactive steps to prevent potential risks and protect your financial well-being.

Risks of Inactive Credit Cards:

• Fraudulent activity: Unused cards with live accounts can become targets for unauthorized use.
• Unwanted charges: Balances left on inactive cards may accumulate charges, leading to disputes or damage to your credit score.
• Negative credit history: Closed accounts in poor standing can negatively impact your credit score.

Proper Handling of Unused Credit Cards:

To mitigate these risks, it’s essential to:

• Notify the Issuer: Always contact the credit card company and inform them of your intention to close the account.
• Confirm in Writing: Request written confirmation that the account has been closed.
• Zero Balance: Ensure your credit card balance is zero before closing the account. This prevents any potential charges or disputes that may arise later.
• Shred the Card: Once the account is closed, physically shred the credit card to prevent any unauthorized use.

Protecting Your Credit

By properly handling unused credit cards, you can protect your financial health and your credit history. Remember:

• Closed accounts remain on your credit report for 10 years. Ensure they are in good standing before closing them.
• Avoid canceling cards with long histories, as these contribute to the age of your credit.
• If you must close a card with a long history, consider transferring its balance to a card with a better interest rate.

Proactive Management

Proactive management of your credit cards is essential for maintaining a healthy financial life. By taking the necessary steps to handle unused cards correctly, you can safeguard your credit history and prevent unnecessary risks.