What happens if a credit card is not used for a long time?

The Silent Danger of Unused Credit Cards: More Than Just Dust Gathering

We live in a world of subscription services, digital wallets, and rotating reward programs. It’s easy to accumulate a stack of credit cards, some of which may fall into disuse. But while that forgotten plastic might seem harmlessly gathering dust in a drawer, prolonged credit card inactivity can expose you to a surprising array of risks that go far beyond late fees.

While it’s true that simply having an unused credit card doesn’t directly hurt your credit score, the inactivity can indirectly contribute to vulnerability. Out of sight, out of mind often translates to out of protection. Unmonitored accounts become attractive targets for fraudulent activity. Think of it like an unattended house – it’s more likely to be burglarized than one with regular activity and watchful neighbors.

This heightened risk can severely damage your financial standing. Dormant cards become prime real estate for identity theft and unauthorized transactions. A thief who gains access to your unused card number can make small, inconspicuous purchases, testing the waters before making larger, more damaging ones. Because these cards are often unchecked, these fraudulent activities can go unnoticed for extended periods, allowing the damage to accumulate.

Furthermore, your credit card issuer might close your account due to prolonged inactivity. While this won’t directly impact your credit score in the short term, it can affect your credit utilization ratio (the amount of available credit you’re using compared to your total credit limit). A higher credit utilization ratio can negatively impact your credit score, making it harder to secure loans or other credit lines in the future. The closure can also shorten your overall credit history length, another factor that influences your creditworthiness.

So, what can you do to protect yourself?

• Regularly review your credit reports: Monitor your credit reports from all three major credit bureaus (Equifax, Experian, and TransUnion) for any suspicious activity. You can access free reports annually.
• Set up account alerts: Many credit card issuers offer alerts for any transactions, even small ones. This allows you to catch unauthorized activity quickly.
• Consider occasional use: If you don’t want to cancel the card, make a small purchase every few months and pay it off immediately. This demonstrates activity and keeps the account open.
• Securely store unused cards: Don’t just toss them in a drawer. Keep them in a safe place to minimize the risk of physical theft.
• Notify your issuer if you lose a card, even an unused one: Immediate reporting is crucial to prevent fraudulent use.

Leaving a credit card unused might seem harmless, but the potential consequences can be significant. By taking proactive steps to monitor and manage your accounts, even those you rarely use, you can protect yourself from financial harm and maintain a healthy credit standing.