What happens if you don't use your credit card?

The Silent Threat: What Happens When Your Credit Card Collects Dust

We live in a world that encourages swiping, tapping, and online shopping with ease. But what happens when your trusty credit card stays tucked away in your wallet, gathering dust rather than rewards points? You might assume it’s harmless, but the reality is, an inactive credit card can pose a risk to your financial health.

Credit card issuers aren’t keen on accounts that sit idle. After a certain period of inactivity – typically ranging from 6 months to 2 years depending on the issuer and card terms – they may close your account due to lack of use. While this doesn’t directly hurt your credit score, it can negatively impact your credit utilization ratio (the amount of credit you use compared to your total available credit). A higher credit utilization ratio can signal risk to lenders and potentially lower your score.

But account closure is just the tip of the iceberg. A dormant credit card is an attractive target for fraudsters. If you aren’t actively monitoring your statements, fraudulent charges can slip under the radar, racking up debt in your name and potentially impacting your credit score.

So, how do you avoid these pitfalls? It’s simple:

• Keep your credit card active: Even small, infrequent purchases charged and paid off immediately can prevent your account from being flagged as inactive.
• Set up account alerts: Most issuers offer online and mobile banking with customizable alerts. Be notified of any transaction, even for small amounts, to stay informed and spot potential fraud instantly.
• Regularly review statements: Don’t just glance at the balance. Scrutinize each transaction to ensure its legitimacy and report any discrepancies immediately.

Remember, your credit card is a tool – and like any tool, it requires responsible use and maintenance. Don’t let it become a liability by neglecting it. Keep it active, monitor it closely, and reap the benefits of a healthy credit profile.