Does card inactivity hurt your credit score?

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As a miles and points hobbyist, I’ve come to care deeply about the state of my credit score and the health of my relationships with card-issuing banks. And like many of you, I try to optimize my spending to earn as many points and miles as possible.

I also try to manage and organize my credit cards, balancing when and where I use each card while using them the right amount to maintain a high credit score. In this post, we’ll dive into credit card inactivity and how not using your credit cards can even sometimes help your credit score.

Does not using a credit card hurt your credit score?

In general, not using a credit card will not hurt your credit score. In fact, keeping your card usage very low is one way to increase your credit score by reducing your overall credit utilization. Generally speaking, credit utilization comprises ~30% of your overall credit score.

Credit utilization is calculated as the percentage of debt you have outstanding on credit cards divided by the total amount of credit available to you. For example, if you have $10,000 of credit access across two cards with a total balance of $1,000 combined on those two cards, your overall credit utilization is just 10% ($1,000/$10,000).

So don’t be afraid to not use your cards — your credit score is probably safe. Just make sure that you use each card often enough so that the card does not become inactive — a topic we’ll touch on below.

Will my credit score go up if I don’t use my credit card?

The amount you use your credit cards won’t necessarily help your credit score either. Although banks want to see that you are a reliable borrower, they also want you to use their cards so they earn money on the interchange fees (or swipe fees, as they are commonly known). So we recommend that you use your cards, remembering to keep your overall credit utilization below 30%.

Overall, using or not using a single credit card typically won’t hurt or help your credit score. Just make sure that your total credit utilization across all your credit cards remains relatively low. Personally, I try to keep my utilization between 1% and 10% of my available credit limits.

How long until an unused credit card becomes inactive?

Keep in mind that banks will deem a credit card “inactive” after a certain amount of time without any use. This time period depends on the bank but is typically in the range of 1 to 3 years without any activity.

Capital One and Chase Bank are some of the quickest banks to deem a card inactive and will often close an account that has not been used in about a year. Other banks such as Citi and Bank of America will typically wait closer to two years. And some banks don’t have an official policy on marking your account inactive, so they consider each account holder individually before proactively closing any of your accounts.

If a credit card becomes inactive and is automatically closed by the bank, you may be able to call the bank and request that the card be reactivated. I have heard of various levels of success when doing so, but it never hurts to ask!

Should I cancel an unused credit card?

An obvious question that arises for any card that you haven’t used for a year or more is: Is it really worth keeping the card open? The answer typically depends on a few different factors, such as how old the card account is or if you receive certain perks or benefits just for holding the card, even if you don’t use it much.

For example, you should never close your oldest credit card account as holding on to older cards improves your credit account history. That means I’ll never close my Chase Sapphire Reserve® (which was originally opened as a Chase Sapphire Preferred® Card numerous years ago), though I may downgrade the card to avoid the annual fee.

You should also weigh the cost and benefits of keeping a card open that provides certain valuable perks. For example, the Citi® / AAdvantage® Executive World Elite Mastercard® or the United Club℠ Infinite Card (which just so happens to be offering an increased bonus!) may be worth keeping open for the lounge access they offer — even if you never use them for any purchases. 

Bottom line

It can sometimes be tough to keep up with five (or 15!) credit cards that you plan to use for different purposes. Sometimes, you may even go months or years without using a card, even though it has a specific purpose as part of your overall card strategy.

Thankfully, not using a card won’t adversely affect your credit score. In fact, it can even help your score by reducing your overall credit utilization. Just ensure to use your cards on occasion (such as once per year) so banks don’t close them out as inactive without you knowing.

Featured image by lentamart/Shutterstock.