Is it bad to leave a credit card unused?
No, unused credit cards do not hurt your credit score. However, if the card has an outstanding balance, it's critical to keep making payments on time, as late or missed payments can negatively impact your score.
It's better to leave it open and let the company close it. If it is one of your oldest credit card it might be beneficial to keep it open since that helps your credit age.
The 5/24 rule: For some issuers, applicants can't open more than five new credit card accounts in a 24-month period. The 2/3/4 rule: According to this rule, applicants are limited to two new cards in a 30-day period, three new cards in a 12-month period and four new cards in a 24-month period.
It will not affect you if you do not use it. The bank will close the account eventually due to you not using it which will also not affect your score that much other than the loss of the credit limit. Use the card once a year and you should be fine.
In the long run, maintaining financial health could be much better for your credit score than the benefits of keeping the card account open. If you feel that keeping the account open could send you back into a stressful debt situation, then chop it up and close it down.
If you don't use a credit card for a year or more, the issuer may decide to close the account. In fact, inactivity is one of the most common reasons for account cancellations. When your account is idle, the card issuer makes no money from transaction fees paid by merchants or from interest if you carry a balance.
Canceling an account can lower the average length of your credit history and increase your credit utilization, both of which can have a negative impact on your score.
Before you run out and charge something just to keep your account active, however, you should know that it usually takes a year or more of inactivity for the issuer to close the card. It's also important to note that you might not get any warning that your issuer is closing your account.
In general, you should use your credit card at least once a quarter (every three months) to keep the card open and active. The answer to just how often you should use your card to maintain a good score comes down to your credit utilization and on-time balance payments, rather than how many transactions you have.
Keeping a low credit utilization ratio is good, but having too many credit cards with zero balance may negatively impact your credit score. If your credit cards have zero balance for several years due to inactivity, your credit card issuer might stop sending account updates to credit bureaus.
What is the golden rule of credit cards?
Pay Off Your Balance
The golden rule of credit card usage is to do everything you can to pay off your entire balance each month. If you can do this, you won't be charged any interest.
Capital One reportedly limits cardholders to one new Capital One credit card every six months. You can also have only five prime Capital One personal credit cards or two “starter” cards open at any given time. Co-branded Capital One cards and Capital One business credit cards don't fall under this restriction.
Your credit card account may be closed due to inactivity if you don't use it. You could overlook fraudulent charges if you're not regularly reviewing your account. If your credit card account is closed, it could negatively impact your credit score.
A perfect FICO credit score is 850, but experts tell CNBC Select you don't need to hit that target to qualify for the best credit cards, loans or interest rates.
- Discover it® Cash Back - 18 Month Intro Balance Transfer Offer: Best for Long intro period + quarterly categories.
- Chase Freedom Unlimited®: Best for Cash back for travel bookings.
- Wells Fargo Reflect® Card: Best for Longest 0% period for transfers and purchases.
If you don't use your card, your credit card issuer may lower your credit limit or close your account due to inactivity. Closing a credit card account can affect your credit scores by decreasing your available credit and increasing your credit utilization ratio.
For a score with a range of 300 to 850, a credit score of 670 to 739 is considered good. Credit scores of 740 and above are very good while 800 and higher are excellent. For credit scores that range from 300 to 850, a credit score in the mid to high 600s or above is generally considered good.
A crowded wallet and the temptation to spend might have you thinking about canceling unused credit card accounts. In most cases, however, it's best to keep unused credit cards open so you benefit from longer credit history and lower credit utilization (as a result of more available credit).
If you haven't used a card for a long period, it generally will not hurt your credit score. However, if a lender notices your inactivity and decides to close the account, it can cause your score to slip.
Experts suggest maintaining unused credit cards in several scenarios: You're planning to apply for a mortgage. The card has no annual fee. You can make small, occasional purchases to keep the account active.
Is Capital One a good credit card?
But Capital One's cards are more than hype — they include generous rewards cards as well as excellent products for business owners, students and those with average or poor credit.
Owning more than two or three credit cards can become unmanageable for many people. However, your credit needs and financial situation are unique, so there's no hard and fast rule about how many credit cards are too many. The important thing is to make sure that you use your credit cards responsibly.
Closing older accounts can lead to a score drop, especially if you decide to close the card you've had the longest. Even though closed accounts remain on your credit report for up to 10 years, they no longer contribute to the ongoing aging of your credit history.
There's no such thing as “too long” to keep a credit card. If you're happy with your card and getting a lot of value out of the rewards, there's no harm in sticking with it. Likewise, if you've stopped using a card and it doesn't charge an annual fee, in most cases it's preferable to keep the account open.
Key takeaways
Not activating a credit card can have negative impacts on your finances, but most downsides only apply if you fail to make payments toward a balance you owe. It's possible your credit card company will cancel the account if you fail to activate your card within 45 or 60 days.
