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

If you don’t use a credit card for a set period of time, your issuer may reduce your credit limit or close your account due to credit card inactivity. And that could affect your credit scores.

Learn more about what happens as well as other options for a credit card you don’t use.

What you’ll learn:

• If you don’t use your card, your credit card issuer may lower your credit limit and eventually close your account. 

• Closing a credit card account could make it harder to maintain a low credit utilization ratio, an important credit-scoring factor. 

• You won’t be charged a fee for not using your credit card. Inactivity fees were banned in 2010.

• Instead of closing the account, you could keep your credit card active by setting up a small recurring purchase that you can pay off each month.

If you have a card you’re not using, here’s what might happen.

Your account may be considered inactive if you don’t use your credit card for a period of time. That length of time depends on individual issuer policies. Some credit card issuers may reduce your credit limit first. Others may just close your account. 

Card issuers aren’t required by law to give advance notice of account closure because of inactivity.

If you’re not using a credit card and it’s closed because of inactivity, it could affect factors that influence your credit scores.

• Credit utilization ratio: Your credit utilization ratio measures how much of your credit you’re using compared to your available credit. The Consumer Financial Protection Bureau (CFPB) recommends keeping your credit utilization ratio below 30%. Closing a credit card account could lower your total available credit and raise your credit utilization ratio if you maintain the same spending habits. 

• Length of credit history: The length of your credit history is determined by how long your credit accounts have been open. Canceling a credit card could affect the average age of your accounts. 

• Credit mix: Your credit mix is the balance of installment and revolving credit accounts you have. If you close a credit card account and it’s your only type of revolving credit, your credit mix could be negatively affected.

There’s no industry standard, but if your card is inactive your issuer could eventually close your account.

You won’t be charged for credit card inactivity. Credit card inactivity fees, also called dormancy fees, used to apply to inactive accounts. These charges were banned in 2010 as an amendment to the Truth in Lending Act (TILA).

Closing a credit card account yourself can have effects similar to an account closure through inactivity. It could limit your access to credit and rewards. It could also make it harder to maintain a low credit utilization ratio, reduce the length of your credit history and negatively affect your credit mix. 

But there may be times when the positives of closing an account outweigh the negatives—like when you’re paying a high annual fee on your credit card or struggling to manage multiple accounts.

If you decide to cancel a credit card, the CFPB says you’re required to pay off any balance and that your issuer can  still charge interest on the amount you owe. Before you close, it might also be worth redeeming any rewards you’ve earned.

If you want to keep your credit card account active, you could use it to make small or recurring purchases. You could set up automatic payments for the card so you won’t need to worry about missing a payment. And if you pay off the balance each month, you might avoid interest charges on those purchases. 

Plus, consistent positive payment activity can help your credit scores.

If your card has an annual fee but you’re worried that closing your account could affect your credit, you could ask your credit card issuer to upgrade or downgrade the account. That could let you swap your current credit card for one you may use more frequently, and it usually doesn’t affect your credit scores.

Credit card inactivity could negatively affect your credit scores, but you can evaluate your cards and make a plan to keep them active if you decide it’s best.

Understanding your credit scores before closing an account can help you manage the impact on your credit reports. With CreditWise from Capital One, you can monitor your credit health for free without hurting your credit scores. You can also see how some financial decisions could affect your credit with the CreditWise Simulator.

CreditWise is free to everyone—even if you’re not a Capital One cardholder.