A credit card is a valuable tool but can also be dangerous. If you have an unused credit card that’s been sitting in your wallet for months, years, or decades without any charges, there’s a good chance that the account has become inactive. An expired credit card can hurt your credit score. Here are some things to watch out for:
Can a credit card be closed due to inactivity?
There are several reasons a credit card company might close an account. One is if you don’t use it for an extended period, during which the company may decide to close the account on its own. This could be because they think you no longer want to use the card or because they want to make room for other customers. Inactivity can also cause a credit card company to close your account.
When you open a new line of credit, like a department store or gas station, offers, you receive an “introductory APR” – a low rate that lasts until either the expiration date or one year later. Once this introductory period ends, your interest rate will probably go up unless you pay your balance in full monthly.
If there has been no activity on your account, there may have been no reason for them to maintain their relationship with you as far as interest goes. Thus they might consider closing it down completely when it becomes inactive.
Does an expired credit card hurt your score?
The number of cards you have plays a role in determining your credit score. The more cards, the better! However, there is a downside to having too many unused credit cards: it can negatively impact your score.
Also, if your credit card expires and you ignore it, it will negatively impact your credit score. But according to SoFi experts, “Your credit card’s expiration date will always appear on the card. In most cases, the expiration date will appear on the front of the card, on the right side, below the account number.” Also, the bank or lender will mail you a new card before the old one expires.
How to keep your credit cards active without hurting your score?
The first thing you can do is keep the account open. While it’s always a good idea to pay your bills on time and avoid late payments, if your credit card company constantly sends you notices about closing an account due to lack of use, you should contact them and ask them to stop sending these notifications. If they continue, hang up the phone and call back later with a different number so they won’t be able to find out who you are.
The second thing is making purchases on your card every six months; this ensures that there isn’t too much activity on one particular account. Finally, try using another credit card once or twice a year when paying bills.
This post discussed how having an inactive or expired credit card account can impact your credit score. When you have multiple cards and don’t use them regularly, it can be difficult to memorize which ones are active and which aren’t. The good news is that there are ways to avoid this problem in the future so that you never have to worry about forgetting those old accounts again.
