What Happens When You Stop Using Your Credit Cards?

Stop Using CardsHave you ever stopped using a credit card for an extended period of time? What happened? Did the card company close down your account? Did they lower or raise your spending limit? Visit the comments below and let me know. Here’s how I stumbled upon this question…

A reader recently emailed me with a question about maxing out reward points from credit cards. His current method involved using around 5 cards, each providing big cash back (3% to 5%) in certain spending categories, to maximize the amount of reward points he earned for his spending. By the way, he always pays each bill in full each month. He was questioning whether to continue in this method, or drop down to only one card, a new one, the “PT’s Pick” on my list of the best cash back credit cards. With his level of spending it could end up meaning significantly more reward points by the end of the year.

But he was concerned that he would need to continue to use his other cards to keep them active. I quickly recalled my own personal use with the Chase Freedom credit card. It’s a card that I applied for around the time I got married (2006). I used this card initially, but did not use it again till just last year (2010). The card was never cancelled, nor had my credit line been touched. So based on my own experience, I assumed cards that had once been used could live on for a while without being used. But, after some Googling, I know this does happen. I decided to call Chase and have this conversation about the life of credit card accounts with them. Here’s how it went:

PT: If I were to stop using my card, when would you close the account?
Chase Rep: We take a look at cards after two years of inactivity and make a decision to close the account or keep it open.

PT: What factors help you make the decision?
Chase Rep: It’s really case by case, but we consider how the card has been used in the past.

PT: Does credit score factor into the decision?
Chase Rep: Yes, we always have the latest credit file on record for our card holders so we use all the information available to help make the decision.

PT: What about new cards that were never used? Or even never activated?
Chase Rep: The “activation” has no bearing on the account status. Once you are accepted and get the card, you have an active credit card account. The use of the card is what determines whether we keep your account open or not. If you don’t use a new card, we shut it down in 90 days.

PT: Is any of this industry standard, outside of Chase?
Chase Rep: The 90 day rule, I believe, is a part of the new credit card legislation. But the two year rule is ours, but likely close to what other banks use.

I followed up online and could not locate information on the 90 day rule. If you know about it, please chime in below. So it looks like the credit card companies will possibly close your account. My advice, if you are considering inactivity, is to call your card company and ask them what their standard is.

Other factors to consider when dealing with card you no longer use:

  • If it’s an older card, consider taking steps to keep it active, as it adds to the length of credit history you have on file. Have a recurring bill (i.e. cell phone) that you can put on the card? Set it up, and set up the automatic payment to the credit card.
  • If it’s a card with an annual fee, consider dumping it all together. I suspect cards with fees aren’t shut down so quickly.

What’s your story with old, unused credit cards? Ever had an account closed?

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Last Edited: May 13, 2013 @ 3:53 pm
About Philip Taylor

Philip Taylor, aka "PT", is a husband and father of two. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or view the Philip Taylor+ Google profile.