What will Happen if you Do Not Use Your Credit Card for a Long Time?
After applying for a credit card several times, we end up not using it. Even if you think that nothing will happen because of it, that is completely wrong. Credit card holders should know these things about inactive credit accounts. Go through this article and know what will happen if you do not use your credit card for a long time.
What will Happen if you Do Not Use Your Credit Card for a Long Time?
If you do not use your credit card for a long time, it is declared inactive. Generally, if the credit card has not been used for six months to a year, the company will contact you before deactivating it and give you the opportunity to reactivate it. It is important to note that prolonged inactivity may result in the termination of your account.
Closing an Account will Lowers your Credit Score
If the account is closed, it can negatively affect your credit score. Closing an account lowers your credit score, which can increase your credit utilization ratio. This is usually the amount of your credit compared to your total credit limit. Credit utilization is typically 30 percent of your credit score, so a higher ratio can lower your score.
Not using the card means you miss out on benefits like rewards, cashback offers and lounge access. If your card remains inactive for a long period of time, your accumulated rewards, points and offers may also expire. If the account is inactive, contact the bank to reactivate it.
Do the Below Things to Keep your Credit Card Active
- Small aggregate transactions should be done at intervals of few months.
- You need to check your credit card statement.
- If the credit card is no longer required, it can be closed by contacting the bank.
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