One question I’m often asked is if credit card issuers close card accounts due to inactivity. In other words, could your card be canceled if you don’t put any spending on it for some amount of time, and is that something to be worried about?
Continue reading: Can Credit Cards Be Canceled Due To Inactivity? Yes… Sometimes
Share your questions, experiences, and thoughts below.
I so far only had Capital One closing a card that I did not use for many months. It was a card that I had for a very long time and unfortunately no reconsideration was possible.
Barclays has been quite aggressive to lower the credit limits on cards that I used regularly but which did not have large balances.
I received a warning email from FNBO that they would close my Amtrak card for lack of use - I believe this was after six months inactive. I used it for another trip and had no further issues.
I had a UK Amex Plat closed due to 12 months of inactivity... no warning, nothing, just closed and that's it. I used to use it for UK spend, and this happened during the pandemic...
If you don’t want to have to think about it, just set it up to autopay Netflix or something similar. Then set the card to autopay the full balance.
I would suspect this is not as big an issue with the major issuers (Chase, Citi, AMEX). However, it is much more common with private label credit cards (PLCC) and general-purpose co-brands. You get some murky issuers, there.
Classic Omaha... wantin' you to ride some choo-choos... and eat some steak (probably).
A warning is entirely appropriate (and appreciated) assuming, of course, they'd like to keep your business. Apparently, it did the trick, and the FNBO relationship survives. Some issuers, on the other hand, will quietly axe a card for inactivity in the middle of the night and call it a day. If the cardholder's lucky, they get a smug little email with a 3 AM timestamp letting them know the card's been cancelled for lack of use and no, you may not appeal.
Quick data point / anecdote: I keep a high credit limit card at one of my main financial institutions, which is one of the two big military credit unions (point being, not a traditional bank). They sent me a note a few years ago telling me they were going to cancel it due to inactivity, and like Ben indicated, I made a couple of small transactions and I still have the card.
I’ve had Chase cancel two cards on me: an Amazon one and a non-co-branded one.
They generally send you a letter or message ahead of time so you have at least 30-60 days to make some sort of transaction (if not longer).
I have a stack in a drawer. I keep one of them in my wallet and use it for a small purchase. When used, it goes to the bottom of the stack and I cycle through all of them once every 4 months.
For cards I care a lot about (my oldest), I put a monthly recurring charge on them.
“Ultimately there’s an opportunity cost for card issuers to giving you credit that you’re not utilizing, since they could otherwise be extending that credit to someone who is more likely to spend money on the card.” What??? It’s not an either/or equation.
I’ve had two cards closed, both by Barclays, garbage bank cards anyway. They were affinity cards (one was Royal Caribbean; don’t remember the other); kept the RCCL for its minimal cruise benefits, but cruised other lines for a few years so Barclays yanked it. Petty.
Twice a year--the time change serves as a nice reminder--I gather up my otherwise unused cards, walk down to the subway station, and use each card to load $2 onto my subway card. It keeps them active so they don't get cancelled.
On the other hand, Fidelity/Elan haven't cancelled my Fidelity card. I closed all of my Fidelity accounts over 4 years ago and haven't charged a penny to the card since. I don't know what they're waiting for.
Closed down once by Citi, as well. And the only communication was after the fact. Still annoys me.
Only Citi has closed an account of mine for inactivity. Thanks for the reminder not to take the risk though; I’d be annoyed if P2 & I ever lost the Chase $49 IHG Select cards. They’re great portfolio tools and come with a FNC, but not cards you’d consider for regular spend.
We have about a dozen no annual fee cards we keep open (out of the 30+ cards we have open), just to impact the credit utilization rate and average age of cards on our credit score. Many cards are over 15 years old. Every 9 months I take each card and buy myself a $5 Amazon gift card, issued to myself, which I then post to my Amazon account. Have never had a card closed. We also make monthly $10 auto pay contributions to our local PBS stations with our $49 IHG Select cards, which assures we retain the annual free night.
Ben, are you sure about your credit methodology? An aspect of credit scoring is the “type” of credit you have outstanding. A mortgage is secured by a home. A car loan is higher risk, but still secured by the vehicle. Available credit on multiple credit cards are the highest risk and can ding you FICO number.
Usually it's store cards (Kohl's, etc.) where this happens.
However, back during the Great Recession around 2008, I had this happen to a couple of Visa/Mastercard types.
Capital One not only closed a seldomly used credit card but they closed a savings account that had just over $20 in it. I called to see when they'd send me a check and they told me it was already in process of going to my state's unclaimed property division...It has never arrived so I don't know if they just kept the money or what. They were very aggressive closing these accounts