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Does it hurt your credit to sock drawer a card?

Contributor

Does it hurt your credit to sock drawer a card?

What if you were to get a 5% cashback card, but you really only planned on using it for one quarter per year for a specific 5% catagory. If you socked away that card for the rest of the year and it just reported $0.00 balances all the time, would that hurt your credit? Or does it not matter as long as you have another daily driver card thats reporting good utilization for you?
Message 1 of 18
17 REPLIES
Valued Contributor

Re: Does it hurt your credit to sock drawer a card?

It will not hurt your credit score. In fact it will just help with your AAoA. I use my BoFA card once every 1.5 years on a piece of gum and no issues here Smiley Very Happy
American Express PRG__American Express BCE__Chase Amazon__Chase United TravelBank___American Express Everyday

Message 2 of 18
Valued Member

Re: Does it hurt your credit to sock drawer a card?

Your credit takes a temporary hit if your utilization is 0% across all of your cards, but if you have something else that you use and reports a small balance you're fine.

Message 3 of 18
Valued Contributor

Re: Does it hurt your credit to sock drawer a card?

Yes I forgot to post you should have at least one card showing utilization.. but always PIF!
American Express PRG__American Express BCE__Chase Amazon__Chase United TravelBank___American Express Everyday

Message 4 of 18
Senior Contributor

Re: Does it hurt your credit to sock drawer a card?

The only time a SD card can "hurt" your credit score is if it's cancelled and removing that credit limit from your overall credit limits results in your aggregate utilization then rising above a threshold.  First, chance of it getting cancelled as long as you are using it for a quarter per year are slim, but second unless it has a very high CL and makes up a large percentage of your overall CL it shouldn't impact your utilization significantly even if it were to get closed. 

 

Just to be safe, I might suggest taking it out of the SD for a single purchase at some point mid-year between the date you start using it one quarter and stop.  For example, if you use it from Jan through March every year and SD it on April 1st, I'd suggest throwing at least a small purchase on it sometime around August 1st just to show a piece of usage during the 9 month span where you otherwise wouldn't plan to use it at all.

Message 5 of 18
Valued Contributor

Re: Does it hurt your credit to sock drawer a card?

Some posters have reported experiencing a temporary score drop when an inactive account 1st reports as active again. From what I have read, accounts can be taged as inactive after 3 months. However, an inactive account (according to the poster) only affects score when re-activated if the period of inactivity exceeds 6 months. Even then, the negative impact associated with re-activation lasts only one cycle. (see below paste referring to a score drop when an inactive card was reused)

 

http://ficoforums.myfico.com/t5/Credit-Cards/Score-Drop-due-to-Account-activity/m-p/3923793#M1096662

 

For no annual fee backcards it is best to use the card at least once every 6 months. More than a few have posted bankcards being canceled with a period of inactivity between 8 months and 12 months. It is important to use bankcards you want to keep periodically.

 

Store cards have much lower risk of closure due to inactivity but, it still will happen. My Kohls card was closed after 52 months of inactivity.

Fico 8: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 9: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 4 .....:. EQ 804 TU 823 EX 830 (3/2017) EX Fico 98: 839 (3/2017)
VS 3.0:...... EQ 832 TU 832 EX 832 (3/2017)
Fico 8 BC:. EQ 887 TU 899 EX 900 (3/2017)
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950 (4/2017)
Message 6 of 18
Valued Contributor

Re: Does it hurt your credit to sock drawer a card?


Thomas_Thumb wrote:

Some posters have reported experiencing a temporary score drop when an inactive account 1st reports as active again. From what I have read, accounts can be taged as inactive after 3 months. However, an inactive account (according to the poster) only affects score when re-activated if the period of inactivity exceeds 6 months. Even then, the negative impact associated with re-activation lasts only one cycle.

 

For no annual fee backcards it is best to use the card at least once every 6 months. More than a few have posted bankcards being canceled with a period of inactivity between 8 months and 12 months. It is important to use bankcards you want to keep periodically.

 

Store cards have much lower risk of closure due to inactivity but, it still will happen. My Kohls card was closed after 52 months of inactivity.


I think that my score dropped this month because 2 cards not used for several months reported a balance. I just wanted them to report my new limit and if they don't report then the new limit is not reported.

 

@Thomas_Thumb, I will no longer ask for CLI on those 2 cards. Just to keep them active can I charge something and pay it before the statement close? I don't need to let a SD card report a balance to keep it active, right?

Message 7 of 18
Community Leader
Senior Contributor

Re: Does it hurt your credit to sock drawer a card?


Thomas_Thumb wrote:
 

For no annual fee backcards it is best to use the card at least once every 6 months. More than a few have posted bankcards being canceled with a period of inactivity between 8 months and 12 months. It is important to use bankcards you want to keep periodically.

 

Store cards have much lower risk of closure due to inactivity but, it still will happen. My Kohls card was closed after 52 months of inactivity.


Hi TT!  The last time I asked the broader community for case studies of cancellatons due to inactivity, I think I was unable to find anyone who reported a closure for which both were true:

 

(a) inactive < 12 months

(b) the card had been used at least once

 

I did find a couple case of cancellations < 12 months but they were cases of a person who had never used the card at all.  Our OP has used his card a lot thus far and the maximum period of inactivity moving forward will never be more than 9 months.

 

http://ficoforums.myfico.com/t5/Credit-Cards/how-long-before-a-card-is-cancelled-for-inactivity/td-p...

 

Let me know if you can find any cases of anything different.  I have been wanting to reactivitae this thread lately anyway and ask.

Message 8 of 18
Senior Contributor

Re: Does it hurt your credit to sock drawer a card?

You don't need to let a SD card report a balance to be seen as active.  Any activity is activity.  Making a minimum payment is activity, too.  Someone can have a card with a high balance that doesn't have a single transaction placed on it for 5+ years, but since the card holder is making payments on it (activity) the account can't be closed due to inactivity.

Message 9 of 18
Valued Contributor

Re: Does it hurt your credit to sock drawer a card?

I've come across 5 to 6 threads where bank cards were reported as closed due to inactivity. The majority were for Wells Fargo cards. Example pasted below.

 

http://ficoforums.myfico.com/t5/Credit-Cards/Wells-Fargo-Closed-My-Credit-Card/m-p/4435638#M1274808

WF.jpg

 

 http://ficoforums.myfico.com/t5/Credit-Cards/Wells-Fargo-closed-my-cc-account/m-p/4300972#M1226864

 

WF2.jpg

 

 

I'll paste a few other links as well.

 http://ficoforums.myfico.com/t5/Credit-Cards/Account-closed-due-to-Inactivity-Synchrony/m-p/4319511#...

 

http://ficoforums.myfico.com/t5/Credit-Cards/What-to-do-HSBC-cancelled-me-b-c-of-inactivity/m-p/1379...

 

Fico 8: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 9: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 4 .....:. EQ 804 TU 823 EX 830 (3/2017) EX Fico 98: 839 (3/2017)
VS 3.0:...... EQ 832 TU 832 EX 832 (3/2017)
Fico 8 BC:. EQ 887 TU 899 EX 900 (3/2017)
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950 (4/2017)
Message 10 of 18