topic Re: Inactive Card... Use it or Lose it? in Credit Cards

Inactive Card... Use it or Lose it?

Anonymous — Fri, 15 Feb 2019 23:55:54 GMT

Hi everyone,

I’ve had a Kohl’s Charge card for a year and a half now with only a couple uses since opened, which happens to be one of my oldest accounts besides Cap One. My last use of the card was April 2018, and paid in full since. I’d rather not close due to it being an “older” account and I have such a thin profile. My question is, how would it affect my scores if I did use this card again after all this time, or if I continue to let it sit idle? Has anyone experienced something similar? If so, what was your outcome?

I appreciate your feedback

Re: Inactive Card... Use it or Lose it?

Anonymous — Sat, 16 Feb 2019 00:23:23 GMT

It has not even been a year since you’ve used the card, so you’re probably not in danger of it being closed for inactivity. The common wisdom is use the card at least once every 12 months to prevent inactivity closures, although many creditors use longer time frames and some may use shorter timeframes.

I do not believe you would suffer any scoring penalties from failing to use the card in the near future. In the long term, inactivity could result in closure, which eventually would result in it dropping off of your credit report and lowering your average age of accounts. However that would be 7 to 10 years after closure, so that’s not something to worry about in the short term.

Sometimes when you use a card after a long period of inactivity there is a small point loss that returns, I think, the next billing period, so any loss would be regained shortly thereafter and is not to be concerned with.

Re: Inactive Card... Use it or Lose it?

Anonymous — Sat, 16 Feb 2019 00:26:48 GMT

Thank you for your insight, Birdman7!

Re: Inactive Card... Use it or Lose it?

AverageJoesCredit — Sat, 16 Feb 2019 00:56:30 GMT

Store cards often can go long times no use. Its always best to use at least once a year. You should be fine to go buy something and pif it . Sometimes, going certain times without using a credit card, especially a main cc like a visa, mc or Amex, it might cause account scrutiny or maybe trigger a fraud algorithm. For instance out of the blue you put on a 4k charge and had no use for along time. Not saying always but that can happen.

Re: Inactive Card... Use it or Lose it?

Anonymous — Sat, 16 Feb 2019 01:00:54 GMT

Thank you, AverageJoesCredit. I was curious since this is a retail card. I think I'll use it to keep it active.

Re: Inactive Card... Use it or Lose it?

AverageJoesCredit — Sat, 16 Feb 2019 01:08:31 GMT

Sure no problem. Just buy something you need , no need to force spend. Many rail against store cards for their high apr and such, but if you do shop there and use it wisely its ok in my opinion. From experience id say try to pay in full at end of month what you buy because store card debt builds fast if not kept in check. Best of luck on your journey

Re: Inactive Card... Use it or Lose it?

Spotsy — Sat, 16 Feb 2019 01:49:38 GMT

I have a Kohl’s card and have let it sit a little over 2 years a while back and had no adverse action taken. I maybe use it once a year and half...and have still seen the limit grow to 3K (SP at my request online).

I think you are fine..they(Capital One) seem to be very liberal with this product.

Re: Inactive Card... Use it or Lose it?

wasCB14 — Sat, 16 Feb 2019 07:04:26 GMT

@AverageJoesCredit wrote:
Store cards often can go long times no use. Its always best to use at least once a year. You should be fine to go buy something and pif it . Sometimes, going certain times without using a credit card, especially a main cc like a visa, mc or Amex, it might cause account scrutiny or maybe trigger a fraud algorithm. For instance out of the blue you put on a 4k charge and had no use for along time. Not saying always but that can happen.

Even with frequent use, a $4k purchase at Kohl's might be a major red flag!

Re: Inactive Card... Use it or Lose it?

UpperNwGuy — Sat, 16 Feb 2019 13:42:10 GMT

I was lazy and let two of my cards sit in the sock drawer for nine months. I used them both earlier this month. A few days ago I was alerted by Experian that two of my inactive cards had recently been used. That surprised me because I didn't realize that the credit bureaus were tracking the active/inactive status of my cards.

Re: Inactive Card... Use it or Lose it?

SouthJamaica — Sat, 16 Feb 2019 13:59:47 GMT

@UpperNwGuy wrote:
I was lazy and let two of my cards sit in the sock drawer for nine months. I used them both earlier this month. A few days ago I was alerted by Experian that two of my inactive cards had recently been used. That surprised me because I didn't realize that the credit bureaus were tracking the active/inactive status of my cards.

I believe that was a user-configured alert -- i.e. one that you yourself have requested from MyFICO.

Re: Inactive Card... Use it or Lose it?

Anonymous — Sat, 16 Feb 2019 14:01:22 GMT

Thanks for sharing your experience, UpperNwGuy! If you don’t mind me asking, had your score dropped due to using it?

Re: Inactive Card... Use it or Lose it?

UpperNwGuy — Sat, 16 Feb 2019 14:59:28 GMT

@SouthJamaica wrote:
@UpperNwGuy wrote:
I was lazy and let two of my cards sit in the sock drawer for nine months. I used them both earlier this month. A few days ago I was alerted by Experian that two of my inactive cards had recently been used. That surprised me because I didn't realize that the credit bureaus were tracking the active/inactive status of my cards.
I believe that was a user-configured alert -- i.e. one that you yourself have requested from MyFICO.

Nope. My Experian service is not via myFICO.

Re: Inactive Card... Use it or Lose it?

AverageJoesCredit — Sat, 16 Feb 2019 15:14:20 GMT

@wasCB14 wrote:
@AverageJoesCredit wrote:
Store cards often can go long times no use. Its always best to use at least once a year. You should be fine to go buy something and pif it . Sometimes, going certain times without using a credit card, especially a main cc like a visa, mc or Amex, it might cause account scrutiny or maybe trigger a fraud algorithm. For instance out of the blue you put on a 4k charge and had no use for along time. Not saying always but that can happen.
Even with frequent use, a $4k purchase at Kohl's might be a major red flag!

lol, especially if your credit limit is 3k😆

Re: Inactive Card... Use it or Lose it?

pinkandgrey — Sat, 16 Feb 2019 16:17:42 GMT

I always say: get rid of cards you don’t want or use. Of course there are some reasons for keeping it open, but personally I would rather simplify my finances rather than save a few points for my score. Plus it won’t affect your AAoA for years. CLOOOOSEEE away lol

Re: Inactive Card... Use it or Lose it?

Anonymous — Sat, 16 Feb 2019 17:12:22 GMT

@Anonymous wrote:
Thanks for sharing your experience, UpperNwGuy! If you don’t mind me asking, had your score dropped due to using it?

Using a card can impact score in a very few ways:

1) Utilization. If you put a large charge (relative to card credit limit) and let it report, you may get a utilization hit (and if it's large compared to your total credit limit, that as well). However, the point drop will go away the following cycle. And if you really need to maximize score, you can pay off before the statement cuts.

2) If you let it report, you have an extra card reporting a balance. If you had just one card reporting before, this could cause a small drop. (if none reported, it might cause a gain). If you had more than one card reporting, it might not matter at all (or at most a small drop). Again, this will go away next cycle or can be avoided entirely by paying before statement cuts.

So, don't be very worried.

Re: Inactive Card... Use it or Lose it?

Anonymous — Sat, 16 Feb 2019 17:23:11 GMT

Thank you for the useful information, longtimelurker! I understand when it comes to FICO Scores nothing is set in stone however, I appreciate the pointers and will keep in mind.

Re: Inactive Card... Use it or Lose it?

UpperNwGuy — Sat, 16 Feb 2019 20:16:38 GMT

@Anonymous wrote:
Thanks for sharing your experience, UpperNwGuy! If you don’t mind me asking, had your score dropped due to using it?

Not by any amount I would notice. My scores at all three bureaus fluctuate up and down about 5 points a month based on my credit card spending and payments for that month. I really don't care what the scores do as long as they stay above 800. I don't practice AZEO. In a normal month, 2 cards close with balances. I've had months in which 4-5 cards have had balances. It doesn't seem to affect the score.