I've read a few threads about certain banks closing inactive accounts.
It happened to me today. My Citibank was closed due to inactivity and info from my credit report. Too many inquiries and high credit utilization. Trying to lower my balances.
How common is this and does every bank do it?
It varies, but with everything going on these days many banks are tightening up to limit exposure and risk.
What impact does this have on my FICO?
It depends. If you have significant overall utilization, and you lose a line of credit, your utilization percentage will increase as it's being weighed against a smaller total credit line.
Is there some sort of a time line for how long you can go inactive with which bank before expecting them to close?
In general you should use any card you plan to keep at least every four to six months but you may want to increase that while the pandemic is happening.
There are a few cards that I opened long time ago that don't really intend to use anymore. For example, Amex, Barclay, and Capital one.
Look into a product change for these - maybe you can change them to a different card whose rewards serve you better. If I were you I would use those cards and keep them open for now at least. You said high utilization was an issue so losing those cards is going to drive it up further. That will hurt you further. If it were me, I'd buy a few things with those cards to show activity. Once your closure hits your reports, other lenders may consider following suit.
