Illustration for article titled The Easiest Way to Prevent Your Card from Closing for InactivityPhoto: Marie Maerz (Shutterstock)

Since credit card companies are under no obligation to warn you, this can happen out of the blue – your credit card suddenly closes due to inactivity and your creditworthiness drops. In general, there is a risk that your credit card will be closed after 12 months of inactivity. However, this can only take a few months, making it difficult to predict. Here’s what you can do to prevent a surprise ahead of time without thinking too much about it.

Why don’t you warn credit card companies?

You don’t necessarily have to. According to ForbesThe 2009 Credit Card Act requires creditors to give borrowers 45 days’ notice of material changes to the terms of their account. However, the courts later determined that a credit card cancellation due to inactivity does not apply. That doesn’t mean banks won’t give you 30 days notice (some state laws require it), it’s just not guaranteed.

Even after ForbesSince banks lose up to $ 100 a year per inactive card, they are encouraged to close accounts. This could explain why the range of acceptable inactivity varies from a few months to a few years, although it is usually a year (if your card has an annual fee it is less likely to close than a no-fee card).

If you are unsure about your card’s policies, your card’s terms and conditions agreement should contain some information on how to deal with inactive accounts.

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Why does it matter?

If a credit card is unexpectedly closed, it can seriously affect your credit score, sometimes at the worst possible time – for example, when you want to apply for a loan. This is because 55% of your credit score depends on how much unused credit you have, the average age of your credit lines, and what mix of credit you have (e.g. mortgages, car loans, credit cards). If you suddenly lose a card, these categories will be affected. Some research suggests that anecdotally, at least anecdotally, a closed credit card can lower your credit score by about 100 points.

What’s the best way to prevent an inactive card?

The obvious answer is to use each of your credit cards to make at least one purchase every few months. However, if you don’t point it out, it’s easy to forget – especially if you don’t have all of your cards with you.

Instead, a simpler approach to set and forget is to schedule your card to pay off for a cheap, recurring subscription you already have. If it’s a infrequent subscription – every three or six months, for example – this is even better. In my case, I’m using an old card to automatically pay for my Spotify subscription – and nothing else. I also set up my card so that my checking account automatically pays the balance every month in case I forget the card exists (because it’s buried in a drawer somewhere).

This way, I only use my oldest credit card (over ten years old) for credit history and, to a lesser extent, the additional total balance to add to my credit rating. And it works.