Will it hurt my credit history if I never use my credit card?

When used wisely, a credit card can help you improve your credit score. But over time, your loan needs may change, so you may want to apply for another loan. So, should you just stop using the old card?

Not using an old credit card should not in itself affect your credit score, although in some cases it may indirectly. Keep reading to find out everything you need to know about how to keep a credit card but not use it.

Can a card be closed due to inactivity?

Yes, your card issuer may close your account if it has not been used for an extended period of time. If the account is closed due to non-use, you need to consider the loss of additional credit that you received when you opened the account. When the account is closed, you will lose this available credit and your Usage Points may be affected.

Credit usage — or how much of your available credit you have used — accounts for up to 30 percent of your FICO score, second only to payment history at 35 percent. These two factors make up the lion’s share of your bill and are the only two factors that are always 100 percent in your control.

The rest of your account is made up of credit history, or how long you had your oldest account, at 15 percent; credit mix or types of your accounts at 10 percent; new credit is also calculated at 10 percent. Your accounts may be as old as they are, so there’s not much you can do about it. The credit mix can also be difficult to manage because it requires you to have accounts other than credit cards (think installment loans like mortgages or car loans).

Will an unused credit card hurt my credit score?

Generally speaking, no, this will not affect your bill unless you use a credit card. However, it’s important to check your credit report and score to see what effect opening an account had in the first place.

Tough requests can lower your score by a few points until you show you can handle the extra credit risk (usually a few months). Since you received a credit card, this means that a hard request has been made. This small loss of points is often offset by the addition of more credits available to you, so in many cases it becomes a breeze.

The only exception is that if you are planning to apply for a mortgage soon, the lender may be concerned if you have too much in the way of your existing credit lines. The worry is that you can go out and buy whatever your line of credit allows, thereby jeopardizing your ability to repay the loan. It’s unlikely, but it happens.

How to keep your card active without damaging your account

You can keep your card active by making small purchases or by paying certain bills, such as streaming subscription plans or phone bills. And these small expenses can have a positive impact on your credit score, especially if you pay off your balance in full before the due date. At the same time, it shows responsibility.

bottom line

Your credit score and your bills are ultimately yours, so you have a vested interest in doing what will help you the most. Entering into a new loan agreement should always be considered carefully, taking into account how this may affect your account, as well as how you will manage the account.

Steve Bucci has been helping people decipher and solve personal finance issues for over 20 years. He is the author of The Dummies’ Credit Management Kit, The Dummies’ Credit Repair Kit, Barnes and Noble Debt Management, co-author of The Dummies’ All-In-One Money Management Kit, and The Credit Repair Kit. For Dummies (Australia). Steve is an experienced expert witness in identity theft, credit scoring and debt cases. He has been a speaker at the FICO InterACT Global Conference, the Federal Reserve and the International Credit Symposium at the University of Cambridge in the UK.