Will Not Using My Credit Card Affect My Credit Score?

Ignoring your credit card doesn't automatically mean your credit score will plummet, but it can certainly lead to negative consequences. Understanding how credit scoring works is key to managing your financial health effectively, even when your cards are dormant.

Understanding Credit Scores: The Foundation

Credit scores are numerical representations of your creditworthiness, a vital component of your financial life. Lenders, landlords, and even some employers use these scores to assess the risk associated with extending credit or offering services. In 2025, the most widely used credit scoring models are FICO and VantageScore, which consider various factors to generate a three-digit number, typically ranging from 300 to 850. A higher score indicates a lower risk, making it easier and cheaper to borrow money. Conversely, a lower score can lead to higher interest rates, loan denials, and increased scrutiny in financial dealings.

The creation of these scores is a complex algorithm designed to predict the likelihood of a borrower repaying their debts. Understanding the components that contribute to your score is paramount, as it empowers you to make informed decisions about managing your credit. Ignoring a credit card, especially one that is part of your established credit history, can inadvertently affect these components. This post will delve into the specifics of how credit scoring works and what inactivity means for your financial standing.

How Credit Utilization Works and Why It Matters

Credit utilization ratio (CUR) is one of the most significant factors influencing your credit score, typically accounting for about 30% of your FICO score. It measures the amount of credit you're currently using compared to your total available credit. For instance, if you have a credit card with a $10,000 limit and you've used $3,000 of it, your utilization ratio for that card is 30%. The aggregate utilization across all your credit cards is what matters most. Lenders generally prefer to see a utilization ratio below 30%, with scores benefiting most from ratios below 10%.

A high credit utilization ratio can signal to lenders that you are heavily reliant on credit and may be at a higher risk of defaulting on your debts. This is because it suggests you might be struggling to manage your existing debt load. Conversely, a low utilization ratio indicates that you are using credit responsibly and have ample available credit, which is viewed favorably.

Example: Imagine you have two credit cards. Card A has a $5,000 limit and you owe $1,000. Card B has a $2,000 limit and you owe $500. Your total credit limit is $7,000, and your total debt is $1,500. Your overall credit utilization ratio is ($1,500 / $7,000) * 100 = approximately 21.4%. This is a healthy ratio.

When you have a credit card that you don't use, it still contributes to your total available credit. This is a crucial point. If you have a card with a $5,000 limit that you never touch, that $5,000 is part of your denominator when calculating your overall utilization. If you were to close that card, your total available credit would decrease, and your utilization ratio would increase, assuming your balances on other cards remain the same. This can negatively impact your credit score.

Current 2025 Insight: According to recent analyses, maintaining an overall credit utilization below 10% can boost credit scores by as much as 50 points compared to maintaining a ratio between 20% and 30%. This underscores the importance of keeping your credit available, even if you're not actively spending on it.

Credit Card Closures and Utilization

Closing an unused credit card can have a direct impact on your credit utilization ratio. When a card is closed, its credit limit is removed from your total available credit. If you have other cards with balances, this reduction in available credit will automatically increase your overall utilization ratio. For example, if your total credit limit across all cards is $20,000 and you have $5,000 in balances, your utilization is 25%. If you close a card with a $5,000 limit, your total available credit drops to $15,000, and your utilization jumps to 33.3% ($5,000 / $15,000), potentially lowering your score.

Length of Credit History: The Long Game

The length of your credit history is another significant factor in credit scoring, typically making up about 15% of your FICO score. This includes the age of your oldest credit account, the age of your newest credit account, and the average age of all your accounts. A longer credit history generally indicates more experience managing credit responsibly, which is viewed positively by lenders. A longer history demonstrates a track record of consistent repayment behavior over time.

When you have an old, unused credit card that has been open for many years, it contributes positively to the average age of your accounts. If you decide to close this card, especially if it's your oldest account, you could significantly reduce the average age of your credit history. This can make your credit profile appear less established and potentially lower your credit score.

Example: Suppose your oldest credit card account was opened 10 years ago, and you have several newer cards. Your average account age is substantial. If you close that 10-year-old card, and your next oldest account is only 5 years old, your average account age will drop considerably. This can have a detrimental effect on your score.

Current 2025 Insight: Credit bureaus recognize that the average age of accounts is a strong predictor of responsible credit management. Studies in 2025 indicate that individuals with an average credit history of 10 years or more tend to have credit scores that are, on average, 50-70 points higher than those with an average history of 3 years or less.

Impact of Closing Old Accounts

Closing an old, unused credit card is akin to erasing a chapter from your financial autobiography. It doesn't just affect your credit utilization; it directly impacts the perceived longevity of your credit experience. If this old card is your oldest account, its closure can dramatically decrease the average age of your credit history, signaling less experience to potential lenders.

Types of Credit and Their Impact

Credit scoring models also consider the mix of credit you have. This factor, often referred to as "credit mix," accounts for about 10% of your FICO score. It involves having a combination of different types of credit, such as revolving credit (like credit cards) and installment loans (like mortgages or auto loans). A diverse credit mix can demonstrate that you can manage various forms of debt responsibly.

While not as impactful as credit utilization or payment history, having a healthy credit mix can provide a slight boost to your credit score. An unused credit card, even if not actively used for spending, still represents a line of revolving credit. Its existence contributes to your credit mix. If you have only installment loans and no revolving credit, or vice versa, your credit mix might be considered less than ideal.

Example: Someone with a mortgage, an auto loan, and two credit cards generally has a better credit mix than someone with only a mortgage and no credit cards. The unused credit card, in this context, helps maintain that diversity of credit types.

Revolving vs. Installment Credit

Revolving credit, such as credit cards, allows you to borrow up to a certain limit and repay it over time, with the amount borrowed fluctuating. Installment credit involves borrowing a fixed amount and repaying it in regular installments over a set period. Demonstrating proficiency in managing both types of credit can be beneficial for your credit score. An unused credit card, by its very nature, is a form of revolving credit. Its presence on your credit report, even without activity, contributes to the perception of a balanced credit portfolio.

Credit Inquiries: A Temporary Tweak

Credit inquiries are records of when a lender or creditor checks your credit report. There are two types: hard inquiries and soft inquiries. Hard inquiries occur when you apply for new credit (e.g., a new credit card, loan, or mortgage). These can slightly lower your credit score by a few points, as they suggest you are seeking new debt. Multiple hard inquiries in a short period can be a red flag to lenders.

Soft inquiries, on the other hand, do not affect your credit score. These happen when you check your own credit, or when a potential employer or landlord performs a background check, or when a credit card company pre-approves you for a card. The key here is that *not using* a credit card does not generate any inquiries, hard or soft, related to that specific card's activity. The impact of inquiries is primarily linked to the act of applying for new credit, not the ongoing management of existing credit lines.

Hard vs. Soft Inquiries

It's crucial to distinguish between hard and soft inquiries. Applying for a new credit card, even one you might not use much, results in a hard inquiry. This is why it's generally advisable to avoid opening numerous new credit accounts unless you genuinely need them. An unused credit card that you already possess does not generate any inquiries related to its inactivity. The only time an inquiry might be associated with an unused card is if the issuer periodically checks your credit for account management purposes (a soft inquiry), which is harmless to your score.

What Happens When You Don't Use a Credit Card?

When you have a credit card that you rarely or never use, several things can occur, some of which might not be immediately apparent. The most common scenario is that the card simply sits in your wallet or digital wallet, with no transactions recorded. However, this inactivity can trigger a chain of events that may eventually impact your credit score, albeit indirectly.

The primary concern with an unused credit card is the risk of the issuer closing the account due to inactivity. Credit card companies incur costs for maintaining accounts, even dormant ones. To mitigate these costs and to manage their portfolio, issuers may decide to close accounts that haven't been used for an extended period, often ranging from 12 to 24 months, though this timeframe can vary significantly by issuer and card product.

Current 2025 Trend: Many financial institutions are becoming more aggressive in closing dormant accounts to streamline operations and reduce risk. Some issuers have been observed to close accounts after as little as 6 months of inactivity, particularly for cards with no annual fee.

Another potential consequence is the loss of associated benefits. Many credit cards offer rewards, travel perks, or purchase protections. If you don't use the card, you forfeit these benefits. While this doesn't directly impact your credit score, it means you're not getting value from a product you technically possess, which can be a missed opportunity.

Account Closure Due to Inactivity

The most direct consequence of not using a credit card is the possibility of the issuer closing the account. This is a business decision based on profitability and risk management. If an account shows no activity for a prolonged period, the issuer may deem it unprofitable or potentially a liability and proceed with closure. This closure will be reported to the credit bureaus, and it will affect your credit report.

When an account is closed by the issuer, it typically remains on your credit report for up to 10 years from the date of closure, but it will be marked as "closed by grantor" or similar. This notation can sometimes be viewed less favorably than an account closed by the consumer. More importantly, as discussed earlier, this closure reduces your total available credit, potentially increasing your credit utilization ratio and negatively impacting your score.

Fees and Interest on Unused Cards

While you might not be actively spending, some unused credit cards can still incur costs. If the card has an annual fee, you'll continue to be charged that fee regardless of usage. This means you're paying for a service you're not utilizing. Furthermore, if there's a small balance that was forgotten or if a fee accrues interest, you could find yourself owing money on an account you barely remember.

Potential Negative Impacts of Inactivity

The decision to let a credit card gather dust can have several downstream effects on your credit score. These impacts are often interconnected and stem from the core principles of credit scoring. Understanding these potential pitfalls is crucial for anyone aiming to maintain a healthy credit profile.

Reduced Credit Utilization Ratio

As previously elaborated, the most significant negative impact of not using a credit card is its effect on your credit utilization ratio. When a card is closed due to inactivity, its credit limit is removed from your total available credit. If you carry balances on other cards, this reduction directly increases your utilization ratio. A higher utilization ratio is a strong indicator of increased credit risk and can significantly lower your credit score. For example, if you have a 25% utilization ratio and close a card with a $5,000 limit, your utilization could jump to 33% or more, depending on your other balances. This increase can drop your score by tens of points.

Shortened Credit History Length

If the unused credit card is one of your oldest accounts, closing it can significantly reduce the average age of your credit history. A longer credit history is generally beneficial, demonstrating a longer track record of managing credit. The average age of accounts is a factor that contributes to your credit score. Removing an old account effectively erases years of credit history, making your credit profile appear less mature and potentially lowering your score. This is particularly detrimental if it's your oldest active account, as it sets a new, much younger starting point for your credit history.

Loss of Credit Mix Benefit

While the credit mix factor is less influential than utilization or payment history, it still plays a role. An unused credit card represents a line of revolving credit. If you have a balanced credit portfolio that includes both revolving credit and installment loans, closing an unused credit card might disrupt this balance. If you end up with only installment loans, for instance, your credit mix might be considered less diverse, potentially leading to a slight decrease in your score.

Potential for Fees and Debt

Even if you don't use a card, it might still incur fees, such as an annual fee. If you forget about the card, these fees can accumulate. Furthermore, if there was a small outstanding balance, or if a fee itself is subject to interest, you could inadvertently accrue debt on an account you're not actively monitoring. This can lead to missed payments if the fees go unnoticed, which is one of the most damaging factors for a credit score.

Current 2025 Data: Experian reports that individuals with a credit score above 700 are more likely to have a diverse credit mix and a longer credit history. The average age of accounts for those with excellent credit is often over 10 years, highlighting the importance of preserving older accounts.

Strategies to Maintain Your Credit Score with Inactive Cards

The good news is that you don't have to let your unused credit cards become a detriment to your credit score. With a few proactive steps, you can keep them active and beneficial to your financial health without incurring unnecessary costs or risks.

Make Small Purchases Periodically

The simplest and most effective strategy is to use the card for small, recurring purchases that you would make anyway. This could be a monthly subscription service, a cup of coffee, or a small online purchase. The key is to ensure there's at least one transaction every few months, or at least once every six to twelve months, depending on the issuer's inactivity policy. This signals to the issuer that the account is active and can prevent it from being closed due to dormancy.

Example: Set up your streaming service subscription or your monthly gym membership to be charged to the unused credit card. Ensure you have automatic payments set up to pay off the balance in full each month.

Set Up Automatic Payments

Crucially, when you make small purchases on an unused card, always set up automatic payments to pay the statement balance in full each month. This prevents you from incurring interest charges and ensures you don't accidentally miss a payment. Missing a payment is one of the most damaging events for your credit score, far more so than the occasional small purchase or the existence of an unused card.

Track Your Accounts Regularly

Even if you're only using the card for minimal spending, it's essential to monitor your credit card statements regularly. This helps you stay aware of any potential fraudulent activity, ensure your automatic payments are processing correctly, and keep track of any fees that might be applied. Many issuers offer mobile apps and online portals that make tracking your accounts easy.

Consider Product Changes

If you have an unused card that comes with an annual fee you no longer wish to pay, or if its benefits no longer align with your needs, contact the credit card issuer. Many issuers allow you to switch to a different card product within their network. You might be able to change to a no-annual-fee card or a card with better rewards that you're more likely to use. This can help you keep the account open and preserve your credit history without incurring unnecessary costs.

Inform the Issuer of Your Intentions

In some cases, if you're concerned about an account being closed due to inactivity, you can contact the issuer and let them know you intend to keep the account open and will use it periodically. While this isn't a guarantee, it might influence their decision-making process, especially if you have a good history with the issuer.

Example Scenario for Product Change

Let's say you have a travel rewards card with a $95 annual fee that you rarely use because you're not traveling as much. You also have a basic rewards card from the same issuer with no annual fee. You can call the issuer and inquire about converting your travel card to the no-annual-fee rewards card. If approved, you keep the same account number and the same credit limit, preserving your credit history and utilization ratio without paying the annual fee.

When to Consider Closing a Credit Card

While the general advice is to keep unused credit cards open, there are specific circumstances where closing an account might be the right decision. These situations usually involve significant annual fees, high interest rates, or cards that are actively causing financial strain.

High Annual Fees

If a credit card carries a substantial annual fee that you are no longer getting value from, closing it might be a sensible choice. For example, a premium travel card with expensive perks might not be worth the fee if your travel habits have changed. However, weigh the annual fee against the potential negative impact on your credit score due to reduced credit utilization and average age of accounts.

Cards with High Interest Rates

If you have a card with a very high Annual Percentage Rate (APR) and you find yourself carrying a balance, it might be more financially prudent to close it and consolidate debt onto a card with a lower APR or a personal loan. However, this should be a strategic decision, considering the impact on your credit score. If you can pay off the balance and keep the account open without carrying debt, it might still be beneficial.

Fraudulent Activity or Security Concerns

If you suspect your credit card information has been compromised, or if the issuer has a history of poor security practices, closing the account might be a necessary step to protect yourself from fraud. In such cases, the security of your financial information outweighs the potential impact on your credit score.

Behavioral Spending Issues

For individuals who struggle with overspending, having too many available credit lines can be a temptation. In such cases, closing some of the more accessible or unused cards might be a responsible step towards better financial discipline. However, it's crucial to understand the credit score implications and potentially implement other strategies to mitigate them.

Comparison of Closing vs. Keeping a Card

Below is a simplified comparison to help illustrate the decision-making process:

Current 2025 Recommendation: Financial advisors in 2025 generally recommend keeping older, no-annual-fee credit cards open, even if unused, due to their positive impact on credit utilization and history length. Closing cards should be reserved for situations with high fees or significant financial risk.

Conclusion: Your Credit Score and Inactivity

In summary, not using your credit card does not automatically tank your credit score. However, it creates a significant risk of negative consequences, primarily through the potential closure of the account by the issuer. This closure can lead to a higher credit utilization ratio and a shorter average credit history, both of which are detrimental to your score. The presence of an unused credit card, especially an older one with no annual fee, actually contributes positively to your credit profile by increasing your total available credit and the average age of your accounts.

The key takeaway is that inactivity is the enemy, not the card itself. To maintain a healthy credit score, it's advisable to make small, regular purchases on your unused cards and ensure the balance is paid in full each month. This simple practice keeps the account active, prevents closure, and continues to benefit your creditworthiness. Only consider closing a card if it carries a substantial annual fee you don't benefit from, or if there are significant security or behavioral spending concerns. By understanding these dynamics, you can strategically manage your credit cards, even the dormant ones, to your financial advantage.