Unused credit card?

Question

Should I ever cancel my unused credit cards? I don't use them, but I know I should keep them for long credit history, but I should close them because I have large "available credit".

Is it true that if you don't use your unused credit cards every so often, the bank will close the account?

I have approx 25k in available credit, but none of its being used...

Answer 1

In some cases closing a credit card can actually hurt your credit rating.  Part of your credit score is the ratio between available credit and and current balances.  The lower this ration is, the better.  And yes, some banks will cancel a card for inactivity.  If I may make a suggestion, take some of these cards and set up each one to pay a different monthly bill automatically.  One for electricity, one for water, etc.  You get the point.  Then just take that bill money that is already in your budget and pay off the card every month.  Since most credit cards have a 20 to 25 day grace period, its like getting a free extension on your bills every month.  Your bills are never late and all your cards show activity.  Chances are that payng off the cards every month will also get you some credit limit increases and that will help your credit score in the long run.

DON'T TRY THIS ULESS YOU HAVE THE SELF CONTROL TO ACTUALLY PAY OFF THE CARDS EACH MONTH AND NOT JUST BLOW THE CASH.

Answer 2

If you have a store (ex. Target, Victoria's Secret) card vs. a Visa or Mastercard, then you may want to cancel those. That way, if you need to apply for a loan, you don't have all that available credit out there for creditors to look at. You should keep at least 1 or 2 cards out there for emergency purposes. Maybe you could cancel some of the extra cards and increase your limit on the ones you keep.

I don't think that the bank will close out your unused cards unless you have a term contract that expired. Revolving cards stay out there until you cancel them.

Answer 3

the bank won't close them, keep them open, so if you try and get a loan, the bank or where ever your getting the loan see's those cards on your credit report.

Spending on a card and paying it off every month DOESN'T help your credit, creditors want to see at least 12 months of payments on an outstading balance on your credit report.

The best way to improve your credit is to have a balance on your card and pay it off in a year with payments a little more than what the minimum payment due is.

But, you have $25k worth of credit, so you don't really need help improving your credit too much, you already have good credit.

Answer 4

I wouldn't close them - it's helping your credit history - use it one a year, and pay it off.

as long as you have a good credit score I wouldn't worry

I would LOVE to have that much available credit