Many people have accumulated a wallet full of rarely-used credit cards. After signing up for a few airline mile rewards cards, cash back promotions, etc., it’s not uncommon for Americans to have 20 or 30 cards in their name, and to use only one or two of them. Canceling unused cards that charge an annual fee is a no-brainer (unless you enjoy throwing your money away).
But as financial site TheStreet.com explains, if you’re counting on those unused lines of credit in case of a financial emergency you should make sure the credit card companies don’t decide to drop you as a customer:
Most companies review an account that’s been inactive for more than a year — meaning no charges or transfers during that time. The reason? It costs companies just to manage an account, even an inactive one.
“We recommend that consumers who are saving a card for a rainy day should use the card several times per year, and pay the balance back in full that month.”
Keeping older cards can also help your credit score, which is based in part on the length of your credit history. Read the whole article to find out more.
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[...] be canceled without warning, leaving you without options. And if you already have several cards, don’t let them go unused for too long, as inactive accounts are more likely to be closed. Finally, keep in mind that if you’re [...]