Reasons Why You Should Not let Your Credit Card Become Inactive

Posted on : 24-01-2010 | By : admin | In : Credit Cards

Tags: Card, Credit Card

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There are many changes taking place in the credit card industry; most of which are in your favor. However, there are a number of new regulations taking place, courtesy of the credit card companies, that may not be in your favor.

One of the most important new rules to consider is that not using your credit card can cost you. Most consumers were always under the assumption that having a credit card and using it only for emergency purposes was the best way to go. However, credit card companies are now changing up the rules and either charging you an inactivity fee or canceling your credit card if you don’t use it enough.

This may prove to be quite confusing, especially for consumers who were told to never cancel their credit card accounts in fear of lowering their credit score. Now, financial advisers are recommending canceling credit cards that you no longer want to use or need, as you could be facing inactivity fees if you keep these inactive accounts open,

Inactivity fees are no doubt a ploy by credit card companies to get you to start using that credit card that has been taking up room in your wallet. After a year of recession woes and credit card regulations, creditors are now finding new ways to once again encourage their credit card customers to start spending on their credit cards.

What you can do to avoid inactivity fees:

Make a point to charge a purchase at least every six months. This will prevent the credit card company from charging you an inactivity fee. Check your card’s terms and conditions regarding inactivity fees for specific details.

If you are charged an inactivity fee on a credit card you no longer want or need, cancel the card and ask that the inactivity fee be removed.

If you are considering a large purchase in the near future, don’t cancel the credit card, as this could lower your FICO score. Instead, simply make a purchase or two – and pay them off before interest can accrue.