Exercising your credit cards can keep accounts open and credit scores beefy
The world of credit cards has turned upside down since the mortgage melt down and resulting credit crunch. You used to be able to have a card or two in reserve and not worry about them becoming dormant. Not anymore. If you don’t use it, you may well lose it and not be able to open that particular credit card again.Therefore, consider using dormant cards once every three or four months. Pay the balance in full to avoid interest charges.
Automate account activity
You might link the card to one of your utility bills and have the payment automatically drafted from your bank account to make sure your card is used and always paid on time. A caveat about using automatic billing and drafting is that something could be wrong and you won’t know it until late in the game. At least open your bills to see that your utilities are consistent and correct. I once had a water leak, unknown to me because I wasn’t opening my utility bills regularly. It took me a long time to get it straightened out once I discovered the problem.
Closures count on credit scores
Your credit score can be negatively affected if your cards are closed. Even if you don’t particularly need or want a credit card, your credit score connects many other areas of your financial life. Credit scores are used for setting some automobile insurance rates, cell phone rates, for consideration on rental applications and job applications. Your score can be important to you when you least expect it. Keeping at least one credit card active and paid on time puts you in a strong position, and cycling any other credit cards you own will be worth the effort.
Disclaimer:The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Reasonable efforts are made to maintain accurate information. See the online credit card application for full terms and conditions on offers and rewards. Please verify all terms and conditions of any credit card prior to applying.
This content is not provided by any company mentioned in this article. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any such company. CardRatings.com does not review every company or every offer available on the market.
Published (Modified )