Banks can close your cards if you don't use them enough, but you can prevent this by using a simple spreadsheet
- I created a spreadsheet to manage my family's rewards credit cards to make sure we never miss a payment. It worked until one of my credit cards was closed because I hadn't used it in a while.
- When a credit card account is closed, it can negatively impact your credit utilization and your average age of accounts, two important factors that determine your credit score.
- I tweaked the spreadsheet to include the last time I used a credit card. If I haven't used a card in the last six months, I make it a priority to use that card for a purchase.
- Another method for making sure none of your cards are closed for lack of account activity is to set up a recurring payment, such as a streaming service subscription.
As credit card rewards enthusiasts, my wife and I have over a dozen cards. With each new card, we earn a sign-up bonus for meeting a minimum spending requirement in the first three months. After that, we continue using the cards when they offer great rewards in a certain category, like groceries or dining.
We don't use every single card on a regular basis, though. I generally use the Citi® Double Cash Card the most, along with the Chase Sapphire Preferred® Card and the Chase Freedom and Chase Freedom Unlimited.
With a growing number of credit cards, we wanted to make sure we didn't accidentally miss a payment. To help with this, I set up a credit card bill-tracking spreadsheet and I update it couple of times each month.
My credit card-tracking spreadsheet
The spreadsheet tracks the following:
- The credit card name
- The date the statement is usually issued
- The date the bill is normally due
It also has a column for each month, so I can mark that I checked the bill and made a payment, if necessary.
I thought the spreadsheet was working as planned to keep my credit score in great shape until something unexpected happened ...
One of my cards was closed because I hadn't been using it
A few years ago, a credit card company notified us that it was closing one of our cards because we hadn't been using it. I'd heard of companies doing this before, but never experienced it myself before this incident.
Having a credit card closed can negatively affect your credit in a few ways. First, it can impact your overall credit utilization, or the amount of credit you use divided by your total credit limits. This is a factor in the second-largest portion of your FICO score, called amounts owed.
In my case, this didn't do any significant damage because I always pay my cards off in full. Had I been carrying a large balance on my other cards, though, this could have done considerable damage to my credit score.
The other part of my score that could have been affected was my length of credit history. This is a smaller portion of the FICO scoring formula but it still accounts for 15%.
By having a credit card closed, my average age of credit accounts decreased. Due to the large number of credit cards I had, this wasn't a major negative impact, either. That said, people with only a couple of credit cards could see their scores drop significantly if one of their older cards gets closed.
My updated spreadsheet to avoid credit card closures
I tweaked my credit card-tracking spreadsheet to avoid having other cards meet the same fate. Rather than simply mark that I had taken care of a bill for the month, I now input one of two phrases.
- I input the word "Paid" for bills that had a statement balance and were paid in full.
- The other option is "No Balance" for cards that didn't have a statement balance and did not require making a payment.
To make this even easier to see, I fill the cell color green for "Paid" bills and yellow for "No Balance" bills.
This new method of marking my credit card spreadsheet each month gives me a visual representation of the last time I've used a card. If the word "Paid" is not marked within the previous six months, I make a priority to use that card for a purchase in the coming month.
After making a purchase, I wait for the statement to generate with a balance due so the activity reports to the credit bureaus. Then, I pay the card off in full and mark it "Paid" for that month. I haven't had a credit card closed due to non-use since implementing this new method.
If you want to avoid having a particular card closed due to inactivity, you can also set a recurring payment, such as your Netflix subscription, on a card. This way, the card gets consistently used every month. Just don't forget to pay the bill on time if you don't use the card for other purchases.
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