For many of us, even though we probably only need two credit cards (or three) at the most, there’s still the temptation to keep one in reserve. However, you should be careful. An unused credit card can be a hidden problem for your credit score. So, before you end up needing debt modification and relief for credit card woes, here are some tips on unused credit cards.
Charges – You should ask the credit card company if the card has inactivity fees and charges if you do not use the card for a considerable length of time. If there are no additional charges, then you can probably keep it in reserve.
Temptation – On the other hand, there is no reason to keep an unused card around if you are trying to prevent yourself from spending too much money. In such a case, even if you could use a spare card, the chances of you overspending may outweigh the benefits of a spare credit card.
Account closure – It’s becoming more frequent that banks now close inactive accounts, since whether or not you’re using these cards, they still have operational costs to cover. The kicker here is that your score will be affected, regardless of who closed the account. Therefore, it’s a good idea to use the card every now and then, if only to prevent involuntary closure.
Reputation counts – If your credit history is good, you shouldn’t worry too much if your spare credit card is closed down. While the drop may be considerable, it also takes into account how good your credit history is. In that sense, the drop may only be temporary. And of course, you should still responsibly pay the charges for the unused card.
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