Keeping a credit card unused might seem harmless, but it can impact your credit score and lead to account closure. Here’s what you need to know.
What Happens to Inactive Credit Cards?
1. Dormancy & Closure: If your credit card remains unused for 6-12 months, the issuer may declare it dormant and even close it. They usually send a notification before taking action.
2. Impact on Credit Score:
- Closing an old card reduces your credit history length and total available credit.
- This can increase your credit utilization ratio (credit used vs. total limit), lowering your credit score.
3. Loss of Rewards & Benefits:
- Unused cards mean missing out on cashback, rewards, and lounge access.
- Some reward points expire if the card remains inactive for too long.
4. Fees & Inactivity Charges: While most Indian banks no longer charge inactivity fees, always confirm with your card issuer to avoid surprises.
What Can You Do About It?
- Use Your Card Periodically – Even a small transaction every few months keeps it active.
- Monitor Statements & Notifications – Stay alert for any account status changes.
- Contact Your Bank – If you don’t need a card, close it carefully, especially if it’s an old account or has a high limit.
- Revive Dormant Cards – If blocked due to inactivity, check with your bank for re-activation steps (may require KYC).