Do Credit Card Accounts Close Automatically?

If you have a credit card account you haven’t used for some time, there’s a chance you might lose it.

Many people have old credit cards sitting untouched in a drawer, but do credit cards automatically close if you don’t use them? What are the reasons you might consider closing an account yourself?

Do Unused Credit Card Accounts Close Automatically?

It is possible that a credit card issuer will close your account if you don’t use it. It’s more likely to happen if you haven’t had a balance or any transactions for a year or more. There are no set time limits and it’s entirely at the discretion of the credit card issuer, so timescales on unused credit card accounts automatically closing can vary, with no guarantee that they will.

The best way to make sure your card stays open is to use it occasionally, at least once every few months to show the issuer that you are still an active card user. Your credit card accounts will not close automatically if you are still an active user with a balance on the account or you haven’t requested a closure.

Why Do Issuers Cancel Cards?

If a customer chooses not to use their card anymore, or the behaviour of the customer suggests that the credit line is no longer needed, the provider can choose to close the account and is able to allocate the credit line to a potential customer that can benefit from and make use of the card.

Does Automatic Credit Card Account Closure Matter?

Credit card account closure isn’t necessarily a problem if you don’t use the card or need it. Yet there are some reasons you might want an unused account to stay open:

• Having the credit easily available might be useful in the event of an unexpected cost.



• If you use another credit card, closing the account increases your credit utilisation. This means any balance you have is a higher percentage of your available credit. Depending on your circumstances, high credit utilisation on just one card could harm your credit score.

Being Told Your Credit Card Account is Being Closed

An issuer will give you notice before they close your account.

When they give you advance notice, they may give you the option to take action to prevent it from being closed.

Closing Your Own Credit Card Account

Here are some reasons that closing an unused credit card account might make sense:

• Depending on your circumstances, having too much credit available can make it harder to get other credit, such as loans or mortgages.



• If you have serious debt problems, the extra credit available might increase the risk of running up more debt if you are struggling to manage your finances.

If you decide to cancel a card, make sure you’ve paid off any remaining balance and then tell the provider, either by phone, in writing, or both.