You decided to get out of debt a long time ago. You’re currently watching what you spend and choose cash over any other form of payment. It’s been months since you swiped. An inactive credit card is no big deal, right?
Reopening an inactive credit card
If your credit card is on the line of cancellation because of inactivity, call your credit card issuer if you wish to keep it open. Keep in mind, once an inactive credit card closes, most issuers won’t reopen it. They are more likely to insist on establishing a new line of credit under updated terms.
Having accounts with a balance, but with a zero credit limit, could negatively affect your credit score. One could interpret it as having debt with an issuer that is no longer willing to lend. There isn’t a way to indicate on a credit report that the limits closed due to inactivity.
Should you say goodbye to credit?
Now comes the next question. If you are vowing to be debt-free, should you say goodbye to credit? As of last year, 45 million Americans said, “Yes.” The situation varies amongst households, and you have to make a plan for it.
People without credit scores generally won’t qualify for a conventional loan. However, if you established good credit in the past, and decided not to build it anymore, your circumstances may be different. Do you need to purchase a home or car shortly in the future? Do you have the cash to do it? Resolving not to use credit is a big decision. Achieva offers an excellent rate with great benefits, be sure to start your line of credit the responsible way.
Preventing an inactive credit card
Preventing an inactive credit card is easy. Most people set up a reoccurring bill under an automatic payment structure, and voilà. Remember that every revolving balance comes with interest, but the benefits of preventing an inactive credit card outweigh the costs.
If you have credit cards that you haven’t used in a while, consider this article. For additional conditions or terms, call your card issuer directly. The more you know, the better you can stay informed. Credit, when used wisely, is a good thing. Letting it go inactive may not be.