So I have 9 credit cards that are open and active according to my recent credit report. Out of the 9, I only use 2, 1 is my primary card and the other is a backup. By habit, all the other cards just sit in my desk, never activated. I just figured it’s better that way.
So today, I decided to do some investigative work and discovered much advice on the internet, such as:
- “The account is already open and reporting to the bureaus. Activating it is merely a formality to enable you to use it for purchases. Many companies will automatically activate it after a certain period of time (scary, huh?) anyways. Just shove it in a drawer.”
http://www.fatwallet.com/forums/finance/718734/?start=0 - “You have a line of credit with that company now regardless of if you use the card. Not using it does not cancel the credit that they have for you. You would need to call them to cancel it which I would suggest you do if they have a membership fee they would charge you. ”
http://archive.slickdeals.net/showthread.php?t=691477 - “If you don’t use the card, the creditor will eventually close the account for inactivity — probably after 9 months or so. “
- “You can’t use it. If you don’t want it, call the credit card company, tell them….and cut it up with scissors.”
http://answers.yahoo.com/question/index?qid=20081205174204AAXi9bj
Although I learned that not activating a card will still affect your credit score and not activating it will keep the account open. None seem to directly address whether to activate or not if you’re just not going to use it. So, I figured I’d post my thoughts on it…
If I have a credit card that I know I’m never going to use, I will:
- Not activate the card. In theory you are less liable to fraud as the card and number will be unuseable. Not confirmed.
- The card will remain open and affect your credit score, usually in a positive way. I have about $170,000 in credit card credit available, generally using about $2,000 of it per month. I pay off my credit cards every month. I do believe having excessive credit can be a bad thing, just like having not enough. If you have any ideas to find this “sweet spot” let me know. :) I think I have too much, but my credit score sits at 812 or so.
- Cut it up! I actually haven’t done this, but it’s a good idea. One more way to prevent someone from using them if they get stolen.
By the way, I have not found that they cancel your account after 9 months of inactivity. One of my credit cards has been inactive for almost 10 years! Also, I did not receive a replacement card when I did not activate my cards. I am unsure how true the feedback that banks will “auto-activate” your card for you is. That seems like a really bad idea. I should test that theory out on some of my cards.