Do I need to use all of my credit cards, especially the oldest, every month to build credit?

Question

I understand that it's important to keep my longest line of credit open, which is about 5 years. However, I really don't like using that credit card for logistical reasons (out of state bank, etc.) I use other credit cards regularly for all my expenses. My credit score seems good. Looking at my credit report with Experian, it looks like the oldest card has lots of "paid ontime" records, although the last time I used it was 2013.

I'm wondering if I can just cut up the card and keep the account open? Or is there some reason I need to use all of my cards to keep building credit.

Answer 1

If you look around online and read about credit scores, you'll find all kinds of information about what you should do to maximize your credit score. However, in my opinion, it just isn't worth rearranging your life just to try to achieve some arbitrary score. If you pay your bills on time and are regularly using a credit card, your score will take care of itself.

Yes, you can cut up the card you don't like and keep the credit card account open. The bank may close your account at some point in the future because of a lack of activity, but if they do, don't worry about it. You have other accounts that you are using. Personally, I don't like having open credit accounts that I'm not using; I close accounts when I'm done with them. I realize that it goes against everything that you will read, but my score is very high and my oldest open credit card account is 2 years old. Don't let them scare you into credit activity that you don't want just to try to "win" at the credit score.

Answer 2

You don't need to use an open line of credit to help your credit score.

You didn't ask this, but another option is to not cut up the card and keep the account open, even if you don't use it. I mention this because sometimes when you are calling in or setting up an online account to service the card, you may need to have the expiration date and CVV code on hand. This has burned me a few times as I had to hunt around for a card I rarely ever use. That being said, if you are worried that you might use the card if you know it's there, then sure, cut it up.

Answer 3

You should never close a credit card account unless it has an annual fee or you are overspending on it. Open lines of credit - even un-utilized ones - have a positive effect on your credit score. First of all, they increase your total credit which helps your score. Second of all, they are always "paid on-time" which is another benefit. Finally, they increase the length of your credit history. You can keep unused credit cards forever in your drawer. They are rarely closed due to inactivity and cost you nothing.

However, if your card has an annual fee, you should close it. The potential loss to your credit score is unlikely to offset the annual fee.

Answer 4

No. I have several that I haven't used in a year or so (legacy of the time when they gave you money to sign up :-)), and credit rating's something over 800 last I checked.

Answer 5

What I do is that I set a small transaction to automatically go on the card and then set an autopayment. Example for one card is a monthly $8 donation to the local animal humane society. The autopay is set to pay in full. *Solved - card stays active. Some payers will cancel your credit card if they don't show activity.