How This Could Affect Your Credit Score
Having your credit card closed due to inactivity can be a serious inconvenience.
Not only will you need to forfeit your flyer miles and other benefits, but your FICO score could drop if your credit utilization goes up suddenly.
Credit utilization accounts for 30% of your FICO score, and you’ll want to keep your utilization under 30% to avoid seeing a drop in your numbers.
If one of your credit cards is closed unexpectedly, your total available credit balance will fall.
As a result, the amount you owe on your cards will make up a higher proportion of your total credit limit which could trigger a drop in your credit score.
How A Spreadsheet Can Help You
So far we’ve highlighted the negative consequences of having one of your credit cards closed. But there’s good news too.
You can avoid this inconvenience by simply keeping track of all your credit cards and making sure that you use them frequently enough without running up unnecessary debt.
Spreadsheets can be extremely useful in tracking your credit card usage.
By using software like Excel or Google Sheets, you can set up a simple file that lists all your credit cards by name.
You can list each card’s balance and payment due date and create a column where you can indicate the last time you used it.
If you don’t feel like entering the date when you last used one of your cards, and if your balances are close to zero, you can make a note of the last time you made a payment on each card.
If you’d like to keep your cards active without having to check them manually, you could opt to charge recurring expenses like your Netflix subscription to it instead.
Keeping your credit cards open is simply a matter of tracking your usage and making sure you charge expenses to each of your cards, at least every six months to a year.
To avoid the loss of benefits and a drop in your FICO score due to credit utilization, you may want to create a spreadsheet that lists all your credit cards to keep track of when you last you used them.