Tuesday, March 11, 2008

Keeping Credit Cards Active (by giving away money)

A few months ago HSBC sent me a letter and informed me that they were closing my account due to inactivity. I was shocked. In the end, it wasn't a big deal because I had too many cards and was in the middle of closing a few. HSBC was on my hit list. However, it did make me worry about my other cards closing my accounts.

Since I only use one card and pay it off in full each month, I forget that my Citibank has been unused for months. After a little googling around I learned that HSBC, Chase, and Bank of America have been known to close accounts due to inactivity. Sometimes an inactive card might be your oldest, and therefore a jackpot number in your credit score. Credit card companies closing accounts willy nilly can have some serious consequences.

So last month I did some research at Charity Navigator, along with a few charities I already support, and put my previously inactive credit cards on automatic monthly contributions. I'm not sure if charging ten bucks a month will prevent them from closing the accounts, but it's not exactly like they're handing out credit cards like they used to, and I've grown fond of my credit score.


Ms. M&P said...

What a pain! I have a cc I never use too. It's a Capital One card and I figure they'll try to close it in the future. It's my oldest card so like you, I don't want to close it. I wish credit scores were based on more consumer friendly information!

PiggyBankBlues said...

if it's your oldest card i wouldn't close it until you have another card that is at least five years old. just my $.02.

just use it every few months and you should be fine. you could choose a periodic purchase, like an online store, and use the card for that. you should definitely use the Cap One card abroad, they're the only big cc that doesn't charge currency conversion fees.

asgreen said...

Wow, I didn't realize this! I have a chase card that I never use. I may try to use it once in a while now. Thanks for the headsup!

Ms. M&P said...

Ooh, thanks for the tips, PBB. I didn't know that about Cap One! I'll be going abroad this year too. What would I do without you??