When you build up a large collection of credit cards, it can be hard to balance putting charges on your cards to show the bank they are still being used. Some banks dislike inactivity and will close your account after a while.

Banks don’t like inactivity

It’s true that banks are in the business to make money. They want to make sure people are actively spending money on their credit cards. Banks make money in two main ways: via interchange fees and from customers carrying a balance. When you don’t use your credit cards, you’re not giving an opportunity for the bank to make any money. Simplistically speaking, you’re then dead weight to the bank.

While it’s simple enough to say that is the reason banks might close your account, there is a bit more to it than that. Having customers with an unused credit line is a risk for banks. They can be worried about the potential for bust-out fraud, where a customer suddenly racks up a big bill and does not have an intention to pay it. This is also why you might get those fraud alerts when you unexpectedly make a large purchase. They’re not just looking after you but themselves too!

Since you’ve proven to be an unprofitable customer and they don’t want the risk of an open unused credit line, banks will close credit card accounts. Sometimes the bank mails you a “use it or lose it” letter. I’ve also had banks close cards on me in the past with no warning. Don’t expect to receive notice as credit card issuers are not required to provide it.

What’s the impact of the closure to you?

Credit impact

Obviously, one immediate impact is to your credit score. The two main areas you’ll be impacted are your credit utilization and average length of open accounts. Clearly if the bank is closing the card, you didn’t use it much. If you are running a higher balance on other cards, suddenly it will appear to banks that you’re using up more of your total available credit. In turn, you’ll appear riskier as a potential customer if you open another line.

The average length of open accounts also can come into play, especially if the card being closed was one that you’d had for a long time. Showing that you’ve been successful in managing your open credit cards is what issuers want to see before offering you new credit. The longer you’ve been doing it, the more reliable you will appear.

Risk of losing points or benefits

Personally, the potential credit hit doesn’t worry me. I manage my credit well enough to survive the hit. What I’m more worried about is the potential loss of my points. If a bank closes your account with loads of Chase Ultimate Rewards points on it (as an example), you might decide it’s time to hit your head against the wall.

Both Chase and Citi might give you a courtesy window to use up your points or transfer them out. But if you were saving them for a particular trip, you might be forced to use them early. Or some banks (like Amex or Capital One) might not offer you a courtesy window to use your points.

Note: New York state law requires banks provide a 90-day grace period to use your points when canceling your card.

Also, to be clear, you only need to worry about bank points expiring from this. Typically you shouldn’t expect airline or hotel points to immediately expire upon termination of your credit card.

One other potential impact to banks closing your card is the loss of benefits. Sometimes even cards without an annual fee can offer decent benefits, like the United Gateway card. I’ve used this card to gain access to cardmember-only deals, like their dinner experiences.

How I ensure my cards don’t get canceled

I have five simple methods for you to make sure you don’t have to worry about banks closing your credit cards without your approval.

Buy small purchases

This seems simple enough–just go out and make a small purchase on your credit card. However, there’s a little more nuance potentially here. Some banks are fine with also forgiving the small balance if it’s generally under $2. Say one month you go out and impulse buy a candy bar from the grocery store checkout line but you buy nothing else that month. The bank might forgive that balance and you won’t have to pay your bill. It should also count as activity and the account shouldn’t be closed as a result. Just know that if you do this too much, the bank might stop forgiving the small balances.

Pay your monthly bills with different cards

I tend to pay small bills with cards that I would prefer not to lose. This might force me to miss out on a bonus multiplier, but on a $10 or less monthly bill, I don’t think the multiplier would give me a life-changing extra amount of points. You don’t need to hyper optimize every purchase with the highest earning bonus; no one is judging you.

Auto-load your Amazon account

This one used to be easier in that you could auto-pay smaller amounts. I like options where you can set it and forget it. Unfortunately, this only works for one of your cards at a time.

Splitting payments across multiple cards

This one is perhaps the most annoying option, if I’m being honest. Some online stores make it easy to split payment across multiple cards (such as Dell or AT&T). It’s simple enough just to add on more cards to your purchase, but it can be a bit annoying to enter all the card details. On the plus side, you’re buying something you need, so it’s not like you’re spending extra to keep the cards active.

Make a small recurring donation to charity

My last tip is one that I use myself. I make small recurring donations to different charities on the cards I don’t want to be closed. If given the option, you don’t have to donate monthly (quarterly is fine). Not only do you get to keep your cards active, but you can also feel good that you’re helping out a charity at the same time.

How do you keep your credit cards open?