About account closure for inactivity

If you leave a credit card unused for a long time, it can indeed be closed for inactivity. I’ve personally had credit cards from BofA and Deserve closed this way. When I first got a closure letter or an alert from a credit bureau, I was pretty shocked. I thought I had done something wrong and that was why the card was closed. Later I realized it was simply because the card had been sitting in a drawer for a very, very long time without being used. If you look at it carefully, having a card closed for inactivity does have some downsides, but for people with a long credit history, the impact is actually very small.

From the bank’s perspective, if a customer does not use a card for a long time, then in theory that customer has no value to the bank. If the card is not used, no interest can be generated, and the bank cannot collect swipe fees from merchants. At the same time, the bank still has to store your personal information and reserve part of your credit line for you to use. Banks may have their own internal algorithms showing that if a customer has not used a credit card for 12-24 months or longer, the probability of future use is low. In that case, forcibly closing the card has little impact on the customer and little cost to the bank.

Below, I’ll go over the issues related to credit cards being closed after long periods of inactivity from several different angles.

Rules by bank

Different banks handle inactive credit cards differently. The main differences are how long it takes before they close the card and whether they allow reopening. However, one point is consistent:

  • Cards with annual fees generally will not be closed just because you do not use them!

After all, charging and paying the annual fee counts as account activity, so there is no need to worry that those drawer cards with a Free Night benefit will be closed just because you never use them.

The rules summarized below are based on DOC, with my own experience and other data points I’ve seen online added in.

American Express

AMEX does not have one universal closure rule, but the system appears to review accounts roughly every 13 months. If there has been no activity and the system decides to close the card, it may simply shut it down directly. Some people, however, do receive a warning email saying that if they still do not use the card, it will be closed within 35 days.

I have held the no-annual-fee AMEX Everyday card for a long time, and it has probably gone more than a year without any spending, but I have never received a closure letter or warning. My guess is that AMEX may look at all of a person’s accounts together. If you already have multiple annual-fee cards with them, they may be less likely to suddenly close one of your other cards.

If your card really is closed, you can contact AMEX to reopen it. Reopening does not involve a Hardpull, and you may even be able to keep the same card number. If you want to reopen it, it is best to do so within 30 days of closure, though some say 90 days or even a year may still work. If you think you still need the card, of course the sooner the better.

Bank of America

If your BofA card is not used, it may be closed after 24 months. You will receive a letter from BofA 30 days in advance telling you to either use the card or have it closed. That said, some cards are not closed until they have been inactive even longer.

I personally had BofA close my once-amazing Better Balance Rewards card—yes, the one that used to give $120 a year. I was just too lazy and never completed the required spending each quarter, and then eventually I got the closure notice... oh well. In addition, a family member had a Customized Cash card closed for the same reason: too many cards, and this one just sat there unused. It was indeed closed after about two years. Since there were already plenty of other cards, we did not bother with it. So this is a reminder for those holding BofA no-annual-fee cards: they really may close them without much mercy.

If you want to reopen a BofA card, you generally need to contact BofA within something like six months, and there is a Hardpull involved. So unless you have a special reason, it is usually not worth reopening.

Barclays

Barclays may close a card after 18 months or two years with no activity, and they may give you advance notice.

I personally have only held one of their AA cards with an annual fee before, and I later closed it myself. My impression is that their no-annual-fee cards do not seem especially worth keeping.

There does not seem to be any consistent pattern for reopening, so check with customer service.

Capital One

Capital One generally does not close inactive cards quickly. Reportedly, they may decide what to do when your current card is close to expiration; if it expires and they see that you have never used it, they may simply not send you a new card. Some data points also say it may take 3-4 years before closure.

I do not have any cards from them, so I cannot comment much. Their no-annual-fee cards are not especially distinctive. If you are going to apply, you might as well go for the annual-fee Venture X.

There are not many successful reopening examples.

Chase

Chase does have some inactivity-related closure patterns:

  • If your card has had no activity for more than a year and it is about to expire, they may not send you a replacement card.
  • Before closing the account, they may contact you to ask whether you want to keep it open.
  • It may also be closed after about two years of non-use.

I personally have multiple Chase Freedom cards, and they have probably gone unused for over a year, but I do not think I have received any closure notice. If I did get one, I definitely would not want those cards closed.

For reopening, you generally need to contact them within 30 days, though longer timeframes have also been reported.

Citi

A Citi card may be closed after 25+ months of inactivity, and there may be an advance warning.

Citi shut me down across the board a long time ago, and I have no intention of reopening anything there.

Within 60 days, you may be able to contact customer service to reopen the card.

Discover

A Discover card may be closed after 18 months of inactivity, and they may send you a letter 30 days in advance.

I’ve always used it for the quarterly 5x category on Amazon, so I have never experienced this myself.

Discover does not allow reopening.

FNBO

FNBO may send a letter in advance telling you the card is going to be closed.

I’ve had them close one of my cards before—a former gem that had no annual fee and gave an easy $100 reimbursement every year.

Deserve EDU

Mine had gone unused for almost two years. At first they sent me a message saying the card had already been closed. Unexpectedly, a week later they sent another message saying they had proactively reopened it for me. My guess is that they saw my card kept receiving referral credits, and money was still continuously flowing out, even though there had been no purchases at all. Hahaha.

Others

  • US Bank: There is no exact information. It seems they do not close cards very aggressively, though some data points say they do send advance notice.
  • Wells Fargo: A card may be closed after one year of inactivity.

What impact does this have?

After a card is closed, your credit report may show language such as product closed by issuer. But based on actual experience, this does not seem to have much impact on future credit card applications. I’ve had both BofA and Citi close cards on me before, and I had no real problem applying for cards from other issuers afterward. My personal view is that if you later apply for another credit card from the same bank, a reconsideration specialist may ask about it on the reconsideration call. You can just say you forgot to use the card at the time, and now that there is a good card available again, you want it.

Also, if your credit history is short, having a card closed may have a slightly bigger impact. Mainly:

  • If a very old card is closed, your average age of accounts may decrease.
  • Your total available credit will decrease, meaning you lose the Credit limit from that closed card.

If your history is already long, there is usually little to worry about here. The effect is basically the same whether the bank closes the card or you close it yourself.

How to avoid having a card closed

The simplest solution is just to use the card once in a while.

For drawer cards, my suggestion is to add them to Amazon, or at least keep a record of the card information. Every year on January 1, take them all out and reload your Amazon balance by $5 on each card, then pay them all off on January 10. That is all you need to do.

If you want to get a little more creative and try to take advantage of a small balance from the bank, you can also see:

If you receive an email or letter saying your card is about to be closed, the easiest fix is to go use it on Amazon right away. If you cannot find the card, contact customer service. In general, if customer service replaces your card, the system is probably less likely to turn around and close it again on its own...

How to find out whether a card has been closed

Just log in to your online banking account; a closed card should be clearly indicated there. If you are lazy like me and do not want to check every card one by one, then I recommend signing up for Credit Karma. If your card closure shows up on your credit reports, it will send you an alert. You will probably receive the email around 30-60 days after the card is closed.