Is there any advantage/disadvantage to having a credit card I never use?

Factual Questions
1

I mean, from a credit history standpoint. Would closing the extra account be better for my credit score? Or is it better to have more available credit?

2

How long have you had the credit card? One of the most important items on your credit report is length of open accounts. If you are closing an account you have had for awhile that might be a bad idea, even if you never use it. If you are closing an account you opened at Mervyns this weekend to save 25% that is probably different.

If you have acquired too many accounts in a short period of time maybe yes. Otherwise, probably not. The optimum number of credit cards is around 3 to 6.

Available credit is good. But, too much in a short amount of time is bad. If you all of a sudden have $20,000 in revolving credit when you only had $500 before that may hurt your score.

So, I would probably consider when closing the account:

  • Have you had the account for a long time? If so leave it open.
  • What is the percentage of this account to your entire available credit? If it is a large percentage leave it open.
  • Do you have too many revolving accounts acquired in a short period? Your credit report will have this as a reason listed in factors impacting your score if this is the case.
3

I have three credit cards, counting this one. I’ve only had it for a couple months or so, whereas the other ones I’ve had for several years. It’s got a lower spending limit than my other cards, so it’s about a 12th of my total credit. I mainly opened it to get a discount on a fairly large purchase, and haven’t used it since.

So, I guess I should close it? (Since it’s a small part of my credit and I only got it recently.) Or, since I only have two other cards, is it better to have an extra even though I don’t use it? Or would it be better to charge a little to it each month and pay it off?

4

I saw my credit report a few months ago, and my only ding (yay me!) was that I had more than two active credit lines, because I have three credit cards. It’s a very very small ding though, so it may or may not matter, depending on your situation.

5

I think it would be hard for someone to give you a factual answer on this one. You just got it recently and it is not a significant amount of your available credit so it probably isn’t affecting your score right now.

Any answer would be a personal opinion. There isn’t a good solid reason from the credit score aspect either way, just your personal preference. You certainly don’t have too many cards.

Up to you again. You have other credit cards you can charge and pay off.

So the answer is going to depend on your personal financial preference. Unless you miss payments or charge it up it won’t significantly affect your credit score in the near future.

6

Yes, it can be a problem.

We were turned down for credit, with the explanation that we had “too much debt.” I argued the point, and they told me that all unused credit on our credit cards was counted in our debt total. We ended up closing one credit card account and asking the other two to lower our credit limits. Our credit score went up, and we were granted the loan.

7
      • Just be sure to look at the statement every month, to make certain that no charges have been put on it. People can steal your CC info online directly from the banking and retailer’s systems now, while they are half a country or even half a world away.
        ~
8

Wow, that’s odd. I guess the credit system is completely byzantine, as I had my credit score go up when I secured additional credit and my total balances were a lower %age of my total credit.

I’ve always been told never to close out my cards, but I guess different situations produce different results.

9

Take it from a victim of identity theft. I was advised to close all the charge accounts I wasn’t actually using.