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Keep Your Credit Card Active and in Good Standing

At O1ne Mortgage, we prioritize your financial well-being and aim to provide you with the best advice to manage your credit effectively. If you have a credit card that you rarely use, it could be at risk of being canceled by the issuer. However, with a bit of planning, you can keep your credit card active and in good standing. Here are some tips to help you maintain your credit card account:

1. Set Up Recurring Payments

Consider using your credit card for recurring payments. Small bills, such as streaming or music subscriptions, can demonstrate to the card issuer that the card is still in use. If you have multiple credit cards, distribute small recurring charges among the less frequently used cards. This ensures that all your cards remain active.

2. Make Small Purchases Regularly

You don’t need to spend a lot to keep your card active. Even small purchases, like buying lunch or coffee once a month, can show activity on the card and help you avoid cancellation. Designate certain cards for specific types of infrequent but regular purchases, such as pet grooming, to ensure they get some use. Light use also helps keep your credit utilization low, which can positively impact your credit score.

3. Call the Credit Card Issuer

If you find that a particular credit card no longer suits your needs due to high fees or rewards you don’t use, consider calling the issuer. You might be able to downgrade to a more suitable card while retaining your credit history and available credit, which are important for your credit utilization ratio and overall credit score.

4. Pay on Time

Timely payments are crucial for maintaining your accounts in good standing. While late payments may not immediately result in cancellation, they can significantly damage your credit score. Paying on time and in full helps you avoid interest charges and builds a strong record of on-time payments. If you face a temporary setback, contact the issuer to see if you qualify for a hardship program or other accommodations.

The Bottom Line

Maintaining your credit health involves keeping your cards active and in good standing. Inactivity can lead to account cancellation, which may negatively impact your credit score by reducing your overall credit limits and potentially lowering the average age of your credit accounts. Unless there’s a compelling reason to close your credit card, it’s generally better to keep it open, even with minimal use.

For any mortgage-related needs, feel free to call O1ne Mortgage at 213-732-3074. We’re here to help you make the best financial decisions.

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