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An Easy Way to Keep an Old Credit Card Open

An Easy Way to Keep an Old Credit Card Open

Keeping old credit cards open can help improve your credit. However, if you don't use the card enough, the card issuer may cancel your account without your knowledge. If you want to avoid this, keep using the card once in a while.

Keeping your old credit card open has its perks. The two main reasons you might want to do this are:

  • It can help strengthen your credit history.

  • You can increase the amount of available credit you have.

The length of your credit history is 15% of your FICO® score. Older active accounts can help improve the average age of your credit history and show that you've been managing your credit for longer, which lenders like to see.

The credit utilization rate is the amount of available credit you use and represents 30% of your FICO® score. If you have more accounts open, it can increase the amount of credit available, which can help lower your credit utilization rate. Next, you will need to monitor the amount of available credit you use; less is more.

Keeping Old Accounts Open Can Improve Your Credit Score

Your credit score can affect the financial opportunities available to you, so making decisions that positively impact your credit is essential. Keeping an old account open is an excellent decision to make.

Some old credit cards don't have an annual fee, which can count as some of the benefits of keeping your account open. However, you don't have to use the card for everyday purchases because it probably won't earn rewards like your credit cards. But there is an easy way to keep your account open.

Use your old credit card to pay a bill.

An effortless way to make sure you don't forget to use your old credit card is to use it to pay a recurring bill. You can put one of your accounts on automatic payment, and your card will be debited monthly. Since your account will run regularly, it will appear on your credit report.

For instance, you can use this card to pay your monthly Spotify bill. You can set it up for autopay, so you don't have to worry about card usage.

Since you are not expected to remember to use that credit card manually, the account stays active without you always using it. Also, you can set up an automated payment with your credit card issuer to pay your credit card balance in full each month. These actions can help you eliminate forgetfulness.

Should I keep an old credit card open?

Keeping an old credit card account open can be beneficial. If you have an old card with an annual fee, you can ask the card issuer to reduce the card's eligibility to an annual fee of $0, so it costs nothing to continue to use it. 

When you use your old card for small purchases, you can keep your account open so that the activity on the account is reported to the credit bureaus and continues to appear on your credit report.

If used in the right way, credit cards can be a powerful personal finance tool. 

Key Points to remember

  • An old credit card can help improve your credit score by increasing the amount of available credit and the length of your credit history.

  • Using your credit card to pay a monthly bill is an easy way to keep your account active.



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