Watch Out for Credit Card Inactivity Fees

By now, you’ve probably heard about credit card issuers paying customers to close their accounts in the wake of one of the worst credit collapses in history.

But the latest move by card issuers is quite the opposite; some are charging customers inactivity fees for dormant credit card accounts.

That’s right, if you fail to use your credit card for a certain period of time, you may be slapped with a fee (in the ballpark of $20) to keep it open.

Of course, it hardly seems worth paying it, given the fact that most credit card issuers do not charge inactivity fees.

However, some consumers have been led to believe that closing a credit card will do serious damage to their credit score, so they may hold off.

And though your credit score could fall as a result of a closed account, it probably won’t mean a whole lot if it’s a card you seldom use.

Additionally, there’s no reason you should pay a fee to keep your credit card open, regardless of the credit scoring impact.

If you feel you must keep it open, consider using the dormant card to pay a recurring monthly bill such as your gym membership or cell phone bill to avoid the inactivity fee.

Remember, the older the card account, the more value it has in terms of credit scoring, so don’t fret about closing a newer credit card.

And if you’ve got plenty of solid credit history, the “damage” to your score will likely be minimal if at all negative (Should I close my credit card account?).

Tip: Keep an eye out for changes to your credit card terms as issuers look to charge new fees to offset the impact of the recently passed Credit Card Bills of Rights.

Related Topics:

1. No More American Express Gift Card Inactivity Fees
2. Watch Out for Multiple Balance Transfer Fees
3. Should I Close My Credit Card Account?
4. Watch Out for Hefty Balance Transfer Fees
5. Let Us Cancel Our Credit Cards Without Fear