Points of View: Can I stop using my card after I earn the sign-up bonus?


You’ve heard us say that the best way to earn lots of points and miles is to “always be working on a sign-up bonus.” Thus, if you earn points from one credit card’s welcome bonus, you may open another credit card and start using the second one for all your purchases.

But what should you do with the first card? Is it worthless, relegated to the sock drawer now that you’ve earned the sign-up bonus? Should you stop using the card or even close the account?

Here’s a look at whether you can — or should — stop using a credit card after you earn the sign-up bonus.

Related: Should I cancel my credit cards if I don’t use them anymore?

Can I stop using my card after I earn the sign-up bonus?

In short: Yes, you can. Should you? No.

That’s because your account may become “inactive” if you stop using your card. Along with not reporting activity to your credit report, there are other issues you should note.

First, the bank may close your account. If you aren’t using it, you may not need it — that’s how they see it. Unused accounts don’t make money for the bank but incur risks.

What risks? You’re less likely to monitor accounts you aren’t using since there’s no bill to pay. Therefore, you may be less likely to notice fraudulent charges on your account — and therefore, the situation can spiral out of control before you notice.

Related: Credit card fraud: How to spot and report it

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If you have credit cards you aren’t using often, it’s worth setting alerts to notify you of any transactions on those cards.

Additionally, if you’re only using your credit card to earn a sign-up bonus and then ignore the card afterward, you risk upsetting the bank that issued the card. This could make it difficult to earn future welcome bonuses, as the bank may not approve you for future accounts.

A perfect example is the welcome bonus eligibility tool from American Express. It states that the bank may evaluate not just your credit score but also your past banking activity with Amex to decide whether you can earn a welcome bonus from future credit card applications.


Reasons to keep your accounts active

Thus, it’s worth keeping your accounts active to ensure you keep your cards open, improve your credit score and increase your chances of earning more welcome bonuses. It’s also worth keeping your accounts open to enjoy your cards’ benefits.

While you may think of tangible credit card perks like lounge access or companion tickets, there are other benefits to credit cards that require your account to be active.

First, the terms of credit card rewards programs state that your account must be open and in good standing to earn rewards. That means your account can’t be in default or closed from inactivity; otherwise, you could forfeit any points or cash back attached to that credit card.

Second, your credit card’s travel and purchase protections only apply when you use that card for a purchase. Having a credit card with world-class travel insurance is only beneficial if you use that card to pay for your trip — and you can’t do that if the account is closed for inactivity.

Lastly, consider the impacts on your credit report if your account is closed. Not only will your account stop aging (which means you won’t improve your length of credit history), but if it’s listed as “closed by issuer,” it could also leave a negative impression on your credit report when you apply for credit in the future — whether that’s for opening a credit card, buying a car or buying a house.

Related: Debunking credit card myths: Does canceling a card I don’t use help my credit score?

How to keep your accounts active

If you want to keep your accounts active, use your credit cards. But what about working on those new account sign-up bonuses? Won’t putting purchases on other cards slow down your progress toward the bonus?

You don’t need to spend heavily on all your credit cards. Instead, a few dollars to show signs of life can be sufficient.

For example, I have an alert on my phone to remind me to swipe my lesser-used credit cards every three months. I buy inexpensive items at a convenience store or even reload my Amazon balance with as little as $1.

This doesn’t guarantee that the bank won’t close your account or reduce your credit limit. Each bank sets its own policies on determining risk. However, your chances of keeping your accounts open are greatly improved by spending on cards a few times a year.

Related: How to avoid red flags with credit card issuers


Bottom line

Once you receive the welcome bonus on a credit card, you may move on to the next card to earn another bonus. While you may use that first credit card less often, keeping the account active is worth it.

Luckily, doing so isn’t difficult or costly. You can drastically reduce how much you use a credit card, but you shouldn’t completely ignore any of your cards.

Editor’s note: “Points of View” is a series evaluating decisions on which credit card to use. If you’re facing a dilemma about which card is best for an upcoming payment, email us at tips@thepointsguy.com with the subject line: “Points of View question.”

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