A credit card you haven't used in a long time doesn't simply sit harmlessly, waiting in a drawer, several issuers apply specific inactivity-related charges, or may close the account entirely after an extended period of non-use, worth understanding this before assuming a dormant card carries no consequences at all.
Why Some Issuers Charge a Specific Inactivity Fee
Certain card issuers apply a modest fee if a card sees no transactions over a specified period, commonly around a year, this is separate from the standard annual fee discussed in our lifetime-free versus annual-fee guide, and specifically triggered by genuine non-use rather than simply holding the card, worth checking your specific card's terms for whether this applies to your account.
Why Banks May Close a Genuinely Dormant Account
Beyond a specific fee, sustained inactivity over a longer period, commonly a couple of years or more, can lead the issuer to close the account entirely, sometimes with limited advance notice, this is worth being aware of specifically for a card you're deliberately keeping open for its credit history value, as discussed in our guide on closing a card properly, an unexpected closure due to inactivity removes this benefit without you having made a deliberate decision to close it.
A Simple Way to Prevent Unwanted Closure
Making a single small, planned transaction on an otherwise unused card periodically, commonly recommended every few months, keeps the account genuinely active and avoids both the inactivity fee (where applicable) and the risk of the bank closing it due to non-use, this is a low-effort habit worth maintaining specifically for older cards you want to preserve for their credit history value.
How to Reactivate a Card That Has Already Gone Dormant
If your card has already been flagged as dormant, but not yet closed, contacting customer care to request reactivation, sometimes as simple as confirming your continued interest in the account, other times requiring a fresh transaction, is generally straightforward, worth doing this proactively rather than waiting until you actually need to use the card and discover it's been restricted.
What Happens If the Account Has Already Been Closed Due to Inactivity
Once a bank has formally closed an account due to prolonged inactivity, reactivating the exact same account is generally not possible, you'd need to apply fresh for a new card if you want to continue a relationship with that specific issuer, similar to the impact discussed in our guide on closing a card properly, this loses the original account's specific credit history age.
Why This Matters More for Your Oldest, Longest-Held Cards
Given that account age contributes to your overall credit profile, as discussed in our CIBIL score guide, an unexpected closure of your oldest card due to inactivity is a genuinely more consequential loss than the same thing happening to a newer, less established card, worth being particularly deliberate about maintaining light, periodic activity on your longest-held accounts specifically.
Setting a Reminder for Periodic Use
A simple, practical habit is setting a recurring reminder, perhaps every three months, to make one small purchase on each card you're not actively using regularly, this small effort protects the account's standing and its contribution to your overall credit history without requiring genuinely active, ongoing use of the card.
Does a Dormant Card Still Count Toward Your Total Available Credit?
Yes, as long as the account remains open, its credit limit continues counting toward your total available credit, contributing positively to your overall utilisation ratio, as discussed in our CIBIL score guide, this is precisely why an unexpected closure due to inactivity can quietly work against your utilisation calculation, by removing this available credit from the total.
Frequently Asked Questions
How long does a card typically need to be unused before an issuer considers it dormant?
This varies by issuer, commonly somewhere between 12 and 24 months of no transactions, worth checking your specific card's terms and conditions for the exact threshold that applies to your account.
Does an inactivity fee apply even if I am still paying the card's annual fee?
Yes, these are generally separate charges, an inactivity fee specifically penalises non-use, while the annual fee is a standard, ongoing cost of holding the card regardless of usage frequency, worth checking whether your specific card applies both.
Will I be notified before my bank closes a dormant account?
Practices vary by issuer, some provide advance notice or a warning period, others may close the account with more limited notice, worth proactively using each card periodically rather than relying on receiving a warning before closure occurs.
Is it worth keeping a dormant card open purely for its credit history value if it charges an inactivity fee?
This depends on the specific fee amount versus the value of the account's age to your overall credit profile, for a modest fee and a genuinely old, valuable account, maintaining light periodic activity to avoid the fee entirely is usually the better approach rather than paying the fee or risking closure.
