Do I Have To Pay If I Don’t Use My Credit Card?

Do I Have To Pay If I Don’t Use My Credit Card

A credit cardholder may stop using the card at any given time due to personal reasons.The person may not feel the need for using the card anymore. Many people are curious to know if they have to pay any extra charges even after putting an end to the service.

There are no additional fees that need to be paid after you stop using the service. However, an annual fee is charged by the issuer. The fee is usually charged in advance after the card is issued. The US law has prohibited the issuers from taking an additional fee for inactive cards since 2010.

Some people stop using their credit cards in fear of paying the interest rates and extra fees. This is not the right way to minimize the extra fees but rather use the card in a smart way.

If you want to keep your credit card and not pay that extra money, I would suggest using  your card to pay the light amounts like your bills, gas etc.

In this article, an overview of different types of charges will be given and the consequences you might face if you do not use your credit card for a year or month.

How Long Can You Go Without Using Your Credit Card? 

You can stop using the credit card service any time you want. But always make sure to clear your dues before you decide to terminate the service. There are no specific rules or regulations that you have to use your credit card and it will not sabotage your credit score as well. Most issuers close down the inactive cards or the accounts if the card is not used for more than 1 year.

What Happens If You Don’t Use Your Credit Card For A Month? 

Nothing will change if you don’t use your credit card for a month. You will get all the benefits and the same services you got from the very first day. The issuer will send you the bank statements like every other month, even if you do not make any credit purchase. 

What Happens If You Don’t Use Your Credit Card For A Year? 

The issuer or bank will close down your account if you do not use the account for more than a year. Some issuers or banks deactivate the unused account if the card is not used for more than six months. Some of the issuers also allow you to keep the inactive card for more than a year or two. 

How Often Should I Use My Credit Card To Keep It Active ?

In order to make sure your card is active and safe from fraudulent charges, check your account status and activity every month. If you are totally against using credit cards and not accustomed to it, try to use your cards every 3 months to play it safe. 

Here is a table below to show the facilities given by the top US Banks and the time-frame of inactive credit card termination. 

Issuer’s/Bank’s NameIn-Active Period For TerminationInterest Rates On BalancesMinimum Deposit
Bank Of AmericaNot Specified or Disclosed0.01%$100
US BankNot Specified or Disclosed0% for platinum users$25
American ExpressFocuses on Various conditions before closing an account1.17% for Amex CardholdersNo Deposit Required
Capital OneOver 1 year0.40%$50
Barclaycard6 to 13 months 1.83 % / 22% APRNo Deposit Required

What Are The Types Of Charges And Fees Are There ?

It is inevitable that you have to pay a certain charge and fee for using a credit card. Let us find out about the different types of charges that you need to pay.

There are basically three types of charges for using or owning a credit card.

  • Common Charges,
  • Government Fees and
  • Hidden Charges.

10 Common Charges That You Have To Pay For Your Credit Card

1. Basic Annual Fee:

This is the basic fee you have to pay at the start after applying for a  new credit card from the bank or issuers. This is a renewal fee which needs to be paid every year to keep your card active. Some issuers will balance your annual or renewal fee from your rewards. If you register or apply the card during a campaign or promotional stage, they will not charge the extra fee for the first year.

2. Supplementary Card Fee: 

A supplementary card is given free by most issuers with your credit card. It has a hidden annual fee that needs to be paid every year as well.

3. Transactions Alert Fee:

 A short message is delivered to your phone from the bank regarding the transaction in detail after a credit purchase. The bank charges an extra fee annually for notifying you after every transaction.

4. Interest Charge: 

This is the most common charge that you all know has to be paid in due time. Failing to do so will pile up your interest rate and is recommended to pay the dues on time. The interest rate varies from bank to bank and usually the rate is ranging from 18% to 36% per annum. The interest rate is charged and counted from the missing date.

5. Late Payment Charge: 

You have to pay a certain amount for late payment. There are two types of dues that need to be paid like minimum and maximum dues in a given period of time. Late payments are only charged if you fail to give the minimum due.

6. Over Limit Charge: 

If you ever cross your credit limit intentionally or unintentionally, an extra charge has to be paid. The fee varies from bank to bank and the total value of your card.

7. Card And Pin Replacement Fee: 

There is a fee for replacing your card if accidentally lost,damaged or stolen. The issuers and banks will renew your card for free after every 5 year. If you ever forget the pin number of your credit card, an additional charge needs to be paid and it varies from bank to bank

8. Credit Card Cheque Book: 

After issuing your card, the bank will provide you with a credit card cheque book. Likewise if it is lost,stolen, damaged or the pages run out,you have to apply for a new cheque book in exchange for an extra charge. The charges are applied according to the number of pages you will apply for.

9. Card Cheque Processing Fee: 

If you want to withdraw any amount from your credit card, you have to pay an extra fee for the processing. The extra fee is charged based on your transaction amount.

10. Cash Advance Fee: 

There are many ways to withdraw cash from your card for eg: cheque, ATM cards and E-Wallet or online purchase. An advance fee is charged instantly after withdrawing money from an ATM booth, cheques or online purchase. The rate also varies from banks to banks and it is your responsibility to find out about the charges.

However, besides these additional fees you also have to pay the government some charges. You need to pay an extra amount for VAT( value added tax) and CIB  (Credit Information Bureau) fees for issuing a new credit limit. 

Final Words

I hope this article is informative enough for you to gather the information needed regarding the payments of not using the credit cards. If you have any questions or queries regarding the use of credit cards, feel free to comment down below or simply write to us.

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