Q&A: Downside of unused credit cards

Dear Liz: In the past, you have recommended not canceling credit cards because doing so can hurt credit scores. Over the years, my husband has signed up for at least a dozen credit cards, eight of which we never use and have not used for as long as 10 years. He signed up for another card recently because it offered attractive cash rewards. Is having so many credit cards advisable and safe? Does it make us more vulnerable to identity theft? Without hurting our credit scores, may we discontinue the older cards we have stopped using? Is there any drawback to having multiple, perhaps dozens, of credit cards, especially if some are older and never used?

Answer: The biggest downside to having a bunch of unused credit cards is having to monitor all those accounts for fraudulent transactions, and perhaps paying unnecessary annual fees. The unused accounts add to the amount of available credit you have, which is a positive factor for credit scores.

If you’re concerned about identity theft, your best move would be to freeze your credit reports at all three bureaus. Such freezes are now free, and you can easily “thaw” the freeze temporarily if you want to apply for credit.

Credit freezes make it harder for criminals to open new accounts in your name. If a criminal uses one of your existing accounts, you’re typically protected. The vast majority of credit cards offer “zero liability,” which means you won’t be held responsible for fraudulent charges. Even without zero liability, federal law limits your liability to $50.

If monitoring multiple accounts is too much hassle, though, then he should consider closing some of the cards. If he’s paying fees for cards he’s not using, another option is to ask the issuer for a “product change” to a card that doesn’t charge fees.

Related Posts

  • Q&A: Too many cards? Dear Liz: My husband and I have opened accounts to take advantage of 0% interest financing for special purchases. These accounts are paid […]
  • Q&A: Credit scores and new accounts Dear Liz: My spouse signed up for a store credit card to receive a discount on a large purchase. As she has no strong interest in […]
  • Q&A: Credit cards just keep coming Dear Liz: I use only two credit cards. But I have several credit cards I never use. When the cards expire, the issuers send me new ones. […]
  • Q&A: Closing credit cards with annual fees Dear Liz: When I opened my airline-branded credit card almost 10 years ago, it was well worth the $50 annual fee. I was able to book many […]

Speak Your Mind

*