Whatamuji wrote:I've got a couple of cards I don't use on a regular basis or don't see myself using on a regular basis. Is it better to stick those cards into the "sock drawer" and let them be closed for inactivity or should I ask the bank to close them?
I could be wrong, but I think in terms of your credit score it doesn't really matter either way. It could perhaps be an issue if an actual human analyst is reviewing your file and sees that the account was closed by the creditor rather than the consumer, because then it could perhaps look like there was a problem. However, anecdotally, this has never been an issue for me. I've had several cards closed for inactivity over the years, and as I recall from reviewing my credit report periodically most did in fact add the comment that it was due to inactivity. I've never noticed a dip in my credit score as a result of inactive accounts closing.
However, while I don't think it makes much of a difference whether you close the inactive card or they do, it definitely CAN impact your credit score either way. Namely your available credit will of course go down by however much your limit on the inactive card was, and thus your utilization will also go up, which does have a big impact on your credit score. So depending on the size of your card's limit and your general balances vs available credit on other cards, it may bring your score down.
Second, it will ultimately affect your average age of account and perhaps age of oldest account (if it is your oldest account). But positive accounts will generally stay on your credit report for ten years after they're closed, so you likely won't feel the effect for awhile, and by then the aging of your other accounts may offset the dip. I suppose in that regard it may be better to let them close it themselves since that'll likely give you a few extra months vs just calling them up tomorrow and saying, "close it." But of course we're only talking a few months in the grand scheme of things, so I wouldn't really worry about it.
Actually, I'd say you're probably better off closing the account yourself if you definitely don't want it and won't be using it again. The reason being that with the account closed you'll no longer need to monitor it for fraudulent activity. That's definitely important. If you quit using the card DON'T quit checking your statements. I remember just very recently someone on this forum posted about how they got burned when they didn't notice fraudulent activity on a card they weren't actively using. If you won't/can't keep monitoring it, close it! Second, you'll have control of when it happens. So for instance if utilization is a concern, you won't have to worry about the account getting closed right at the worst time when you've just run up your other card balances. Third, though I really don't think it will impact your credit score if you close it vs them closing it, if there IS any impact even negligible, it'll almost certainly be better if you do it yourself.
Another option of course is to just use it for one small charge once every 4-6 months or so. That'll probably be enough to keep it active - again just make sure you continue monitoring it regardless. Personally speaking, in the past there were just several times when I didn't care enough to make the effort to keep an account active or enough to proactively call and close it. Now however, my strategy is the one small charge a few times a year thing, just to keep the account history, and I check all my accounts online weekly. Sounds like a lot of work, but it really isn't at all. I do it all at once and I'm already logging in to like 10 different financial accounts (not all credit cards), so what's one more? Only takes a few seconds to login and say, "Yep, zero balance" and logout again.