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So you signed up for a travel credit card and didn’t end up using it. Maybe you had grandiose plans to become a serious miles or points hound, racking up tons of free travel but it just didn’t work out that way. Maybe you thought you were going to do a lot of travel in the near future and you could maybe use the credit card perks, but things didn’t pan out.
Should you cancel your travel credit card?
Whatever the reason, you now have an unused travel credit card on your hands and you’re now considering canceling the said card and removing it from your wallet.
Here’s why you should reconsider.
1. It could hurt your credit.
While it’s not always the case that closing a credit card will hurt your credit, there are a few select instances where it can.
For example, if this travel credit card is unused, but it’s the only credit card you have in your wallet with available credit, then closing it will hurt your credit score. It makes it appear as if you’ve used up all the credit that’s available to you, and you can’t get any more (even if that’s not the case).
Similarly, if this unused travel credit card is the only credit card in your wallet, then closing it will hurt your credit score. Having a credit card and using it responsibly reflects a certain level of maturity when it comes to the way your credit score is calculated. So, even if you’re not using your travel credit card, just leaving it open as your only card can show that you know how to use a line of credit responsibly, impacting your score later down the road.
Additionally, if the card is the oldest credit card you have (maybe you picked it up in college hoping to score free travel for spring break), then canceling it will negatively impact your credit score. It will make it appear that your history of using credit is shorter (which lenders view negatively).
2. You have available rewards.
Even if you want to cancel your unused travel credit card down the road, if you have available rewards now, push off that decision until later. If you cancel the card, those rewards are gone. Zip. No longer in existence.
Check your rewards balance and see if you at least maybe have some points or miles that you received from signing up for the card or making any initial, long-ago purchases. Even if you can’t redeem them for an entire flight or a hotel stay, you may be able to put them toward a portion of an upcoming flight or a portion of your hotel stay.
Additionally, many travel credit cards allow you to redeem rewards for non-travel related items, from magazine subscriptions to jewelry. See what your options are.
Along these lines, many credit cards come with free, one-time annual perks, ranging from a free lounge pass per year to a free companion pass for a year. If you have something like this available to you, it’s always a good idea to take advantage of it before closing the card.
You might as well get all you can from those free perks!
3. There’s an easy, possibly hidden way to use it to your advantage.
Maybe you’re not using the credit card not because you don’t want to, or you don’t feel like it’s beneficial. Maybe you just don’t think about it. It’s not second nature for you to pull it out at the store. If you do want to keep it open, whether for the rewards or your credit score, and you’re just not in the habit of using the travel credit card, there are a few simple ways you can start using the card on a regular basis without ever having to even take it out of your desk drawer.
Look for automatic charges throughout your life and start putting those on the card. Netflix, Hulu, your streaming platform of choice. Add the card to your Uber account. Some credit cards even give you extra points for purchases like these.
After you have these types of payments set up, just make sure you pay off the credit card itself every month by setting a reminder in your phone, Gmail, or whatever calendar platform you use most.
When should you cancel an unused credit card?
Of course, there are always a few times when you should cancel an unused travel credit card. The main time when this might be the case is when you’re paying an exorbitant annual fee (or even a non-exorbitant annual fee) and not getting your money’s worth. If you don’t fly, don’t want to fly, don’t need to fly, and the only perk your card is giving you is lounge access, then that $100+ annual fee isn’t giving you anything.