Good Lifestyle

Yourcredit rating dictates a lot of your greatest decisions of life, the rental of a car toTo buy a house. As you probably know that these big purchases in life are often accompanied by the mounting debt and maximum credit cards can harm your long-term credit score, there is also a small mistake you could do without You realize that this could ultimately reduce your credit score. , too much. To make sure that you are not causing you to fall, read it and if you hope that another stimulus check to increase your funds, discoverHow your fourth stimulus check would be different from others.

It may seem harmless not to put your credit card to use, but the old cliché "use it or lose it" applies here. "Do not load anything to your credit card will result in the inactivity of this card for a long time. Inactivity can lead to a closure to the account," says the former finance consultant andBusiness Development Consultant Carol Tompkins. And your credit card is closed "will take a shot of your credit."

Business expert and stand founder with main streetCharles McMillanAlso warned that "the credit card company is not required to send you a prior notice if your card is closed due to inactivity. So, if you do not use your credit card enough, you can end up finding that it has been closed without your knowledge.

"Your credit pointing rate is based on two factors: the duration of history using credit and your utilization rate," says McMillan. Unfortunately, having a closed credit card could negatively affect the two aspects of your score.

Personal finance expert and founder ofWallethacks.com Jim Wang Says that your average age of accounts "will begin to go down because the recently closed account will be frozen over time" until the card is removed from your credit report seven years later.

In addition, your utilization rate, the amount of credit available you are using, mount. Depending on the balance "when aThe credit card is closedThis credit limit is no longer envisaged in your credit use. So, if you have sales on all your other credit cards, your use increases. This can be problematic because your credit use represents 30% of your credit score. " The total debt is the same, but your use will increase you a more risky borrower, "says Wang.

To make sure you are not making another financial error, seeIt's the biggest loss of money you spend without knowing it.

When you get your card first, it would be wise to check how long the card can stay inactive before closing. Although some credit card companies do not disclose the duration, others have the maximum number of months they will leave an inactive credit card. According to Walethub, Chase and Capital One Will WillClose your account After a year of inactivity, while Wells Fargo will close an account after only six months due to a lack of use. These banks inform you beforehand.

However, after 24 months of inactivity with your Citibank card or only three months of inactivity with a Barclay card, these banks will close your account without notifying you.

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You do not have to spend a ton of money on your credit card to make sure you maintain a good credit. Tompkins suggests you "putting a small monthly payment on your credit card such as gym membership to keep the active account". In this way, you will not forget to use it.

"Wear a small balance, even as little as 1% of use, can help strengthen your score and your utilization rate", suggestspersonal banker Justin Furniel .

To see what you should avoid spending money in your wedding, check The more money you spend money, the more likely you are to divorce .