Your Credit Card: Use It, Or Possibly Lose It

CHICAGO (CBS) — If you’re someone who pays your credit card bills on time – and in full — you probably consider yourself a good customer, right?

Well, if you’re doing that, but not using your credit card enough, you may be at risk of having it cancelled. And that  can cause big problems with your credit score, CBS 2’s Rob Johnson reports.

Kevin Hicks couldn’t believe it when, in early January, a Wells Fargo credit card with a $37,000 limit was suddenly cancelled by the bank.

“I was shocked. I’ve had that card for 10 years, and it’s a huge part of my credit score,” he said.

His credit score dropped 60 points to 705. Why?

DePaul University banking professor Rebel Cole says that can happen to anyone if a card with the longest history and the largest credit limit goes away.

According to, how long you’ve had credit accounts for 15 percent of your credit score. How much credit you’re using, compared to how much you have available, makes up another 30 percent.

So, if your credit score suddenly dropped 60 points, say from 740 to 680, here’s how it would impact your ability to borrow money:

Your interest rate on a 60-month loan for a new $25,000 car would jump from just over 5 percent to nearly 9 percent. That means your monthly payment would increase from $472 to $516.

Over the life of the loan, you’d pay an extra $2,600 dollars in interest.

Cole’s advice: Even if you pay your cards off in full every month, make sure you use them.

“You need to use your credit card to keep your credit score in good standing and to keep your credit available,” Cole says. “If you don’t use the credit, they’ll take it away from you and then you won’t have it available when you need it the most.”

Hicks understands now. His main option is to begin the painstaking process of rebuilding his credit.

This is just one of the unintended consequences of the new credit-card law that was intended to protect consumers. Cole says all the banks are required to do is to notify you, even as they are cancelling the card.   

Wells Fargo says banks are required to give 30 days’ notice.

  • Credit scores, in sickness and in health

    […] Your Credit Card: Use It, Or Possibly Lose It Surprisingly, banks may pull your credit card if you’re paying your bills on time but not using the plastic enough. CBS 2′s Rob Johnson explains. Read more on CBS Chicago […]

  • Janes Nobody

    Ah yes, anothr ploy to generate extra income by big corporations!
    Their profit margins have fallen, so to make it up – They charge extra or
    threaten consumers with cancellation (example : auto industry, banking,
    and the major glutten OIL EXECs). They know that the sheep will not stop using the plastic and will play their game no matter what. They get caught doing questionable tactics on the left, they swirtch to the right with something else. Public outcry is only short lived! Bend over and pay consumers!

  • Doug

    “Cole’s advice: Even if you pay your cards off in full every month, make sure you use them.” If people pay off their credit cards every month, doesn’t it stand to reason that they’re using them?

    • Kay Hauck

      Iif you pay them in full, the bank isn’t getting interest. But they are still getting the fees they charge merchants.

  • FR

    Better to lose your credit, stay single and you won’t need credit.

  • Mom in Indiana

    Obama should have bailed us consumers out, all tax paying citizens would have received about $100,000.00 each, the economy would have bailed itself out and the banks would NOT be able to continuously rip us off. Shame on you Obama for letting this happen to us commoners, you know; the ones that are REALLY keeping OUR country going by doing ALL the “physical” work.

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