Credit Card Usage Guidance: Why Rarely Using Your Card May Hurt Your Credit Score

Credit card usage in India is rising fast, with spending reaching Rs 21.16 lakh crore in FY25, marking a 15% increase year-on-year, as per the Reserve Bank of India data. Through credit cards, people are tapping into quick funds and enjoying big reward programs. Top lenders are also offering discounts and rewards on different kinds of spending, making these cards more appealing. 

Users are trying to get the most out of every swipe in hopes of bonuses, cash back and other benefits. But, if you are someone who owns a credit card but doesn’t use it very often, it may not be a very ideal situation for your credit card.

However, not using your credit card frequently could hurt your credit profile. It is important to understand how inactive cards could affect your credit score negatively. 

1. Not using your credit card often can hurt your credit score as banks may choose to close your inactive account. This can change your credit utilisation ratio and affect your credit score. If you don’t use your card, your credit utilisation stays low, which helps your score. But if the card issuer closes or lowers your limit, the utilisation ratio may rise, hurting the overall score.

2. The risk of account closure also comes with additional problems for the borrower. It lowers your average credit age, which may hurt your credit score.   

3. Payment history is one of the biggest factors in your credit score. If you don’t use your card, you miss out on building a positive payment record. This can hurt your credit score over time. 

1. You can maintain your payment record by periodically making small purchases every few months. Remember to pay off the balance quickly to maintain and build a strong credit history.

2. Set up auto payments for small monthly bills. This keeps your card active and helps you track your spending easily.

3. Regularly review the details of your card, including its potential annual fee linked to closing the card. If there are no fees applicable, it’s usually better to keep the card open to maintain a healthy credit score.