5 Signs You Aren’t Using Credit Cards Enough

If you pay for most of your purchases with cash, checks or debit cards and shun your credit cards, you probably think you’re being fiscally responsible. But in fact, letting your credit card collect dust can be a big mistake. Here are five clues that you might not be using your credit card enough:

1. Your rewards aren’t being used. If you got a sign-on bonus when you received your credit card, you may have piles of points just sitting in your account. In most cases, reward points don’t expire—but sometimes they do. It would be a shame to let your reward points go down the drain without you even knowing they are there. Whether it’s cash back, free nights at a hotel, frequent flyer miles or points that can be traded in for a gift card, log in to your credit card account or call the number on the back of your card to find out if you have rewards you don’t even know about.
2. Your account gets closed for inactivity. If you haven’t used your credit card for a long time, it’s possible your issuer will close your account. Then when you finally pull that card out to use it, you’ll find it declined: not a fun position to be in. In addition, closing a credit account will cut short your credit history. If you’ve had your card a long time, you don’t want to lose that history. So give your credit card a workout now and then to keep it in shape.
3. Your credit score is dropping. In order to maintain a healthy credit score, you actually need to use credit. If your account was closed, this can negatively affect your credit score. Another part of a good credit score is having a healthy line of credit available. If you only have one card with a small limit, your score will not be as good as if you have several cards with higher limits. Check your credit score and find out where you stand. If you see it begin to drop, start using those those credit cards and paying them in full by the due date. Or apply for a new card and use it carefully to see your credit improve.
4. You are paying high interest on your balance. Maybe you don’t use your credit card because you’re trying to pay off a large balance. But you could be missing out on the chance to pay off that card without paying any interest. Shutting your card away in a drawer and never thinking about it isn’t going to do you any good. Apply for a balance transfer credit card offer with 0% APR for an introductory period. You will be able to pay off your debt faster and at less total cost.
5. You can’t find your credit card. If you do go to use your credit card and can’t even find it, that is a sign for you. Keep track of your credit cards and use them for your benefit. Using credit can be one of the wisest financial decisions you make.