Can a bank close my Credit card for non/less usage?

[AsB]

I have some Credit Cards which I barely use. Example - if I have two cards from the same bank, I use one of them extensively, while I barely use the other one, or use it when it has more offers than the former.
In other cases, there are some cards which I barely use. Example- I got an Indusind bank Credit card for my father, but I only use it when there are offers on Amazon, that too, only if its cashback value is more than other cards that I have.

So, if I dont use a card often, or use it for less transactions, or for less transactional value, will the bank close my card?

If not, Can I use such cards for like 1 payment of Rs 10 per year to keep it active?

P.S. - I am only talking about LTF cards in the above.

 

[ashwinkashwink is verified member.]

I have some Credit Cards which I barely use. Example - if I have two cards from the same bank, I use one of them extensively, while I barely use the other one, or use it when it has more offers than the former.
In other cases, there are some cards which I barely use. Example- I got an Indusind bank Credit card for my father, but I only use it when there are offers on Amazon, that too, only if its cashback value is more than other cards that I have.

So, if I dont use a card often, or use it for less transactions, or for less transactional value, will the bank close my card?

If not, Can I use such cards for like 1 payment of Rs 10 per year to keep it active?

Yes you should close if it's chargeable hence LTF keep it or ask your bank for ltf

 

[hriday.haria]

I have some Credit Cards which I barely use. Example - if I have two cards from the same bank, I use one of them extensively, while I barely use the other one, or use it when it has more offers than the former.
In other cases, there are some cards which I barely use. Example- I got an Indusind bank Credit card for my father, but I only use it when there are offers on Amazon, that too, only if its cashback value is more than other cards that I have.

So, if I dont use a card often, or use it for less transactions, or for less transactional value, will the bank close my card?

If not, Can I use such cards for like 1 payment of Rs 10 per year to keep it active?

P.S. - I am only talking about LTF cards in the above.

Yes, as per current rules

But soon this is going to change, from next month.

Banks can only close CCs if there is no transaction for a year, and that too after providing a notification, they will have to wait for additional one month before they can close a CC.
So basically if you do one transaction on a card in/around 385-390 days, there is no need to worry !

 

[Souvik]

It may not be far in the future that banks would start charging you for keeping cards inactive, so more the inactive cards more the hassle, till then enjoy LTF.

 

[hriday.haria]

It may not be far in the future that banks would start charging you for keeping cards inactive, so more the inactive cards more the hassle, till then enjoy LTF.

I think that cannot happen, especially with LTF cards.
As the term says, LTF ... It generally means UNCONDITIONAL LTF

 

[prc1990]

Wo bank he, kuch bhi kar sakta
Hum customer he, hum kuch bhi mang sakta 🫣

 

[007]

I think that cannot happen, especially with LTF cards.
As the term says, LTF ... It generally means UNCONDITIONAL LTF

Not true in case of HDFC. Read point 2 & 3!



Source: https://www.hdfcbank.com/personal/pay/cards/credit-cards/exclusive-festive-pricing

 

[hriday.haria]

Not true in case of HDFC. Read point 2 & 3!

View attachment 1604

Source: https://www.hdfcbank.com/personal/pay/cards/credit-cards/exclusive-festive-pricing

Exactly what I said, these are subject to change next month !

Also point 3 specifies ... "With prior Communication"

And this 6 month period has to be changed to 12 as per new RBI Rules !

 

[007]

Exactly what I said, these are subject to change next month !

I believe they have been following this since November 2020! 🤷‍♂️

 

[souvikdey2002]

Ah interesting
@souvikdey2002

Please confirm if you hold a Business Credit Card??
Because the T&C's written here says for a Business Credit Card & not a personal one.

For Business Credit Card many more restrictions are there in place since the ROI & various other charges are given at a low cost rather than personal.
So from bank's perspective it has to be used regular basis but if not uses then, Yes, these conditions may be applicable.

P:S:- I hold a Citi Commercial Credit Card for last 10 years where I don't do regular transactions, sometimes not even 9 month at a stretch. It was never closed earlier or no such conditions were applied.

 

[Souvik]

Not true in case of HDFC. Read point 2 & 3!

View attachment 1604

Source: https://www.hdfcbank.com/personal/pay/cards/credit-cards/exclusive-festive-pricing

Thanks, I did not know that, looks like once bank's margins are under more stress due to increase in repo/interest rate in some time from now these new/additional charges would come into effect for profit seeking and there would be a reverse trend of people trying to cancel/close inactive/frolic credit cards.

After all, keeping a credit card active costs x to the financial institution irrespective of sustaining either a business or personal credit card.

 

[AllSeeker]

I do simple rs 10 transactions to load wallet or something, it doesn't matter what, but every odd month you can roll through your credit card portfolio.

One other advantage is that when you do this your bill is generated stating actual use rather than 0 or -ve value, which means it will have better impact on cibil as it will count as one more bill you paid off.

Usually it's a good idea to do at least 1% value transaction on each card of their limit in every now and then.

This is also a reason one should not actually maintain too many credit cards, even if they are LTF.

Sometimes it's better to close off low end cards if they are just there to increase the tally.

 

[007]

Please confirm if you hold a Business Credit Card??
Because the T&C's written here says for a Business Credit Card & not a personal one.

For Business Credit Card many more restrictions are there in place since the ROI & various other charges are given at a low cost rather than personal.
So from bank's perspective it has to be used regular basis but if not uses then, Yes, these conditions may be applicable.

P:S:- I hold a Citi Commercial Credit Card for last 10 years where I don't do regular transactions, sometimes not even 9 month at a stretch. It was never closed earlier or no such conditions were applied.

No, you got it wrong. It's not just for business cards, also for personal ones. It says you can be issued a business card depending on internal policy. Check the source link.

 

[007]

I do simple rs 10 transactions to load wallet or something, it doesn't matter what, but every odd month you can roll through your credit card portfolio.

One other advantage is that when you do this your bill is generated stating actual use rather than 0 or -ve value, which means it will have better impact on cibil as it will count as one more bill you paid off.

Usually it's a good idea to do at least 1% value transaction on each card of their limit in every now and then.

This is also a reason one should not actually maintain too many credit cards, even if they are LTF.

Sometimes it's better to close off low end cards if they are just there to increase the tally.

Exactly. The bill generation and payoff is what matters. So, it's better to use your cards atleast once in a quarter.

 

[Souvik]

I do simple rs 10 transactions to load wallet or something, it doesn't matter what, but every odd month you can roll through your credit card portfolio.

One other advantage is that when you do this your bill is generated stating actual use rather than 0 or -ve value, which means it will have better impact on cibil as it will count as one more bill you paid off.

Usually it's a good idea to do at least 1% value transaction on each card of their limit in every now and then.

This is also a reason one should not actually maintain too many credit cards, even if they are LTF.

Sometimes it's better to close off low end cards if they are just there to increase the tally.

Question is till how long you want to play the cat and mouse game, to survive a few pieces of plastic, which you know are almost trash.

At one point of time if you fumble/forget to use it, and leaving apart any introduction of inactivity charges and all a simple mere closure of the card, may have an adverse effect on your cibil.

 

[AllSeeker]

Question is till how long you want to play the cat and mouse game, to survive a few pieces of plastic, which you know are almost trash.

At one point of time if you fumble/forget to use it, and leaving apart any introduction of inactivity charges and all a simple mere closure of the card, may have an adverse effect on your cibil.

Exactly, and hence one should only take what they plan to use or can use. Not just trophies. 🤣

My oldest loan is education loan and closing my inactive CC doesn't really effect my credit history -vely, in fact it increases average age as number of loans/cc go down by one.

Your point is valuable because not everyone has this luxury. Unfortunately by the time people realise it they are too far into the waters.

 

[Souvik]

Exactly, and hence one should only take what they plan to use or can use. Not just trophies. 🤣

My oldest loan is education loan and closing my inactive CC doesn't really effect my credit history -vely, in fact it increases average age as number of loans/cc go down by one.

Your point is valuable because not everyone has this luxury. Unfortunately by the time people realise it they are too far into the waters.

True, its not about the adrenaline rush, that I have x number of cards, that I would show off and even perhaps ask others to do the same Or if it is LTF pile up as many as you can. 😀 A bit childish to say the least.

I have 3 credit cards till date (all LTF), HDFC Regalia (oldest card, used for lounge access now, else its useless for me), Amazon Pay ICICI for extensive use giving me cashbacks (no cashback points drama mind you or take airmiles to give me some more business story), and of late took IDFC Select (for movie offers, lounge access for partner). End of story.

 

[SC_23]

Not true in case of HDFC. Read point 2 & 3!

View attachment 1604

Source: https://www.hdfcbank.com/personal/pay/cards/credit-cards/exclusive-festive-pricing

So what's the most efficient way to keep LTF status active of HDFC card from July onwards will it change from 3 months or only closing of card will be moved from 6 months to 12 months

 

[SC_23]

I do simple rs 10 transactions to load wallet or something, it doesn't matter what, but every odd month you can roll through your credit card portfolio.

One other advantage is that when you do this your bill is generated stating actual use rather than 0 or -ve value, which means it will have better impact on cibil as it will count as one more bill you paid off.

Usually it's a good idea to do at least 1% value transaction on each card of their limit in every now and then.

This is also a reason one should not actually maintain too many credit cards, even if they are LTF.

Sometimes it's better to close off low end cards if they are just there to increase the tally.

Do you pay it off unbilled transaction right away or wait till bill generation ?

 

[AllSeeker]

Do you pay it off unbilled transaction right away or wait till bill generation ?

Bill generation in above case.