I haven't heard a lot about student cards getting shut down for inactivity, so let this story serve as a reminder: students, use your credit cards. Do not let them go inactive. That's the takeaway from two letters that my friend's girlfriend received over the weekend.
Turns out that Citibank isn't just looking to close down general cards, it is shutting down inactive student credit cards as well. Because my friend's girlfriend had not used the cards for some time, Citibank closed two of her student cards. I imagine that most students don't have to worry about this -- because so many college students keep balances -- but if you are a pay-in-full kind of student, and you are not using your card on a regular basis, you should consider using the card sooner rather than later.
Here is the Citibank letter (my friend's girlfriend actually received two of these letters):
In addition to the card being closed, this customer will also forfeit any Extra Cash rewards that have accumulated on the card over the years. So, be sure to use the rewards before the card is officially closed.
Citibank has been stepping up its account closures of late (you saw what happened to my Citi Flex account. If you didn't, read about it here (link)). I've been hearing, behind the scenes, that Citibank is reviewing all inactive accounts -- and then determining whether to shut the accounts down. Indeed, after nearly 15 months of not using my Home Depot card, I recently made a purchase on the card. Thankfully the card still worked. That Home Depot card (underwritten by Citibank) is almost five years old. I like the age on the account.
While the girlfriend's account closures are probably justified (it had been more than a year since she last used them), there are likely other students out there who are on the bubble. If you haven't used the card for six months, you could get shut down at any time. If you're in that boat, I recommend that you use the card as soon as you can. You simply want to get out of the "inactive pile" that Citibank is digging through. Plus, and this cannot be overstated, it would be a lot better to keep your current cards than to reapply for a new one (not exactly the easiest environment to get new cards).
I've written about this stuff in the past. Used to be that you could let cards sit idle for a lot longer than six months. No more. Card companies are actively looking to shut down inactive credit cards.
I'm starting to think that three months is too long to go without putting a purchase on a credit card. Let this story serve as a reminder that an inactive card is a rich target for a credit card company looking to close an account.
Use them or lose them, folks.
Heads Up: Macy's and Citibank Closures and Credit Limit Reductions On My Radar Screen
How Closed Credit Cards Impact Your FICO Score
From the "Use it or Lose it" Department: Citibank on a Rampage with Citi Flex
Don't let Your Credit Card Accounts get Dusty
- The Current Credit Climate Requires Flexibility