I get asked this question a lot “do I need to use my credit cards every month?” The short answer is no you don’t need to use your credit cards every single month. However, it is recommended that you use them at least every three to six months.

To make sure you guys don’t get hit with the same issues. I’ll be the guinea pig, of course, then I’ll share the love with you guys.

So using your credit cards every single month. That’s okay.

But you don’t need to use them every single month. Using them every three to six months is very imperative.

Here’s why.

What happened to me is I got a phone call from Barclays. Actually, I was creating my content for a completely different video this morning.

I got a call from Barclay’s that stated, “Unfortunately, your credit card has been closed.” Sent me an email.

Now, you guys know that when you get a letter in the mail, sometimes you see it, white plain envelope, you throw it in the trash.

I did the same thing, but what happened was because of inactivity, they contact me and said that they closed my $10,000 Barclay’s card.

Now I’m going to show why was this could be devastating for you and kind of the implementation. This is what happened to me.

So I’m just trying to share from you guys like, look, give you some education. Don’t let this happen.

See where you’re at with your cards and then we can protect you that way.

They called me and told me because of inactivity that my card was closed down. I said, “What do you mean? I didn’t get a letter.” “Well, sir, you were sent a letter back on X X X date.”

It is what it is. The credit line is shut down.

Now here’s where this can be dangerous.

Number one is, when a card gets closed down, there are three factors of why this can hurt your score.

The number one factor why this can hurt score is because you are losing the revolving credit.

So I’m going to give you guys an analogy and basically a description of how it hurt me, and then you’ll kind of see it.

You’ll be able to paint a picture.

Let’s say that you have three credit cards and you’ve got one for 500, one for 2000, and one for 5,000.

And let’s say between the $7,500 of total credit limits that you have between all your cards, this just happened to you, and you lost your $5,000 card.

But you spend about $2,000 a month on your credit cards between them.

When you lose that $5,000 card, what do you think is happening?

Well, let’s go to this scenario where we were just using $2,000. But you are using 2000 out of 7,500 of the total credit limit, so you were still under 30% utilization.

Now when this $5,000 credit card gets closed, now you’re at $2,500 of an open credit limit, because now you only have the 500 and 2000.

But guess what?

You still used $2,000, because that’s what you used prior to the card closing down. So now you’re over 80% utilization.

And remember that utilization counts for 30% of your credit score. So this is going to make your score dramatically decrease, very fast.

Not to mention that if that card, that $5,000 credit limit, was your oldest card. So now that’s 15%.

So take a look at it this way. You could lose literally 55% of your score.

And here’s why. You could lose utilization, which is 30% because you just went from 30% utilization.

They dropped off your $5,000 credit card. Now you’re at 80% utilization because $2,000 out of 2,500 versus $2,000 out of 7,500, because the 5,000 is gone.

Your score is going to tank. 30% of your score just got crushed.

Now you’ve got, possibly you’ve got your account mixture, which is 15%, and then you’ve got your age, which is 10%. So if that was an old card, in my case it was a four-year-old card, so I lost a credit limit and four years of history.

Now, fortunately, I have enough credit cards that it didn’t really affect my credit score but two or three points.

But this could be devastating to someone who only has a few credit cards and they didn’t use their cards every three to six months.

But if it was an age card, you’re going to lose all that age as well.

So in order to prevent yourself from losing almost 55% of your score, which could happen.

Count mixture, you lose your age and then you lose that credit limit. That can be 55% of your score.

You could literally go from the 700s down to the mid fives, just by an account closure because you didn’t realize that you weren’t using your card.

So here’s what I implore you guys to do.

Get your credit cards out and use them. I don’t care if it’s for a piece of bubble gum.

Use all three credit cards today to make sure. Because typically this is the way the banks work.

It’s usually a year or two years. Some are a year, some are two years.

That means if you don’t use the card for at least a year, they’re going to send you something in the mail stating that if you want to keep this open, if you want to keep this credit card open, then you want to use it within the next 60 days or you’ll have an account closure.

So I completely just dropped the ball. Threw the piece of mail away, didn’t realize it.

And then next thing I know, I’m getting an email and a phone call from the bank saying that my card’s closed. So I don’t want that to happen to you guys.

That’s why I do this channel, to protect you from those things happening.

Grab your credit cards, use them for a piece of bubble gum, go out to lunch and then pay off the cards in full.

It’s a completely new video that we’re going to do about how much you should actually use on the credit cards each month, but at least every three to six months to prevent your cards from being closed down.

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