What impact does it have on your CIBIL score if you suddenly stop using your credit card?

Stopping using an old credit card erases your credit history, making it harder for banking algorithms to gauge your financial discipline. So, rather than closing the card completely, it's technically more beneficial to keep using it sparingly to keep your account "active" and your score stable.

Credit card use has become commonplace these days. Most people use credit cards for payments, but many suddenly stop using them to control expenses or avoid debt. This can actually impact their financial situation and credit score. Therefore, it's important to understand the potential harm of completely stopping credit card use. Today, we're going to explain it to you. Let's learn the details.

Impact on credit history

When you use a credit card regularly and make timely payments, it builds a good credit history. This also improves your credit score. However, if you stop using your credit card completely, new activity in your credit profile decreases. This gives banks and credit agencies less information about your current behavior, which can impact your score.

If your credit card hasn't been used for a long time, banks may consider it inactive. In this case, banks may reduce your credit limit or even close your card altogether. This can change your credit utilization ratio, which impacts your credit score. Therefore, it's clear that stopping your credit card usage completely could impact your credit score.

If you want to stop using your credit card, it's not wrong to consider it. However, you can gradually reduce your credit card usage. You can spend less and wisely. Furthermore, if you feel you no longer need a credit card, you can deactivate it with full knowledge. Giving up your card without thinking can be detrimental to your credit profile.

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