Understanding Credit Card Inactivity Fee

Have you ever heard about credit card inactivity fees? It’s something that not many people are aware of, but it’s definitely something worth knowing.


Understanding Credit Card Inactivity Fee

What is a credit card inactivity fee?

A credit card inactivity fee is a charge imposed by credit card companies when a cardholder does not use their credit card for a certain period of time. This fee is often implemented to encourage cardholders to use their credit cards regularly and to generate revenue for the credit card company.

How does a credit card inactivity fee work?

When a credit card is considered inactive, which means there has been no activity for a specific period of time, the credit card company may impose an inactivity fee. This fee is typically charged monthly or annually and is added to the cardholder’s account as a separate charge.

Why do credit card companies charge inactivity fees?

Credit card companies charge inactivity fees for several reasons. Firstly, these fees help cover the costs associated with maintaining a credit card account, such as customer service, account management, and fraud protection. Secondly, inactivity fees act as a deterrent against cardholders who only keep a credit card for emergency purposes or as a backup option. By charging a fee, credit card companies incentivize cardholders to actively use their credit cards.

How much is typically charged as an inactivity fee?

The amount charged as an inactivity fee varies among credit card companies. Some credit card companies may charge a flat fee, such as $10 or $15, while others may charge a percentage of the outstanding balance on the card. It is important to read the terms and conditions of your credit card agreement to understand the specific inactivity fee that may apply to your card.

Is there a minimum amount required to trigger the inactivity fee?

In most cases, there is no minimum amount required to trigger the inactivity fee. Even if you have a zero balance on your credit card, you may still be subject to the inactivity fee if you do not use your card during the specified period. However, the terms and conditions of your credit card agreement may include specific provisions regarding the minimum activity required to avoid the fee.

Are there any exceptions or exemptions to the inactivity fee?

Some credit card companies may exempt certain types of credit cards from inactivity fees. For example, cards designed for specific purposes, such as store credit cards or cards issued for business use, may not be subject to inactivity fees. Additionally, some credit card companies may waive the fee for cardholders who have a long-standing relationship with the company or who meet certain spending thresholds.

How often is the inactivity fee charged?

Inactivity fees are usually charged on a monthly or annual basis, depending on the credit card company’s policy. If your credit card remains inactive for a prolonged period, the fee may be charged retroactively for each month or year of inactivity. It is important to review your credit card statements regularly to identify any inactivity fees that have been charged to your account.

Can the inactivity fee be waived?

In some cases, the inactivity fee may be waived by contacting the credit card company and explaining the reason for the inactivity. If you have a valid reason for not using your credit card, such as a financial hardship or a temporary absence, the credit card company may be willing to waive the fee as a gesture of goodwill. However, there is no guarantee that the fee will be waived, and it ultimately depends on the credit card company’s discretion.

How to avoid or minimize credit card inactivity fees?

The best way to avoid credit card inactivity fees is to use your credit card regularly. Even small purchases can help keep your account active and prevent the fee from being charged. Consider using your credit card for everyday expenses such as groceries, gas, or online purchases. Set up automatic payments for recurring bills or subscriptions to ensure regular activity on your credit card.

If you have multiple credit cards, it may be challenging to keep all of them active. In such cases, prioritizing the cards that offer the most benefits or rewards can help you justify using them regularly. Additionally, consider closing any credit card accounts that you no longer need or use to avoid inactivity fees altogether.

What are the consequences of not paying the inactivity fee?

If you do not pay the inactivity fee charged to your credit card, it will typically be treated as any other unpaid balance. The credit card company may add late fees, interest charges, and penalties to the unpaid amount. Moreover, failing to pay the inactivity fee can have a negative impact on your credit score. It is important to address any outstanding balances promptly to avoid further financial repercussions.

What should you do if you are charged a credit card inactivity fee?

If you discover that you have been charged a credit card inactivity fee, the first step is to contact your credit card company to inquire about the fee. Politely explain your situation and inquire if the fee can be waived as a one-time courtesy. If the credit card company is unwilling to waive the fee, you may consider paying the fee to avoid additional charges, especially if it is a relatively small amount. However, if you believe the fee has been charged in error, you can dispute the charge with the credit card company and provide any supporting documentation.

Are there any alternatives to avoid an inactivity fee?

If you do not want to incur an inactivity fee but still want to keep the credit card account open, there are alternatives to consider. Some credit card companies allow cardholders to change their credit card type to one that does not charge an inactivity fee. For example, you may be able to switch to a different credit card offered by the same company that has no inactivity fee or offers different terms and benefits.

Alternatively, you can explore credit cards from other companies that do not charge inactivity fees. Many credit card comparison websites and financial institutions provide information on credit cards that have no inactivity fees or offer more favorable terms. Before applying for a new credit card, carefully review the terms and conditions to ensure that it meets your needs and preferences.

What are the potential benefits or drawbacks of credit card inactivity fees?

The implementation of credit card inactivity fees has both benefits and drawbacks. From the credit card company’s perspective, these fees help generate revenue and prevent cardholders from keeping credit cards without actively using them. Inactivity fees also encourage cardholders to engage in regular transactions, which may lead to increased sales for merchants.

However, from the cardholder’s perspective, inactivity fees can be seen as an unwelcome additional cost. Some cardholders may feel that they are being penalized for not using their credit cards frequently, especially if they have valid reasons for the inactivity. Inactivity fees can also be a burden for those with multiple credit cards who may find it challenging to keep all of their accounts active.


Understanding credit card inactivity fees is essential for managing your credit card accounts effectively. By being aware of the terms and conditions associated with these fees, you can take proactive measures to avoid them or minimize their impact on your finances. Remember to regularly review your credit card statements, use your credit cards responsibly, and communicate with your credit card company if you have any concerns or questions regarding inactivity fees.