ConsumerWatch: Unused Credit Cards Could Lower Your Credit Score

(CBS 5) - A standard practice by banks to cancel inactive accounts could cost consumers a lower credit score.

Jacob Gibson from NerdWallet, a credit card comparison website, said the practice has become more common. "In the wake of the financial crisis over the last couple of years, they've been cutting credit across the board," he said.

Gibson adds prior to the Credit Card Accountability Responsibility and Disclosure Act of 2009 or CARD Act, banks were allowed to charge for inactive accounts. But since banks are no longer able to charge, Gibson said banks are more reluctant to keep inactive accounts open.

"They are definitely in the business of penalizing inactivity," he said. "They don't want you to have one of their cards that you're not going to use because they don't make any money."

One Bay Area man learned this practice dropped his credit score by 60 points after Wells Fargo closed his credit card. But according to Gibson, banks send out a 45-day notice before an account is closed.

Gibson also added consumers should make small purchases to prevent long-standing credit cards from being closed.