statjunk

It actually costs banks money for you to have an inactive account. Credit cards are considered variable draw unsecured loans and are subject to the highest capital ratio of 100%. They have to retain capital to the tune of 100% of the their retained capital level which is somewhere in the 6% range. So if you have a $1,000 limit with a zero balance they have to keep approximately $60 in retained capital to cover future losses.

That is money that cannot be invested and is otherwise costing them in terms of lost revenues and unearned interest.

It's a business proposition.

To the guy that claims he doesn't buy anything on credit. You're in all liklihood doing yourself a great disservice. Properly leveraging your finances is the most profitable way to use your earnings and savings. In addition you have liquidity risks that you haven't priced.

Tom

SunRiverMan

Cabelas sent me a letter and said they closed my account. I called and asked why because I never paid them late and they too said credit score. What really happened is someone tried to use one of my other credit cards and I put fraud alert on my credit. I think Cabelas is in financial trouble.

I now use and love Gander Mountain. I will never use or step foot in a Cabelas again. They lost a customer for life and I spend allot on hunting and fishing. SRM

Gander Mountain