I Have an Old Credit Card I Never Use. Here's Why I Won't Close It

Here's why hanging on to a credit card can pay off -- even when it largely goes unused.

One of the first credit cards I signed up for was a cash back credit card. It offered 1% back on purchases with pretty much no opportunity to score bonus points beyond that threshold.

At the time, that seemed like a decent deal, especially as someone without the most robust credit history.

But since then, I've applied for my share of different rewards credit cards, all of which offer much more generous perks. One card, for example, gives me 4% cash back on gas, and seeing as how my family takes a lot of road trips, that's a nice perk to have.

In fact, that credit card of mine with the blanket 1% cash back program pretty much never gets used. But here's why I refuse to close out that account.

It's all about preserving my credit score

My credit score is in pretty good shape for a few reasons:

• I pay my bills on time
• I don't carry large balances on my credit cards
• I have a reasonably healthy credit mix consisting of various credit cards as well as a mortgage

But another reason my score is high is that I have a couple of credit cards that have been open for well over a decade -- including the aforementioned card I don't use. And those cards are actually helping my credit score stay strong.

One important factor that goes into calculating a credit score is the length of your credit history. Having long-standing accounts open can help your score, which is precisely why I won't close that old card of mine. If I do, my score could take a hit despite the fact that I'm a responsible borrower who isn't late with bills and generally pays off her credit cards in full each month.

Of course, one thing that helps is the fact that my old credit card doesn't impose an annual fee. If it did, I'd have to reconsider my decision to keep it open, because there's little sense in paying a fee on a card that does nothing for you. But since I'm able to hang on to that card for free, it really doesn't hurt me to have it on hand.

Here's another reason why I keep that card: Because I've had it for a while, it gives me a pretty generous spending limit.

As I mentioned, I'm not in the habit of carrying a credit card balance, and that's because I don't like paying interest charges.

But another factor that goes into a credit score is one's credit utilization ratio, or the amount of available credit being used at once. The lower that ratio, the more it helps your score. And if I were to ever need to carry a balance, having a higher total spending limit across all of my cards would help me avoid credit score damage. If I cancel that card, my total spending limit will decrease by many thousands of dollars.

Also, there's something to be said about having an extra credit card to fall back on in case of a true emergency. Granted, I have money in my savings account to get me through an unplanned expense or a period of unemployment. But that old credit card just adds another layer to that safety net. So I plan to keep it open for the foreseeable future.

If you have an old credit card you rarely use, think twice before canceling it. You may find that you have plenty of good reasons to keep it open and active -- even if that card mostly just sits in your desk drawer.