How to use Amazon to avoid credit card shutdowns

Apr 30, 2020

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Editor’s note: This post has been updated with the latest information.

One of the big mistakes in the credit card hobby is having an old credit card account closed for lack of use. This may have a negative impact on your credit score — both from an average age of accounts and a utilization perspective.

Credit card issuers don’t want to keep a cardholder around who doesn’t spend money on his or her card. Even if you don’t use benefits from a card, there’s a cost for issuers just to maintain your account, which is why credit card companies may eventually shut down inactive accounts.

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Strategy for “sock-drawered” cards

The easiest way to prevent this is pretty obvious: spend on the credit card. But or cards that you have “sock-drawered” — or stashed somewhere, since you don’t have room in your wallet — cycling through all of the unused cards via day-to-day purchases can be a hassle.

Enter Amazon’s Reload Your Balance option, through which the e-tailer will let you use a credit card to reload your balance. You can reload any amount above $0.50, and Amazon doesn’t care how many cards you use. Case in point: I have 38 cards in my Amazon profile.

Related reading: Ordering from Amazon? You could earn 5x bonus points on your next purchase

About every six months, I review the credit cards that I haven’t used recently and load $5 from each one onto my Amazon Gift Card balance:

You could do less than $5, but some issuers won’t bother to bill you for smaller purchases. For example, I’ve had a $0.99 Amazon reload waived by Barclaycard. Not wanting to tempt fate and have these smaller purchases not reset the inactive account clock, I use $5 reloads.

(While we’re on the topic, Amazon Reload Your Balance is also a great way of getting rid of any Visa or American Express gift cards you may have received. Amazon doesn’t mind taking prepaid gift cards — whether it’s a brand-new one that you got as a gift or the last $2.46 that you have on a card that you just can’t figure out how to use.)

You might be wondering what to do with all of this money you’re accumulating in your Amazon account. If you’re like me, you still want to get good purchase protection and price protection on goods you buy, as well as excellent travel insurance for flights you book. So, you’ll still want to use your credit card for most purchases. The best use of these funds is for general household items, either purchased through Amazon or by buying a gift card through Amazon for stores like Bed Bath and Beyond, Whole Foods and others.

For me, since I’m on the road all the time, I usually end up buying Airbnb gift cards on Amazon with my balance. Unfortunately, this means that I miss out on 3x earnings on my Chase Sapphire Reserve, but it’s an easy way for me to use up the funds.

Related reading: Should you redeem Amazon Prime Card rewards for travel?

Additional reporting by Chris Dong.

Featured photo by Thomas Trutschel/Photothek via Getty Images.

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