Canceling a credit card will usually lower your credit score, but the damage is temporary and the size depends on your other accounts and how much debt you carry.
When you close a card, two things happen to your credit report. First, your available credit shrinks — if you had a $5,000 limit and no other cards, you just lost $5,000 in borrowing power. Second, the card stops showing recent activity, which can make your credit history look older on average. Both of these changes are recorded by the three credit bureaus (Equifax, Experian, and TransUnion) and fed into the formulas that calculate your score.
The hit is usually between 5 and 50 points, depending on how much of your available credit you were using and how long you've had the card. If you carry high balances on other cards, closing one makes your situation look worse. If you have low balances everywhere and several cards open, the impact is smaller. The score typically recovers within a few months as long as you keep paying on time.
Key Takeaways
- Closing a card reduces your total available credit, which can raise the percentage of credit you are using and lower your score.
- The damage is usually temporary — scores often recover within three to six months if you pay all bills on time.
- The impact is smaller if you have other cards open with low balances, and larger if you carry high balances on remaining cards.
- Keeping an old card open but unused preserves your credit history length and available credit without requiring you to use it.
- If you close a card, do it when your balances are low and avoid opening new cards or missing payments for several months afterward.
Why closing a card affects your score at all
Credit scores are built on five main factors: payment history (35 percent of your score), amounts owed (30 percent), length of credit history (15 percent), credit mix (10 percent), and new credit inquiries (10 percent). Closing a card touches at least three of these.
The most immediate effect is on "amounts owed." Credit bureaus track your credit utilization ratio — the percentage of your total available credit that you are currently using. If you have $10,000 in available credit across all cards and you owe $3,000, your utilization is 30 percent. Close a card with a $5,000 limit and your available credit drops to $5,000. Now that same $3,000 debt means 60 percent utilization. Higher utilization signals higher risk to lenders, so your score drops.
Closing a card also affects your credit history length. The bureaus track how long your oldest account has been open and the average age of all your accounts. A closed card stops aging, which can lower your average account age over time. This is a smaller effect than utilization, but it matters more if the card you are closing is one of your oldest accounts.
How much your score will drop
There is no fixed number — the drop depends on your specific credit profile. Someone with five cards, low balances, and a long history will see almost no change. Someone with two cards, high balances, and a short history can see a 30 to 50 point drop.
The most common range is 5 to 25 points for people with decent credit and multiple accounts. If you have excellent credit (750+), the impact is often negligible because you have room to absorb it. If your score is already lower (below 650), closing a card can be more damaging because utilization matters more when you have less credit history to offset it.
The drop is not permanent. As months pass and you keep paying on time, the closed account fades from the active part of your credit report. Within six months to a year, most people see their score return to where it was before the closure.
When closing a card makes sense despite the score hit
A lower score for a few months is worth it if the card is costing you money or creating a real problem. Annual fees add up — if a card charges $95 a year and you never use it, closing it saves you money. A high interest rate on a card you cannot stop using is a different story; in that case, paying it off and keeping it open is usually smarter.
Closing a card also makes sense if you are trying to reduce temptation to overspend. If having access to credit makes you carry balances you cannot afford, closing the account is a legitimate financial decision even if it temporarily lowers your score. The long-term benefit of not accumulating debt outweighs a temporary score dip.
If you are about to apply for a mortgage or car loan, close the card after you get approved, not before. Lenders pull your credit report during the approval process, and a lower score can affect your interest rate. Wait until the loan is funded and the hard inquiry is no longer fresh on your report.
How to minimize the damage if you decide to close a card
Pay down your balances on all other cards before you close one. If you can get your utilization below 30 percent across your remaining accounts, the closure will have less impact because you are not suddenly pushing yourself into a higher utilization bracket.
Close the card when you have no major credit needs coming up. Do not close a card and then apply for a new one, a mortgage, or a car loan within the next three to six months. Each new application triggers a hard inquiry, which lowers your score further. Space out credit applications.
If the card has been open for a long time, consider keeping it open instead. Call the card issuer and ask if they will waive the annual fee or lower the interest rate. Many issuers will negotiate to keep a long-standing customer. An old card sitting unused does not hurt your score — it actually helps by keeping your average account age high and your available credit up.
What happens to rewards or points when you close a card
Most card issuers let you use your rewards before you close the account, but the rules vary. Some programs let you redeem points for cash back or travel after the account closes; others require you to use them before closure. A few programs expire your points immediately when the account closes.
Check your card's terms or call the issuer before you close it. If you have accumulated points, redeem them first. If the card offers travel rewards that are hard to use quickly, you might want to keep the card open a few more months to use them up.
Frequently Asked Questions
Will closing a credit card hurt my credit if I have other cards open?
The impact is smaller if you have other cards, but you will still see a dip. If your other cards have low balances and you have been building credit for years, the drop might be only 5 to 10 points. If your other cards are maxed out, closing one makes your situation look worse and the drop can be 30 points or more.
How long does it take for my score to recover after I close a card?
Most people see their score return to its previous level within three to six months, assuming they pay all bills on time and do not open new accounts. The exact timeline depends on how much damage was done and how active the rest of your credit profile is.
Should I close a card I am not using instead of keeping it open?
Keeping an unused card open is usually better for your score because it preserves your available credit and your credit history length. The only reason to close it is if it has an annual fee you do not want to pay. If there is no fee, leaving it open costs you nothing and helps your score.
Can I reopen a credit card after I close it?
Some issuers will reopen a recently closed account if you call within a certain window, usually 30 to 60 days. Others treat a closure as permanent and will not reopen it. If you are unsure, call the issuer before you close the account and ask their policy. Reopening is faster than applying for a new card and may not trigger a hard inquiry.
Does closing a card affect my payment history?
Closing a card does not erase your payment history on that account — the record stays on your credit report for seven years. However, the account stops showing recent activity, which can make your overall payment history look less current. This is a minor effect compared to utilization, but it is one reason to keep cards open if you can.