The basic steps to cancel a credit card

Call the customer service number on the back of your card or on your statement. Tell them you want to close the account. They will ask why you're leaving and may offer you a lower rate or waived fees to stay — you can accept or decline. Once you confirm you want to cancel, the card issuer will close the account and send you written confirmation by mail.

Before you call, pay off any remaining balance. Most issuers will not close an account with an outstanding balance, and even if they do, you'll still owe the money. After the account closes, you can no longer use the card, but you remain responsible for any debt.

Do not cut up or destroy the card until after the account is officially closed and you have received written confirmation. Keep that confirmation letter for your records.

Key Takeaways

  • Pay your full balance before calling to cancel, because most issuers will not close an account with money owed.
  • Call the customer service number on your card or statement and tell them you want to close the account; they may offer incentives to keep it open.
  • Request written confirmation of the cancellation and keep it with your financial records.
  • Closing a card can lower your credit score temporarily because it reduces your available credit, but the effect fades over time.
  • Do not close your oldest card first if you have multiple cards, because age of accounts affects your credit history.

Why closing a card affects your credit score

Your credit score depends partly on your credit utilization ratio — the amount of credit you're using divided by the total credit available to you. When you close a card, you lose that available credit, which can raise your utilization ratio and lower your score temporarily.

For example, if you have two cards with $5,000 limits each and you're carrying a $3,000 balance, your utilization is 30 percent. If you close one card, your available credit drops to $5,000, and your utilization jumps to 60 percent — even though you haven't borrowed any more money.

The impact is usually temporary. Credit scores recover within a few months if you keep paying on time and don't take on new debt. The older the account you're closing, the larger the potential dip, because length of credit history also affects your score.

Which card to close if you have more than one

Close a newer card before an older one. The length of your credit history matters, so keeping your oldest account open — even if you rarely use it — protects your score more than keeping a newer card.

If one card has a much higher interest rate or annual fee and you're not using it, that's the one to close. If all your cards are similar, close the newest one. If you have a card with an annual fee that you're not using, close that one regardless of age.

Do not close all your cards at once. Closing multiple accounts in a short time can damage your score more severely than closing one, and it signals financial distress to future lenders.

What happens to rewards points and cash back

Rewards points and cash back balances usually expire when you close the account, though the timing varies by issuer. Some let you redeem points for 30 to 90 days after closing; others expire immediately. Check your card's terms or call customer service before you cancel to find out your issuer's policy.

If you have a substantial rewards balance, redeem it before closing the account. Some issuers allow you to transfer points to a travel partner or convert them to a statement credit, but you need to do this before the account closes.

Handling authorized users and joint accounts

If someone else is an authorized user on your card, they will no longer be able to use it once you close the account. Let them know before you cancel so they can make other arrangements.

If the card is a joint account — meaning both of you are equally responsible for the debt — both account holders usually need to agree to close it. Call customer service to find out your issuer's policy. Some require both signatures on a written request; others allow one person to close it by phone.

After the account closes

The closed account will remain on your credit report for seven to ten years, depending on whether it was in good standing when you closed it. This is normal and does not hurt your score — in fact, a closed account in good standing can help your credit history by showing you managed the account responsibly.

Continue to monitor your credit report to make sure the account is reported as closed by the consumer. Occasionally issuers report a closed account incorrectly, which can affect your score. You can request a free credit report once per year from each of the three major bureaus — Equifax, Experian, and TransUnion — at annualcreditreport.com.

If you see the account reported as open or delinquent after you've closed it, contact the issuer in writing and ask them to correct the report. Keep copies of all correspondence.

Frequently Asked Questions

Will canceling a credit card hurt my credit score?

Yes, but usually only temporarily. Your score may drop by 5 to 10 points or more in the short term because closing the account reduces your available credit. The effect typically fades within a few months if you keep paying other accounts on time and don't increase your debt.

Can I cancel a credit card if I still owe money on it?

Most issuers will not close an account with an outstanding balance. You must pay off what you owe first. Even if an issuer does close it, you remain legally responsible for the debt and will continue to receive bills.

What happens to my rewards points when I close the card?

Rewards points usually expire when the account closes, though some issuers give you 30 to 90 days to redeem them. Check your card's terms or call customer service before canceling to find out when your points expire and whether you can transfer them.

How long does it take to close a credit card?

The account closes immediately when you call, but it can take 7 to 10 business days for the closure to appear on your credit report. Request written confirmation by mail and keep it for your records.

Should I close my oldest credit card?

No. Close a newer card instead. The age of your accounts affects your credit score, so keeping your oldest account open — even if you don't use it — protects your score better than closing it.