Closing a credit card usually hurts your credit score, but the damage is temporary and depends on which card you close and what your other accounts look like.
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 closed that card, you now have $5,000 less credit available overall. Second, the card stops showing recent activity, which means your credit mix (the variety of account types you hold) may narrow. Both of these changes can lower your score by anywhere from a few points to 50 or more, depending on your situation.
The hit is not permanent. Your score will recover as you keep paying other accounts on time and your credit utilization (the percentage of available credit you actually use) improves. The closed account will stay on your report for about 10 years, but its impact fades after a few months to a year.
Key Takeaways
- Closing a card reduces your total available credit, which can raise your credit utilization ratio and lower your score immediately.
- The damage is usually temporary — your score typically recovers within a few months to a year if you keep other accounts in good standing.
- Closing your oldest card does more damage than closing a newer one, because age of accounts matters to your score.
- If you want to close a card without harming your score as much, close a newer card with a low limit after paying off the balance.
- Leaving a card open but unused is often better for your score than closing it, as long as there is no annual fee.
How closing a card affects your credit utilization
Credit utilization is the percentage of your total credit limit that you are currently using. If you have $10,000 in total credit limits across all your cards and you are carrying a $2,000 balance, your utilization is 20 percent. Credit scoring models treat utilization as a sign of financial stress — the higher it is, the riskier you look.
When you close a card, your total available credit shrinks, which makes your utilization ratio go up even if you do not charge anything new. If you close a $5,000 card and your total limits drop from $10,000 to $5,000, and you still have that $2,000 balance, your utilization jumps from 20 percent to 40 percent. That change alone can lower your score. The damage is worse if you close a high-limit card or if you already carry balances on your other cards.
The easiest way to minimize this damage is to pay off the card completely before you close it. That way, your utilization does not rise when the card disappears from your available credit.
Why the age of the account matters
Credit scoring models reward you for having a long history of accounts. The longer your oldest account has been open, the better your score looks. When you close your oldest card, you lose that benefit — your average account age drops, and your score can fall as a result.
Closing a newer card (one you opened in the last few years) does much less damage than closing a card you have held for 10 or 20 years. If you have to close something, close the newest card first. If your oldest card has no annual fee, it is almost always better to leave it open and unused than to close it.
When closing a card makes sense despite the score hit
A lower credit score is a real cost, but it is not always the biggest cost. If a card charges an annual fee and you are not using it, the fee is money out of your pocket every year. In that case, closing the card and taking the score hit may be the right choice — especially if you have other cards open and your score is already strong.
You might also close a card if you are trying to reduce temptation to overspend, or if you are concerned about fraud or identity theft on that account. These are legitimate reasons to close a card even though your score will drop. Just know what you are trading: a temporary score hit for peace of mind or to stop paying a fee.
If you do close a card with an annual fee, close it after you have paid off the balance completely. That way you avoid paying interest charges on top of the fee.
How long the damage lasts
The immediate hit to your score from closing a card can be 10 to 50 points or more, depending on how much your utilization rises and how old the account is. But this damage is not permanent.
Your score will start to recover within a few months as you keep making on-time payments on your other accounts. After about a year, the impact of closing the card is usually much smaller. The closed account stays on your credit report for roughly 10 years, but after the first year or so, it stops affecting your score significantly.
If you are planning to apply for a mortgage, car loan, or other major credit in the next few months, closing a card right before you apply is bad timing — your score will be lower than it needs to be. If you can wait until after you have the loan, or if you can close the card several months before you apply, that is better.
Alternatives to closing a card
If a card has no annual fee, leaving it open is almost always better for your score than closing it. You can stop using it — just put it in a drawer. The account will stay active on your report, your available credit stays high, and your score does not drop.
If you are worried about fraud or identity theft, you can call the card issuer and ask them to freeze the account or mark it as inactive. Some issuers will do this without closing the account, which means it stays on your report but you cannot use it. That gives you the score benefit of keeping the account open without the risk of someone using the card.
If a card does charge an annual fee and you want to keep it, call the issuer and ask if they will waive the fee or move you to a different version of the card with no fee. Many issuers will do this if you have been a customer for a while and have a good payment history.
What to do before you close a card
Before you close any credit card, take these steps in order:
- Pay off the entire balance so you owe $0. Do not close a card while you still owe money on it.
- Check your credit report to see if any other accounts are linked to this card (for example, if you set up automatic payments from this card to pay other bills).
- Update those automatic payments to come from a different card or bank account so they do not fail.
- Call the card issuer and ask them to close the account. Do this by phone, not online, so you have a record of the request.
- Ask the issuer to confirm in writing that the account is closed and the balance is $0. Keep this confirmation.
- Check your credit report again in a few weeks to make sure the closed account shows up correctly.
Frequently Asked Questions
Will closing a credit card hurt my credit score?
Yes, closing a card usually lowers your score because your available credit shrinks and your utilization ratio rises. The damage is typically 10 to 50 points or more, depending on the card's age and limit. The hit is temporary — your score usually recovers within a few months to a year.
Is it better to close a card or leave it open and unused?
If the card has no annual fee, leaving it open is almost always better for your score. An unused card with no fee costs you nothing and helps your credit. Close it only if it has an annual fee you do not want to pay, or if you have other reasons like fraud concerns.
Does closing a card remove it from my credit report?
No. A closed account stays on your credit report for about 10 years. It will not disappear, but its impact on your score fades after the first year or so. Lenders can still see that you had the account and that you closed it.
Can I reopen a credit card after I close it?
Sometimes, but it depends on the issuer. Some will reopen a recently closed account if you call within a few months. Others will treat a reopen as a new application, which means a hard inquiry and a new account age. Call the issuer and ask before you close if you think you might want to reopen it.
Should I close a card before applying for a mortgage?
No. Close a card several months before you apply for a mortgage, not right before. Your score will be lower immediately after closing, and lenders will see the recent closure. If you can wait, close the card at least three to six months before you apply.