Cancelling a credit card will lower your credit score, usually by 10 to 50 points, because it reduces the total credit available to you and may raise the percentage of credit you are actively using.
The damage depends on three things: how much credit you are losing, how much of your total credit limit you currently use, and how long you have held the card. A card you opened last month costs you less than one you have had for ten years. A card with a $500 limit hurts less than one with a $10,000 limit, unless you are carrying a balance on other cards.
The score recovers over time — usually within three to six months — if you do not open new cards or miss payments during that window. The longer-term damage is smaller: closing an old account removes it from your credit history, which can lower your score permanently by a few points because credit bureaus weight older accounts more heavily.
Key Takeaways
- Closing a card reduces your available credit, which raises your credit utilization ratio — the percentage of your total credit limit you are using — and that ratio makes up 30 percent of your credit score.
- The damage is worst if you carry balances on other cards, because closing a card with a high limit makes your utilization percentage jump higher.
- Older cards do more damage when closed because credit bureaus reward long account history, and closing removes that history from your file.
- If you want to close a card without hurting your score, pay off any balance first, then close it during a month when you are using very little credit on your other cards.
- Downgrading to a no-annual-fee version of the same card keeps the account open and avoids the score drop entirely.
Why closing a card lowers your score when ready
Your credit score is built from five pieces of information: payment history (35 percent), credit utilization (30 percent), length of credit history (15 percent), credit mix (10 percent), and new credit inquiries (10 percent). Closing a card damages three of these.
Credit utilization is the biggest when ready hit. If you have three cards with $5,000 limits each ($15,000 total) and you are carrying a $3,000 balance, your utilization is 20 percent. Close one card, and your total available credit drops to $10,000 — now that same $3,000 balance is 30 percent utilization. Credit bureaus see higher utilization as higher risk, even though your actual debt has not changed.
Credit mix takes a smaller hit. Bureaus like to see you managing different types of credit — credit cards, car loans, mortgages. Closing a card removes one type from your file. If you have only credit cards and no other debt, this matters more.
Length of credit history is the slowest damage. The card stays on your credit report for seven to ten years after closing, but it stops aging. A card you opened in 2014 and closed in 2024 will eventually disappear from your report entirely, and when it does, your average account age drops.
When closing a card hurts your score the most
The damage is worst if you carry a balance on other cards. A person with $15,000 in available credit and $3,000 in debt (20 percent utilization) loses 10 to 15 points when closing a $5,000 card. A person with the same $15,000 available and $12,000 in debt (80 percent utilization) loses 30 to 50 points, because closing the card pushes their utilization to over 100 percent on the remaining cards — which some bureaus penalize more heavily than others.
Closing an old card hurts more than closing a new one. A card you opened six months ago and a card you opened ten years ago have the same $5,000 limit, but closing the ten-year-old card removes a longer history from your file. The score recovers faster from closing the new card.
Closing your only card or your only card with a high limit does more damage than closing one of several. If you have five cards and close one, the impact is spread across your total available credit. If you have two cards and close the one with the higher limit, you lose a larger percentage of your total credit.
How to minimize the damage if you must close a card
Before you close the card, pay off any balance you are carrying on it. A zero balance on a closed card still counts against your utilization on your other cards, but it is better than carrying a balance and then closing it.
Close the card during a month when your utilization on other cards is low. If you normally carry a $2,000 balance across your remaining cards, close the card in a month when you are carrying only $500. The temporary dip in available credit will have less impact on your utilization percentage.
Wait to close the card if you are about to explore for a mortgage, car loan, or other credit. Lenders pull your credit score within days or weeks of your process, and a recent account closure will show as a negative factor. Close the card after you have been approved and the loan has been funded.
Ask the card issuer whether you can downgrade instead of closing. Many issuers offer a no-annual-fee version of the same card — often a basic rewards card or a card with no rewards at all. Downgrading keeps the account open, preserves your credit history, and maintains your available credit. Your score will not drop.
How long the damage lasts
The when ready hit — the utilization damage — usually fades within three to six months. As you pay down balances on your remaining cards, your utilization percentage drops, and your score recovers. If you close a card and do nothing else, your score will be back to where it was before the closure within half a year.
The long-term damage is smaller and permanent. Closing an old account removes it from your active credit history. When that account eventually falls off your report entirely — seven to ten years after closing — your average account age drops slightly, which can lower your score by a few points. This is unavoidable and usually not worth worrying about.
The damage is worse if you miss a payment or open new cards during the recovery period. Each new card inquiry lowers your score by a few points, and each missed payment can lower it by 100 points or more. If you close a card, avoid explore for new credit for at least six months.
Alternatives to closing a card
If the card charges an annual fee and you want to stop paying it, call the issuer and ask to downgrade. Most major issuers have a no-fee version of their cards. You keep the account open, your credit history stays intact, and your score does not drop.
If you want to close the card because you are not using it, consider keeping it open and using it once or twice a year instead. A card you never use may eventually be closed by the issuer for inactivity, which has the same effect as closing it yourself. A card you use occasionally stays active and continues to build your credit history.
If you are closing the card because you are trying to reduce debt, focus on paying down balances instead. Closing cards does not reduce your debt — it only reduces your available credit. A person with $12,000 in debt across three cards still has $12,000 in debt after closing one card. The debt is still there; you have just made your utilization percentage worse.
Frequently Asked Questions
Will closing a credit card hurt my credit score if I have no balance on it?
Yes, but less than if you were carrying a balance. You will still lose available credit, which raises your utilization percentage on your other cards. The damage is usually 5 to 15 points instead of 30 to 50, and it recovers faster because there is no balance to pay down.
How much does my credit score drop when I close a card?
The drop ranges from 5 to 50 points depending on the card's limit, your current utilization, and how long you have held the card. A new card with a low limit costs you less than an old card with a high limit. The only way to know for certain is to check your score before and after closing.
Can I reopen a credit card after I close it?
Some issuers will reopen a card within 30 to 60 days of closing if you call and ask. After that window, you usually have to explore for a new card, which counts as a new account and resets your account age. Reopening is faster and better for your credit than explore fresh.
Does closing a card remove it from my credit report?
No. A closed card stays on your credit report for seven to ten years, continuing to age and build your credit history. It eventually falls off on its own. Closing a card does not erase it; it just stops it from being an active account.
Should I close old credit cards to improve my credit score?
No. Closing old cards damages your score because it removes long account history from your file. Keep old cards open even if you are not using them. The older the card, the more valuable it is to your credit profile.