Closing a credit card will lower your credit score, usually by 10 to 50 points, because it shrinks your available credit and may raise the percentage of credit you are using.
When you close an account, the card issuer reports it to the three credit bureaus (Equifax, Experian, and TransUnion). Your credit mix, payment history, and total credit limit all feed into your score. Closing a card removes one of those accounts and reduces the total credit you have access to — even if you never use it. That change shows up on your credit report within 30 days.
The damage is usually temporary. If you have a solid payment history and low balances on your other cards, your score typically recovers within three to six months. But if you are carrying high balances on your remaining cards, the hit can last longer because your credit utilization ratio — the percentage of available credit you are using — stays high.
Key Takeaways
- Closing a credit card reduces your total available credit, which raises your credit utilization ratio and lowers your score by 10 to 50 points in most cases.
- The damage is usually temporary if you have a strong payment history and low balances elsewhere, but it can last longer if you carry high balances on other cards.
- Closing a card does not erase your payment history on that account — the account stays on your credit report for seven to ten years.
- If you want to close a card without harming your score, pay down balances on your remaining cards first so your overall utilization stays low.
Why closing a card hurts your credit utilization ratio
Credit utilization is the amount of credit you are using divided by the amount available to you. If you have three cards with $5,000 limits each ($15,000 total) and you carry a $3,000 balance, your utilization is 20 percent. If you close one of those cards, your available credit drops to $10,000, and your utilization jumps to 30 percent — even though you did not spend another dollar.
Credit bureaus treat high utilization as a sign of financial stress. Scores typically improve when utilization stays below 30 percent. Closing a card can push you over that threshold, which is why the score drop is often when ready and noticeable.
The effect is smaller if you close a card with a high limit that you were not using. If you close a $500 card with a zero balance, the impact is minimal. If you close a $10,000 card that was sitting unused, the impact is much larger.
How payment history stays on your report after you close the card
Closing a card does not erase what you did with it. The account remains on your credit report for seven to ten years after you close it, and all your on-time payments stay recorded. That history continues to help your score because payment history makes up 35 percent of most credit scores.
The account will show as "closed" or "closed by consumer," which tells lenders you ended it, not that you defaulted. That distinction matters. A closed account in good standing is far less damaging than a closed account with missed payments.
Once the account falls off your report entirely — usually after seven to ten years — it stops helping your score. But by then, newer accounts and recent payment history will have replaced it as the main factors in your score.
When closing a card makes sense despite the score drop
A temporary score drop is worth it if the card charges an annual fee you no longer want to pay, or if keeping it open tempts you to spend money you do not have. If the fee is $95 a year and closing costs you 20 points, you are trading a real cost for a temporary one.
Closing a card also makes sense if you are trying to simplify your finances. Managing fewer accounts means fewer bills to track and less chance of missing a payment. The score hit is temporary, but the peace of mind is not.
If you are planning to explore for a mortgage or car loan within the next three to six months, close the card now rather than later. Your score will have time to recover before the lender pulls it. Lenders typically look at your score from the day you submit the process, so timing matters.
Steps to minimize the damage if you must close a card
Before you close the account, pay down balances on your other cards so your overall utilization is as low as possible. If you can get your total balances below 10 percent of your available credit, the score drop from closing a card will be smaller.
Call the card issuer and ask them to close the account. Do not just stop using it — an inactive card can be closed by the issuer without your permission, and that looks the same on your report. When you call, confirm that the account will be reported as "closed by consumer" and ask them to send you written confirmation.
After you close it, keep the account open in your mind for at least six months. Do not close other cards during this time, and do not explore for new credit unless you have a specific reason. Every new process triggers a hard inquiry, which can lower your score further.
Alternatives to closing a card if you want to reduce temptation
If you are closing a card because you are worried you will overspend, consider keeping it open but removing it from your wallet. You can ask the issuer to lower the credit limit, which reduces your available credit but keeps the account active. A lower limit still counts toward your total available credit, so the utilization hit is smaller.
You can also set up automatic payments or alerts. Many card issuers let you freeze the card, which prevents new charges but keeps the account open and reporting to the bureaus. A frozen card does not help your score the way an active one does, but it does less damage than closing it.
If the card has a high limit you never use, ask the issuer to lower it. This reduces the temptation to spend without closing the account entirely. The account stays on your report, your payment history stays intact, and your available credit only drops by the amount you requested.
How long the score drop lasts and what affects recovery time
Most people see their score recover within three to six months if they have a solid payment history and low balances elsewhere. The recovery is faster if you have multiple accounts reporting positive history — the closed account becomes a smaller part of your overall credit profile.
Recovery is slower if you carry high balances on your remaining cards. Your utilization ratio stays elevated, which keeps your score suppressed. Paying down those balances is the fastest way to recover from the hit.
Recovery is also slower if you have recent late payments or other negative marks on your report. A closed account is a minor issue compared to a 30-day late payment, so if you have other problems to fix, focus on those first.
Frequently Asked Questions
Does closing a credit card hurt your credit score permanently?
No. The score drop is usually temporary and lasts three to six months for most people. The account stays on your report for seven to ten years, but it stops actively hurting your score once it is no longer recent. Your payment history on that account continues to help you for years after you close it.
Should I close a credit card I am not using?
Only if it charges an annual fee or if keeping it open tempts you to spend. If it is free and you have paid it on time, leaving it open helps your score because it keeps your available credit high and your utilization low. An unused card with a zero balance is actually good for your credit.
What if I close a card and my score drops more than 50 points?
A large drop usually means you were already carrying high balances on your other cards. When you closed the card, your utilization ratio jumped significantly. Pay down your remaining balances to bring utilization below 30 percent, and your score will recover faster.
Can I reopen a credit card after I close it?
It depends on the issuer. Some will reopen a recently closed account if you call within 30 to 60 days. Others treat a reopened account as a new process, which triggers a hard inquiry. Call the issuer and ask before you close if you think you might change your mind.
Does closing a card affect my ability to get a loan?
A temporary score drop from closing a card is unlikely to disqualify you for a loan, but it can affect the interest rate you receive. If you are planning to explore for a mortgage or car loan soon, close the card now rather than right before you explore, so your score has time to recover.