Closing a credit card usually lowers your score, sometimes by 10 to 45 points, because it reduces the total credit available to you and can raise the percentage of credit you're using on your remaining cards.
The damage depends on three things: how much credit that card represented, whether you had a balance on it, and how much you owe on your other cards. A card with a $500 limit closing when you have $10,000 in total available credit hurts less than closing a $10,000-limit card. If you pay off the balance before closing it, the hit is usually smaller than if you close it with money still owed.
The score drop is often temporary. Most people see their score begin recovering within a few months as the closed account ages and the impact of the lost credit limit fades. However, the account stays on your credit report for up to 10 years, so it continues to affect your score during that time, though less severely as time passes.
Key Takeaways
- Closing a card reduces your available credit, which can raise your credit utilization ratio and lower your score by 10 to 45 points depending on the card's limit.
- Paying off the full balance before closing the card causes less damage than closing it with a balance still owed.
- The score drop is usually temporary and begins recovering within a few months, though the closed account remains on your report for years.
- If you need to close a card, doing so when your score is already high or when you have low balances on other cards reduces the impact.
- Keeping old cards open with zero balance, even if unused, protects your available credit and helps your score more than closing them.
How Credit Utilization Ratio Works
Your credit utilization ratio is the percentage of your total available credit that you're currently using. If you have $10,000 in total credit limits across all cards and you're carrying $3,000 in balances, your utilization is 30 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, you lose the credit limit on that card but keep the balances on your other cards. If you close a card with a $5,000 limit and no balance, your total available credit drops by $5,000. If you still owe $3,000 on your remaining cards, your utilization jumps from 30 percent to roughly 38 percent. That increase alone can lower your score.
The effect is strongest if the closed card had a high limit or if you already carry high balances on other cards. Closing a card when you have low balances everywhere causes less damage than closing one when you're already using a large percentage of your available credit.
Why Closing a Card with a Balance Hurts More
If you close a card while still carrying a balance, the damage compounds. You lose the credit limit, which raises your utilization ratio, and you're also signaling that you couldn't pay off the debt before closing the account. Lenders see this as higher risk.
The best practice is to pay off the entire balance, then wait a month or two to let the $0 balance report to the credit bureaus, and only then close the card. This way, the closed account shows a paid-off status rather than a balance transfer or unpaid debt. The score hit is still real, but it's smaller than if you close the card with money still owed.
How Long the Score Drop Lasts
Most people see the lowest point in their score within one to three months after closing a card. From there, the score typically begins climbing again. Within six to twelve months, many people recover most or all of the points they lost, assuming they don't make other changes to their credit profile—like missing a payment or opening new cards.
The closed account itself stays on your credit report for up to 10 years, so it continues to have some effect on your score throughout that time. However, the impact weakens significantly after the first year. An account closed five years ago matters far less than an account closed five months ago.
If your score is already low or you're planning to explore for a mortgage or loan in the next few months, closing a card right before that process can work against you. Lenders pull your score at the moment you explore, so timing matters.
When Closing a Card Causes Less Damage
The score drop is smallest when you close a card that had a small limit relative to your total available credit. If you have $50,000 in total limits and you close a card with a $1,000 limit, the impact on your utilization ratio is minimal.
Closing a card also hurts less if you have very low balances on your remaining cards. If you owe $500 total across all your other cards, closing a card won't raise your utilization ratio much, no matter what the closed card's limit was. The damage is also smaller if your score is already high—a score of 750 can absorb a 20-point drop and still be in good shape, while a score of 650 cannot.
If you must close a card, doing it when your score is strong and your balances are low minimizes the harm. Avoid closing multiple cards at once, as that compounds the utilization problem.
Alternatives to Closing a Card
Keeping a card open with a zero balance is almost always better for your score than closing it. The card still counts toward your available credit, which keeps your utilization ratio lower. If you're worried about fraud or temptation, you can cut up the physical card or lock it away—the account stays open and active without you using it.
Some people close cards because they're paying annual fees. If that's your reason, call the card issuer and ask if they'll waive the fee or switch you to a no-fee version of the same card. Many issuers will do this to keep the account open. If they won't, then closing the card may be worth the score hit to stop paying the fee.
If you're closing a card because you're trying to reduce debt, focus on paying down the balances on your remaining cards instead. That lowers your utilization ratio without losing available credit, and it helps your score more than closing the card would.
What Happens to the Closed Account on Your Report
After you close a card, the account stays on your credit report for up to 10 years. During that time, it shows as "closed by consumer" or "closed by issuer," depending on who initiated the closure. A closed account in good standing (with no missed payments) actually looks better than a closed account with a history of late payments.
The closed account continues to count in your credit history length, which is another factor in your score. If the card was old, closing it can lower your average account age, which can hurt your score a little. If the card was new, closing it has less effect on your history length.
If you closed a card and later regret it, you can sometimes call the issuer and ask them to reopen it. Many issuers will do this within a short window (usually 30 to 60 days), though they may not reopen it if you closed it due to fraud or dispute. Once the account is reopened, your available credit returns and your utilization ratio improves.
Frequently Asked Questions
How much will my score drop if I close a credit card?
The drop typically ranges from 10 to 45 points, depending on the card's credit limit, your total available credit, and your current balances. Closing a high-limit card or closing a card when you already carry high balances on other cards causes a larger drop. A low-limit card closed when you have low balances elsewhere causes less damage.
Should I close a credit card before or after paying it off?
Pay it off first, then wait one or two billing cycles for the $0 balance to report to the credit bureaus, then close it. Closing a card with a balance still owed causes more damage to your score than closing one that's paid off. The issuer will also report the closure more favorably if the account shows a zero balance.
Will my score recover after I close a credit card?
Yes, most people recover most or all of the lost points within 6 to 12 months, assuming they don't make other changes to their credit profile. The score begins climbing again within a few months of closure. The closed account continues to appear on your report for up to 10 years, but its impact weakens significantly after the first year.
Is it better to close a card or keep it open with a zero balance?
Keeping it open with a zero balance is almost always better for your score. The open account preserves your available credit and keeps your utilization ratio lower. If you're concerned about fraud or overspending, you can cut up the card or lock it away without closing the account.
Can I reopen a credit card I already closed?
Many issuers will reopen a closed account if you call within 30 to 60 days of closure, though they may refuse if you closed it due to fraud or a dispute. Once reopened, your available credit returns and your utilization ratio improves. After that window closes, reopening becomes much harder or impossible.