Closing a credit card usually lowers your credit score, sometimes by 10 to 50 points, because it shrinks the total credit available to you and can raise the percentage of credit you're using on your remaining cards.
The damage is not permanent—your score will recover over time—but the timing matters. If you're planning to explore for a mortgage, car loan, or another form of credit within the next few months, closing a card now will make that process harder. If you have no when ready borrowing plans, closing a card is a less urgent decision.
The two main reasons your score drops are both about the numbers lenders see. First, your available credit shrinks. If you had three cards with $5,000 limits each and closed one, you went from $15,000 available to $10,000 available. Second, your credit utilization ratio—the percentage of your available credit you're actually using—goes up. If you were using $3,000 across all three cards, you were at 20 percent utilization. After closing one card, that same $3,000 is now 30 percent of your $10,000 available credit, and a higher utilization ratio hurts your score.
Key Takeaways
- Closing a credit card reduces your available credit and raises your utilization ratio, both of which lower your credit score temporarily.
- The score drop is usually between 10 and 50 points, depending on how much credit you're using and how old the card is.
- Older cards hurt your score more when closed because they contribute to your average account age, which lenders view as a sign of credit stability.
- If you want to close a card without harming your score as much, pay down balances on other cards first so your utilization stays low.
- Your score will recover within a few months to a year if you keep making on-time payments and don't open new cards or miss payments.
Why your credit utilization ratio matters so much
Credit utilization—the percentage of your available credit you're using—makes up about 30 percent of your credit score. Lenders see high utilization as a sign that you're stretched thin financially, even if you pay on time. When you close a card, you're removing available credit from the denominator, which pushes your utilization percentage up when ready.
The effect is smaller if you're already using very little of your available credit. If you have $50,000 in available credit and use only $2,000, closing a card that you weren't using won't move the needle much. But if you have $10,000 available and use $4,000, closing a $5,000 card will jump your utilization from 40 percent to 67 percent, and that will hurt.
You can soften this blow before closing the card. Pay down balances on your remaining cards first, so that when the card closes, your total utilization is lower. For example, if you're using $3,000 across three cards with $5,000 limits each, pay that $3,000 down to $1,500 before you close one card. Then when you close it, your utilization drops from 20 percent to 15 percent instead of rising to 30 percent.
How the age of the card affects the damage
Closing an old card hurts your score more than closing a new one. The reason is average account age, which makes up about 15 percent of your credit score. Lenders like to see a long history of accounts in good standing because it shows you can manage credit responsibly over time.
When you close a card, it stops contributing to your average account age when ready. If you've had the card for 15 years and your other accounts are newer, closing it will noticeably lower your average age. If you've had it for 18 months and your other accounts are older, the impact is smaller.
This is one reason financial advisors often suggest keeping old cards open even if you don't use them. As long as the card has no annual fee and you're not tempted to overspend, leaving it open costs you nothing and protects your score. If the card does have an annual fee, you can call the issuer and ask them to downgrade it to a no-fee version instead of closing it.
What happens to your payment history after you close
Closing a card does not erase your payment history on that card. The account will stay on your credit report for seven to ten years, and all the on-time payments you made will remain visible to lenders. This is actually good news: the positive history helps your score even after the account is closed.
However, once the account is closed, you can no longer make payments on it, so it stops contributing to your current payment activity. If you had a pattern of paying that card on time every month, you lose that monthly boost to your score. This is another reason why keeping cards open—especially if you have a history of on-time payments—can help your score more than closing them.
When closing a card makes sense anyway
Despite the score hit, there are situations where closing a card is the right move. If the card has a high annual fee and you're not using it, the fee costs you money every year and the card isn't earning its keep. If you're carrying a balance on the card and paying interest, closing it after you've paid it off can prevent you from running up the balance again.
If you're worried about identity theft or fraud, closing unused cards reduces the number of accounts a thief could potentially open in your name. And if you have so many cards that you can't keep track of them or you're tempted to overspend, closing some is a reasonable step toward managing your finances better.
The key is timing. If you're planning to borrow money in the next three to six months—for a car, a home, or anything else—wait until after you've completed that loan before closing cards. If you have no when ready borrowing plans, the score hit will fade within a few months to a year as long as you keep paying your other bills on time.
Steps to take before you close a card
If you've decided to close a card, take these steps in order to minimize the damage and avoid problems.
- Pay off any balance on the card you're closing. You can close a card with a balance, but the issuer may freeze the account and you'll still owe the debt. Paying it off first is cleaner.
- Check your other cards to see if any automatic payments are linked to the card you're closing. Move those payments to a different card or bank account so they don't fail.
- Pay down balances on your remaining cards if possible, so your overall utilization stays low after you close this one.
- Call the card issuer and ask them to close the account. Do not just stop using the card—inactivity doesn't close it, and the account will stay open and count against your available credit.
- Ask the issuer to confirm in writing that the account is closed at your request. Keep this confirmation in case there's a dispute later.
- Check your credit report a few weeks later to confirm the account shows as closed. You can view your report for free once a year at annualcreditreport.com.
How long the score drop lasts
The when ready hit to your score—the 10 to 50 point drop—usually happens within a month of closing the card. After that, your score will begin to recover as long as you keep making on-time payments on your other accounts and don't open new cards or miss payments.
Most people see their score return to its previous level within three to six months. If the card you closed was very old or you were using a high percentage of your available credit, recovery may take closer to a year. The older your other accounts and the lower your utilization on them, the faster you'll bounce back.
One thing that can slow recovery is opening a new card to replace the available credit you lost. New accounts lower your average account age and trigger a hard inquiry, both of which hurt your score. If you need more available credit, it's usually better to ask your existing card issuers to raise your limits instead.
Frequently Asked Questions
Will closing a credit card hurt my score if I have no balance on it?
Yes, even a card with zero balance will lower your score because it reduces your available credit and raises your utilization ratio on your remaining cards. The damage is usually smaller than closing a card you were using, but it still happens.
Should I close old cards or new cards?
Close newer cards if you must close one. Older cards help your average account age, which is important to your score. If you have a choice between closing a card you've had for two years and one you've had for ten years, close the newer one.
What if I close a card and then want to reopen it?
You can usually reopen a closed account by calling the issuer, but they may treat it as a new account, which would trigger a hard inquiry and lower your average account age. It's better to avoid closing the card in the first place if you think you might want it later.
Does closing a card affect my ability to get a new card?
Closing a card lowers your score, which can make it harder to get approved for a new card in the short term. However, if you're trying to reduce the number of open accounts, closing one and then explore for a new one may not help your score because the new account will have a hard inquiry and lower your average age.
Can I close a card without calling the issuer?
Some issuers allow you to close an account online through your account portal, but calling is safer because you get confirmation and can ask them to send written proof. If you close online, follow up by checking your credit report to confirm the account shows as closed.