Closing a credit card will lower your 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 using.
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 to your name. Second, if you carry a balance on other cards, that balance now represents a larger percentage of your remaining credit. Credit scoring models penalize you when you use more than 30 percent of your available credit, so closing a card can push you over that threshold even if you did not charge anything new.
The damage is temporary. Your score will begin to recover within a few months as you keep making on-time payments and the closed account ages. However, the account itself stays on your credit report for up to 10 years, so the impact lingers longer than you might expect.
Key Takeaways
- Closing a card reduces your available credit and may increase your credit utilization percentage, both of which lower your score when ready.
- The impact is usually 10 to 50 points, depending on how much credit you have and how much you are currently using.
- Your score will recover within a few months if you keep making on-time payments and do not open new accounts.
- If you want to close a card without harming your score, pay down other balances first so your utilization stays below 30 percent.
Why Available Credit Matters to Your Score
Credit scoring models care about the ratio between the credit you use and the credit available to you. This ratio is called credit utilization. If you have $10,000 in available credit across all your cards and you owe $3,000, your utilization is 30 percent. That is the threshold where scoring models start to penalize you.
When you close a card, you lose that card's credit limit. If the card you are closing has a high limit but a zero balance, closing it hurts you more than closing a card with a low limit. For example, closing a $10,000-limit card with no balance on it is worse for your score than closing a $1,000-limit card with no balance, because you are losing more available credit.
This is why people with multiple cards often have better scores than people with one card, even if both groups owe the same amount of money. More cards mean more available credit, which means a lower utilization percentage.
How Much Your Score Will Drop
The size of the drop depends on your current credit profile. Someone with a score of 750 and low utilization might lose only 10 to 15 points. Someone with a score of 650 and high utilization might lose 40 to 50 points, because closing the card pushes them further over the 30 percent threshold.
The drop is steepest in the first month after you close the card. After that, the damage slows. Within three to six months of on-time payments and stable balances, most people see their score climb back toward where it was before the closure.
The closed account itself remains on your credit report for up to 10 years. It will not actively hurt your score after a few months, but it will show as a closed account, which some lenders view as a minor negative signal.
When Closing a Card Does Less Damage
If you close a card that carries a balance, the damage is worse than closing a card with a zero balance. Before you close any card, pay down the balance on your other cards so your overall utilization drops below 30 percent. Then close the card. This way, even though you are losing available credit, your utilization percentage stays low.
Closing a card that has a low credit limit also does less damage than closing one with a high limit. If you have five cards with limits of $1,000, $2,000, $3,000, $5,000, and $10,000, closing the $1,000 card hurts less than closing the $10,000 card.
Timing also matters. If you are planning to explore for a mortgage, car loan, or other major credit in the next few months, do not close a card right now. The temporary score drop could affect the interest rate you receive. Wait until after you have secured the loan.
What Happens to the Closed Account on Your Report
When you close a card, the account does not disappear from your credit report when ready. It stays there for up to 10 years, marked as "closed by consumer" or "closed by creditor." During that time, it continues to show your payment history with that card, which is a positive signal if you always paid on time.
After about seven years, the closed account's impact on your score becomes negligible. The account is still visible to lenders, but it is old enough that it does not move your score much. After 10 years, it falls off your report entirely.
If you closed a card with a history of missed payments, the account will still hurt your score while it is on your report, but the damage weakens over time. This is one reason to avoid closing cards with good payment histories — you lose the benefit of that positive history without gaining much.
Alternatives to Closing a Card
If you want to stop using a card without closing it, you can straightforward leave it open with a zero balance. This preserves your available credit and keeps your utilization low. Many people do this with older cards or cards they no longer need, because the benefit to their score outweighs the small risk of fraud or identity theft.
If you are closing a card because of an annual fee, call the card issuer and ask if they will waive the fee or convert the card to a no-fee version. Many issuers will do this to keep your account open, especially if you have been a customer for years and have a good payment history.
If you are closing a card because you are trying to reduce debt, focus on paying down balances instead. Closing cards does not reduce the amount you owe — it only changes how your debt looks to credit scoring models. Paying down balances improves your score much more than closing cards does.
How to Minimize Damage If You Must Close a Card
If you have decided to close a card, follow this order: First, pay down balances on your remaining cards so your utilization is well below 30 percent. Second, wait at least a month to let your credit report update. Third, close the card. Fourth, do not open any new cards for at least three to six months. Opening new cards triggers a hard inquiry and lowers your score further.
After you close the card, keep making on-time payments on everything else. This is the fastest way to recover the points you lost. Do not miss a payment or max out another card, because that will extend the damage.
If you are closing multiple cards, do not close them all at once. Space them out by several months so the impact is spread over time and your score has a chance to recover between closures.
Frequently Asked Questions
How long does it take for my score to recover after closing a card?
Most people see their score start climbing back within three to six months of closing a card, assuming they keep making on-time payments and do not open new accounts. The full recovery can take longer if you have other negative marks on your report or if your utilization was already high.
Will closing a card hurt my score if I have no balance on it?
Yes, closing a card with a zero balance still lowers your score because you are losing available credit. However, the damage is usually smaller than closing a card with a balance, because you are not raising your utilization percentage as much.
Should I close old cards or new cards?
Close newer cards if you must close one. Older cards show a longer payment history, which helps your score. Closing an older card removes that positive history from your report. If you have a choice between closing a card you opened last year and one you opened 10 years ago, close the newer one.
Can I reopen a card after I close it?
It depends on the card issuer. Some will reopen a closed account if you ask within a certain time frame, usually 30 to 60 days. Others will not. If you think you might want the card back, call the issuer before closing it and ask about their reopening policy.
Does closing a card affect my ability to get new credit?
Closing a card can make it slightly harder to get approved for new credit in the short term, because your score drops and your available credit shrinks. However, the effect is usually small. Lenders care more about your payment history and income than about whether you have closed a card recently.