Closing a credit card will lower your credit score, usually by 10 to 45 points, because it reduces the total credit available to you and may raise the percentage of credit you are using.
The damage depends on three things: how much credit you are currently using across all your cards, how old the card is, and whether you have other cards. If you carry a balance on other cards, closing one makes your overall credit utilization ratio worse — the math that determines how much of your available credit you are actually spending. If the card you are closing is your oldest account, you also lose the age advantage it gives your credit history. Both factors matter to credit scoring models.
The hit is temporary. Your score will begin to recover within a few months if you do not open new accounts or miss payments elsewhere. But the damage is real enough that you should understand what is happening before you close an account, and know which cards are safer to close than others.
Key Takeaways
- Closing a credit card reduces your available credit, which raises your credit utilization ratio and lowers your score by 10 to 45 points in most cases.
- The damage is worse if you carry a balance on other cards, because closing a card makes that balance represent a larger percentage of your remaining credit.
- Closing your oldest card does more harm than closing a newer one, because age of accounts is part of your credit score calculation.
- Your score will recover within a few months if you do not open new accounts or miss payments, but the temporary drop can affect your ability to borrow at good rates during that time.
- If you want to close a card without much damage, pay off all other balances first, and close the newest card rather than the oldest.
Why Credit Utilization Matters More Than You Think
Credit utilization is the percentage of your total available credit that you are currently using. If you have three cards with limits of $5,000 each — $15,000 total — and you carry a $3,000 balance across them, your utilization is 20 percent. Credit scoring models treat utilization as a sign of financial stress. The higher your utilization, the lower your score.
When you close a card, you lose the credit limit attached to it. If you close one of those $5,000 cards, your total available credit drops from $15,000 to $10,000. That same $3,000 balance now represents 30 percent of your available credit instead of 20 percent. Your score drops because the ratio got worse, even though you did not spend any more money.
This is why the damage is worst if you are already carrying balances. If you have paid off all your cards and close one, your utilization stays at zero percent, and the score hit comes only from losing the account itself — usually 5 to 15 points. If you are carrying balances, the utilization hit can add another 20 to 30 points of damage on top of that.
How Account Age Affects the Damage
Credit scoring models reward you for having a long history of accounts in good standing. The older your accounts, the better. This is called length of credit history, and it makes up about 15 percent of your credit score.
When you close your oldest card, you lose the age advantage. The scoring model will no longer count that account toward your average account age, which pulls the average down. A card that has been open for 15 years does more damage when closed than a card that has been open for 2 years.
The damage from closing an old account is usually 10 to 25 points, depending on how much older it is than your other accounts. If all your cards are roughly the same age, closing one does less harm. If you have one very old card and several newer ones, closing the old card is more costly to your score.
When Closing a Card Does the Least Damage
The safest card to close is a newer card with a low limit that you are not using. If you have a card that is less than 3 years old, has a $500 limit, and carries no balance, closing it will cost you roughly 5 to 10 points. The score will recover within two to three months.
Before you close any card, pay off the balance on it completely. Do not close a card while it still carries debt — that defeats the purpose and makes the utilization problem worse. Once the balance is zero, wait a month or two, then close the account.
If you have multiple cards you want to close, space them out. Close one card, wait three months for your score to recover, then close the next one. Closing multiple cards at once creates a bigger utilization hit and makes the recovery slower.
What Happens to Your Score Over Time
Your credit score will drop within one to two billing cycles after you close the card. The drop is when ready because the credit bureaus update your available credit as soon as the card issuer reports the closure.
Recovery is slower. Your score will begin to climb back within 30 to 60 days, but it may take three to six months to return to where it was before the closure. The timeline depends on how much damage was done and what else is happening on your credit report. If you open a new card or miss a payment during this recovery period, the score will drop again.
The closed account itself will stay on your credit report for seven to ten years, even after it is closed. During that time, it still counts toward your credit history length, though with less weight than an open account. This is why closing a card is not as damaging long-term as it appears short-term.
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 keeps the credit limit active, maintains the account age, and avoids the utilization hit entirely. The only downside is that the card issuer may close it for inactivity if you do not use it for a year or more.
To keep a card active without using it much, charge a small recurring bill to it — a streaming service, a gas station purchase once a month, or a utility bill — and pay it off in full each month. This keeps the account open and active without costing you anything.
If the card has an annual fee and you do not want to pay it, call the issuer and ask for the fee to be waived. Many issuers will remove the annual fee to keep you as a customer, especially if you have been with them for years. This is worth trying before you close the account.
The Right Time to Close a Card
Close a card when you are not planning to borrow money in the next six months. If you are thinking about explore for a mortgage, a car loan, or a new credit card, wait until after the loan closes or the new card arrives. The temporary score drop from closing a card can cost you a better interest rate on a large loan.
If you have just paid off a large balance and your score is high, that is a good time to close a card if you must. Your score has room to drop without falling below the thresholds that lenders use to decide whether to approve you.
Avoid closing a card right before you explore for credit. Even a 20-point drop can move you from one interest rate tier to another on a mortgage or auto loan, costing you hundreds of dollars over the life of the loan.
Frequently Asked Questions
Will closing a credit card hurt my credit score permanently?
No. The score drop is temporary and usually recovers within three to six months. The closed account stays on your report for seven to ten years and continues to count toward your credit history, so the long-term damage is minimal. The short-term hit is real, but it is not permanent.
Is it better to close a card or let it sit unused?
Letting it sit unused is better for your credit score. An open account with a zero balance does not hurt you and keeps your available credit high. The only risk is that the issuer may close it for inactivity after 12 months or more of no use. If you want to keep it open, use it occasionally and pay it off in full.
What if I close a card and my score drops right before I need to borrow money?
The damage is usually temporary enough that you can wait. If you closed a card and need to borrow within the next month, your score is still recovering. If possible, wait two to three months before explore for a loan. If you cannot wait, explore anyway — the drop may not be large enough to change the interest rate you receive, depending on the lender's thresholds.
Does closing a card affect my ability to get credit in the future?
Closing a card itself does not prevent you from getting credit, but the temporary score drop might affect the interest rate you receive on a new loan. Lenders use your score to decide whether to approve you and what rate to offer. A 20-point drop could move you to a higher rate tier, costing you more money over time on a mortgage or car loan.
Can I reopen a card after I close it?
It depends on the issuer. Some will reopen a recently closed account if you ask within a few months. Others will treat a reopened account as a new account, which resets the age and can hurt your score again. Call the issuer before you close the card and ask whether reopening is possible if you change your mind.