Closing a credit card will usually lower your credit score, at least temporarily
When you close a credit card account, your credit score typically drops because two major scoring factors change when ready: your credit utilization ratio (the percentage of available credit you are using) and your average age of accounts (how long your credit history is). The damage is usually temporary—your score often recovers within a few months—but the timing and size of the drop depend on which card you close and how much credit you have elsewhere.
The most painful closures are older cards with high limits. Closing a card you have held for ten years costs you more points than closing one you opened last year. Closing your only card with a high limit hurts more than closing one when you have other cards with room to spare. If you carry a balance on other cards, closing this one makes your utilization ratio worse because your total available credit shrinks while your total debt stays the same.
Key Takeaways
- Closing a credit card reduces your available credit, which raises your credit utilization ratio and typically lowers your score by 10 to 50 points.
- Older cards with high limits cause larger score drops when closed because they represent a longer credit history and more available credit.
- If you carry balances on other cards, closing a card makes your utilization ratio worse and the score drop more severe.
- Your score usually recovers within three to six months as long as you keep other accounts open and pay on time.
- Paying off a card before closing it does not prevent the score drop, but it does prevent future interest charges.
Why closing a card changes your credit utilization ratio
Your credit utilization ratio is the total amount you owe across all cards divided by the total credit limit across all cards. Credit scoring models treat this as a sign of financial stress—the higher your utilization, the riskier you look. When you close a card, your total available credit shrinks, so your ratio goes up even if you owe nothing.
Example: You have three cards with $5,000 limits each ($15,000 total available). You owe $3,000 across all three cards. Your utilization is 20 percent ($3,000 ÷ $15,000). If you close one card with a $5,000 limit and owe nothing on it, your available credit drops to $10,000. Your utilization jumps to 30 percent ($3,000 ÷ $10,000), even though you owe the same amount. That change alone typically costs 10 to 30 points.
The damage is worse if you owe money on the card you are closing. If you close a card with a $5,000 limit that carries a $2,000 balance, your available credit drops to $10,000 and your debt stays at $3,000, pushing your utilization to 30 percent. Paying off the balance before closing prevents future interest but does not prevent the utilization hit.
How the age of your accounts affects the score drop
Credit scoring models reward a long credit history. The older your accounts are, the more they help your score. When you close an old account, you lose that benefit. The account may still appear on your credit report for seven to ten years after closing, but it stops actively helping your score the moment you close it.
Closing a card you have held for fifteen years costs more points than closing one you opened six months ago. If the old card is also your oldest account, the drop is even larger because your average account age drops. Closing your only card with a high limit also hurts more because that limit was doing heavy lifting in your utilization calculation.
If you have many accounts and the card you are closing is not your oldest, the damage is smaller. If you have only two or three cards total, closing one is more painful because each account matters more to your overall profile.
When the score drop is temporary versus long-term
Most score drops from closing a card are temporary. Within three to six months, your score usually recovers if you keep other accounts open, make on-time payments, and do not take on new debt. The closed account stops helping you, but it stops hurting you too—it just becomes neutral.
The recovery is slower if you close multiple cards in a short time or if you close a card right before explore for a mortgage or auto loan. Lenders pull your credit score at the moment you explore, so timing matters. If you are planning to borrow money in the next six months, closing a card now will work against you.
The drop becomes long-term only if you close the card and then damage your credit in other ways—missing payments, running up balances on remaining cards, or opening many new accounts at once. If you close a card and then maintain good habits on your other accounts, the score recovers on its own.
Reasons to close a card despite the score hit
A temporary score drop is worth accepting if the card is costing you money or creating a risk you do not want. Annual fees are the clearest reason: if a card charges $95 a year and you do not use it, closing it saves you money. The score drop is usually smaller than the fee you would pay over time.
Closing a card also removes the temptation to overspend. If you have paid off a card and are worried you will run it back up, closing it is a legitimate financial decision. The score hit is temporary; the damage from running up a new balance is not.
If you have many cards and are struggling to manage them, closing a few does not hurt much. Closing one card when you have ten others open costs fewer points than closing one when you have three. The key is keeping your oldest cards and highest-limit cards open if you can.
What to do before closing a card
Before you close a card, check your credit report to see what you owe and what your limits are across all accounts. You can get a free report from AnnualCreditReport.com once per year. Knowing your current utilization ratio helps you predict how much your score will drop.
Pay off any balance on the card you plan to close. This prevents interest charges and makes the closure cleaner from a credit perspective. Paying off the balance does not prevent the utilization ratio hit, but it does prevent the card from reporting a balance after you close it.
Consider keeping the card open but unused instead of closing it. Many people close cards they no longer need, but keeping them open with zero balance helps your utilization ratio and preserves your account age. If the card has no annual fee, there is no cost to leaving it open. If it has an annual fee, call the issuer and ask if they can waive it or convert it to a no-fee version.
If you do decide to close the card, do it by phone or in writing so you have a record. Ask the issuer to note in your file that you closed the account at your request, not because of missed payments or other problems. This detail does not affect your score, but it can matter if you are explore for credit soon.
How to minimize the score damage if you must close a card
Close the card with the smallest impact first. If you have multiple cards you want to close, start with the newest one with the lowest limit. Closing a card you opened last year with a $2,000 limit costs fewer points than closing one you opened ten years ago with a $10,000 limit.
Space out closures if you are closing more than one card. Closing three cards in one month looks worse to credit scoring models than closing one card per month over three months. The damage is the same eventually, but spreading it out gives your score time to recover between hits.
Keep your utilization low on remaining cards while you recover. If you close a card and your utilization jumps to 40 percent, pay down balances on other cards to bring it back below 30 percent. This helps your score recover faster because you are offsetting the utilization hit from the closure.
Do not open new cards to replace the available credit you lost. Opening a new card triggers a hard inquiry and lowers your score further. Wait until your score has recovered from the closure before explore for new credit.
Frequently Asked Questions
How many points will my score drop if I close a credit card?
The drop usually ranges from 10 to 50 points, depending on the card's age, limit, and how much credit you have elsewhere. Closing an old card with a high limit costs more points than closing a new card with a low limit. If you carry balances on other cards, the drop is larger because your utilization ratio gets worse.
Should I pay off the card before closing it?
Yes, pay off any balance before closing. This prevents interest charges and keeps the card from reporting a balance after closure. Paying off the balance does not prevent the score drop from losing available credit, but it does prevent additional damage from a reported balance.
Can I reopen a card after I close it?
Some issuers will reopen a closed account within a short window, usually 30 to 60 days, if you call and ask. After that, you would have to explore as a new customer, which triggers a hard inquiry. If you are unsure about closing, ask the issuer what their reopen policy is before you close.
Will closing a card hurt my chances of getting approved for a mortgage?
If you close a card within six months of explore for a mortgage, it will lower your score at the moment the lender pulls your credit. Mortgage lenders look at your score and your debt-to-income ratio, so a lower score can affect your approval odds or interest rate. If you are planning to borrow soon, wait until after closing to close cards.
Is it better to close a card or leave it open with zero balance?
Leaving it open with zero balance is almost always better for your credit score. You keep the available credit, which helps your utilization ratio, and you keep the account age, which helps your score. If the card has no annual fee, there is no reason to close it. If it has an annual fee, call and ask if the issuer can waive it or move you to a no-fee product.