Closing a credit card affects your credit score, but the damage is temporary if you plan the timing right
Cancelling a credit card lowers your credit score because it reduces the total credit available to you — a factor called your credit utilization ratio. If you have $5,000 in debt across two cards with $10,000 total limits, you are using 50% of your available credit. Close one card with a $5,000 limit, and suddenly you are using 100% of the remaining $5,000 limit, which looks riskier to lenders. The score drop is usually 5 to 25 points, depending on how much credit you are already using and how old the account is.
The impact fades over time. After six months to a year of on-time payments on your remaining accounts, the score recovers. The closed account stays on your credit report for up to 10 years, but its weight decreases each year. Cancelling a card is not a financial disaster — it is a temporary penalty you can minimize by choosing when to do it.
Key Takeaways
- Pay off the full balance before you cancel, because interest charges will continue to accrue on a closed account until the balance is zero.
- Cancel cards with high annual fees first, then cards you opened recently, to minimize the score impact.
- Keep cards with long account history open even if you do not use them, because older accounts protect your credit score.
- Call the card issuer directly to cancel — do not rely on stopping payments or letting the account go inactive.
- Ask for the cancellation to be confirmed in writing, and check your credit report 30 days later to verify the account shows as closed by you.
Pay off the balance completely before you call
A closed account still accrues interest on any remaining balance. If you have a $2,000 balance on a card charging 18% annual interest, closing the account does not stop the interest clock. You will owe roughly $30 per month in interest charges until the balance is paid off, and you will have no way to make new purchases to pay it down faster.
Pay the full balance to zero before you initiate the cancellation. If you cannot pay it all at once, transfer the balance to a card you are keeping open, or use a balance transfer offer if one is available. Once the balance is zero, you are ready to call.
Decide which card to cancel first
Not all closed accounts damage your score equally. A card you opened last year hurts less than a card you opened 15 years ago. A card with a $500 limit hurts less than one with a $25,000 limit. A card with a $3,000 annual fee hurts less to close than a card with no fee.
Start by cancelling cards with annual fees you are paying but not using. These cards are costing you money every year and provide no benefit. Next, cancel newer cards — those opened in the last two or three years. Save the oldest cards for last, even if you never use them. The age of your oldest account is part of your credit score, and closing a 20-year-old card does more damage than closing a 2-year-old one.
If you have multiple cards with high utilization (you are using a large percentage of the available credit), do not cancel any card until you have paid down the balances on the ones you are keeping. Closing a card while your remaining cards are maxed out will tank your score.
Call the issuer and request cancellation in writing
Do not stop using the card or let it go inactive and hope it closes on its own. Inactive accounts sometimes close automatically, but not always, and you have no control over when. Call the customer service number on the back of the card and tell them you want to cancel the account.
The issuer may offer you a lower interest rate, a waived annual fee, or other incentives to keep the account open. Decide in advance whether you want to keep it. If you do want to cancel, be direct: "I want to close this account." Ask them to confirm the cancellation in writing and request they mail or email you a letter stating the account is closed at your request and the balance is zero.
Write down the date you called, the name of the representative, and any confirmation number they provide. This creates a record in case there is a dispute later.
Verify the closure on your credit report
The account should appear on your credit report within 30 days, marked as "closed by consumer" or "closed at consumer's request." Check your credit report at annualcreditreport.com, which is the only site authorized by the federal government to provide free reports. You are may have access to to one free report per year from each of the three major bureaus: Equifax, Experian, and TransUnion.
If the account shows as "closed by creditor" instead of "closed by consumer," contact the issuer and ask them to correct it. The distinction matters because "closed by creditor" can suggest you were in default, even if you were not. If the account still shows an outstanding balance after you paid it off, dispute it with the bureau when ready.
Timing: when to cancel relative to major financial moves
Avoid cancelling a card in the months before you explore for a mortgage, auto loan, or other large loan. Lenders pull your credit score at the time of process, and a recent cancellation will lower that score. If you are planning to borrow money in the next six months, wait until after the loan closes to cancel.
Similarly, do not cancel multiple cards in quick succession. Each cancellation lowers your score, and multiple closures in a short period look worse to lenders than one closure spread out over time. Space cancellations at least three to six months apart if you are planning to close more than one account.
What happens to rewards points and cash back
Rewards points and cash back balances are usually forfeited when you close the account, though some issuers allow you to redeem them first. Before you cancel, log into your account and check your rewards balance. If you have points or cash back accumulated, redeem them before you call to cancel. Some cards let you transfer points to a travel partner or convert them to a statement credit.
If the issuer does not allow redemption after cancellation, redeem everything before you initiate the closure. Once the account is closed, you typically cannot access the rewards program.
Frequently Asked Questions
Will cancelling a credit card hurt my credit score?
Yes, but temporarily. Your score drops because closing the account reduces your available credit, which increases your utilization ratio. The drop is usually 5 to 25 points and recovers within six months to a year if you pay your other accounts on time. Older accounts and accounts with higher limits cause larger drops.
What if I have a balance I cannot pay off before cancelling?
Do not cancel the account. Transfer the balance to another card, set up a payment plan, or pay it down as much as possible first. Closing an account with an outstanding balance means interest continues to accrue with no way to make new purchases to offset it, and you lose access to the card's customer service if you have questions about the balance.
Can I cancel a card over email or through the website?
Most issuers require you to call to cancel, though some allow it through their online portal or app. Calling is safer because you get a confirmation number and can ask for written confirmation. If you cancel online, take a screenshot of the confirmation and follow up with a call to verify the account is actually closed.
Should I keep old cards open even if I do not use them?
Yes, if they have no annual fee. Older accounts help your credit score because they increase the average age of your accounts and add to your available credit. A card you opened 10 years ago and never use is worth more to your score open than closed, as long as it costs you nothing.
How long does it take for a closed account to stop showing on my credit report?
Closed accounts stay on your credit report for up to 10 years. They continue to affect your score for the first few years after closure, with decreasing weight over time. After about seven years, the impact is minimal, though the account still appears on the report.