Cancelling 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 actively using.
The damage is temporary. Your score will recover over time as you continue to pay bills on time and keep other accounts open. But the drop happens when ready when you close the account, and the effect is larger if you have few other cards or if the card you are closing has a high credit limit.
The two main reasons your score drops are connected to how credit bureaus measure risk. First, closing an account shrinks your total available credit — if you had $10,000 in credit limits across four cards and you close one with a $3,000 limit, you now have $7,000 available. Second, if you carry a balance on your other cards, that balance now represents a larger percentage of your remaining credit, which signals higher risk to lenders.
Key Takeaways
- Your score drops because closing an account reduces your total available credit and may increase the percentage of credit you are using.
- The damage is usually 10 to 50 points and is larger if the card has a high limit or if you have few other cards open.
- Paying down balances on your remaining cards before you close an account can reduce the impact on your score.
- Your score will recover within a few months to a year if you continue to pay on time and do not open new accounts.
- Closing a card does not erase its payment history — that account will stay on your credit report for seven years and continue to help your score.
Why closing a card hurts your score more than you might expect
Credit scores are built on five main factors: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%). Closing a card directly damages two of these.
The first is amounts owed, which credit bureaus measure as your utilization ratio — the percentage of your total available credit that you are currently using. If you have $5,000 in balances and $20,000 in total credit limits, your utilization is 25%, which is healthy. If you close a card with a $5,000 limit and keep the same $5,000 balance, your utilization jumps to 33% on the remaining $15,000 in credit. That higher percentage signals risk, even though your actual debt has not changed.
The second factor is credit mix — the variety of credit types you hold. Having both revolving credit (credit cards) and installment credit (car loans, mortgages) is better for your score than having only one type. If you close your only credit card, you lose points for diversity, though this effect is smaller than the utilization hit.
How much your score will drop depends on your current situation
The size of the damage varies widely. Someone with a score of 750 and five open cards might lose 15 points. Someone with a score of 650 and two open cards might lose 40 points. The difference comes down to how much room the score has to fall and how dependent it is on that one card.
Your score will drop more if:
- The card you are closing has a high credit limit.
- You have few other cards open.
- You carry balances on your remaining cards.
- Your current score is already below 700.
Your score will drop less if:
- You have multiple other cards with available credit.
- You pay off all balances before closing the account.
- Your current score is above 750.
- The card you are closing has a low limit.
Steps to minimize the damage before you close the account
If you have decided to close a card, you can reduce the impact on your score by taking action first. The most effective step is to pay down balances on your remaining cards before you close the one you are cancelling.
Start by paying the balance on the card you plan to close to zero, if possible. Then, before you call to cancel, pay down balances on your other cards so your total utilization across all accounts is below 30%. For example, if you have $2,000 in balances spread across three remaining cards and a total limit of $15,000, your utilization will be 13% — well below the threshold that damages your score.
Next, wait a month or two after paying down those balances. Your credit report updates monthly, and you want the lower utilization to be reflected before you close the account. Then call the card issuer and ask to close the account. Request written confirmation that the account is closed at your request, not due to inactivity or non-payment — this distinction matters for your credit report.
What happens to your credit history after you close the account
Closing the account does not erase it. The card will remain on your credit report for seven years, and during that time it will continue to help your score because it shows a history of on-time payments. The account will be marked as "closed by consumer" rather than active, but the payment history stays intact.
This is why closing a card is less damaging than it appears at first. You lose the available credit when ready, but you keep the benefit of the account's history. After six months to a year of on-time payments on your remaining cards, your score will usually recover to where it was before you closed the account.
When closing a card makes sense despite the score impact
A 10 to 50 point drop is temporary, and there are situations where closing a card is worth it. If you are paying an annual fee and you do not use the card, closing it saves money. If you are carrying a balance and the card has a high interest rate, closing it removes the temptation to use it again. If you have too many cards and managing them is causing you to miss payments, closing some accounts protects your score more than the closure itself damages it.
The key is to weigh the temporary score drop against the long-term benefit. A missed payment costs 100+ points and stays on your report for seven years. An annual fee of $95 costs you money every year. A temporary 30-point drop from closing a card is the smaller harm in both cases.
Alternatives to closing a card if you want to keep your score stable
If you want to stop using a card without closing it, you can straightforward cut it up or set it aside. The account will stay open and continue to help your score as long as the issuer does not close it for inactivity. Some issuers close accounts after 12 to 24 months of no use, so check your card's terms or call to ask their policy.
Another option is to keep the card active by making a small purchase every few months — a coffee, a gas fill-up, something you would buy anyway — and then paying it off when ready. This keeps the account open and active without carrying a balance or paying interest. The card issuer sees regular use and is unlikely to close the account.
If you have multiple cards and want to reduce the number you carry, close the newest card rather than the oldest. The oldest card has a longer payment history, which helps your score more. Close the card with the lowest limit rather than the highest, so you lose less available credit. And close cards with no annual fee before closing cards you pay to keep open.
Frequently Asked Questions
How long does it take for my score to recover after I close a card?
Most people see their score recover within three to six months if they continue to pay on time and keep their utilization low on remaining cards. Full recovery to the pre-closure score usually takes six months to a year. The timeline depends on how much damage the closure caused and how quickly you rebuild the available credit through new accounts or increased limits.
Will closing a card hurt my score if I pay off the balance first?
Yes, but less. Paying off the balance before you close the account removes the utilization hit on that specific card, but you still lose the available credit and the account's contribution to your credit mix. The damage will be smaller — perhaps 10 to 20 points instead of 30 to 50 — but it will still happen.
Does it matter which card I close if I have multiple cards?
Yes. Close the newest card rather than the oldest, because older accounts help your score more. Close the card with the lowest limit rather than the highest, because you lose less available credit. Close cards with annual fees before closing cards you do not pay for. Avoid closing your oldest card or your card with the highest limit.
Can I reopen a card after I close it?
You can ask the issuer to reopen the account within a short window — usually 30 to 60 days — and they may agree. After that window, the account is closed permanently and you would have to explore for a new card from that issuer. A new process triggers a hard inquiry and counts as new credit, which also affects your score.
Should I close a card before explore for a mortgage or car loan?
No. Close cards after you have finished explore for major loans. Lenders pull your credit report when you explore, and closing a card right before that process will lower your score at the moment they are reviewing it. Wait until after the loan is approved and funded to close any accounts.