Cancelling a credit card will lower your score, usually by 10 to 50 points, because it reduces the total credit available to you and changes how much of your limit you are using.
The damage is temporary. Your score will recover over time as you keep paying bills on time and your credit history ages. But the hit happens when ready when you close the account, and the size of the drop depends on how much credit you are losing and how much debt you carry on other cards.
If you have decided to close a card, understanding what happens to your score and when helps you time the cancellation to do the least harm — and know what to expect when you check your credit report afterward.
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.
- The damage is larger if you carry balances on other cards, because closing a card makes those balances represent a higher percentage of your total available credit.
- Your score will recover within a few months to a year if you keep paying on time and do not open new accounts or miss payments.
- Paying off the card before you close it does not prevent the score drop, because the damage comes from losing available credit, not from the balance itself.
- Cancelling a card you have held for a long time costs you more than cancelling a newer card, because you lose the age of that account from your credit history.
Why closing a card lowers your score
Credit scores are built on five main factors. Two of them are directly affected when you close a card: your credit utilization ratio and the age of your accounts.
Credit utilization is the percentage of your total available credit that you are currently using. If you have three cards with $5,000 limits each, your total available credit is $15,000. If you carry $3,000 in balances across those cards, your utilization is 20 percent. When you close one of those $5,000 cards, your available credit drops to $10,000 — and that same $3,000 in balances now represents 30 percent utilization. Most scoring models treat utilization above 30 percent as a risk signal, so your score drops.
The second factor is account age. Closing a card removes that account from your active credit history. If the card you are closing is your oldest account, the average age of your accounts drops, and your score falls. If it is your newest card, the impact is smaller.
How much your score will drop
The size of the drop depends on three things: how much credit you are losing, how much debt you carry on other cards, and how old the account is.
If you carry no balances on any other cards, closing a card will hurt your score less — usually 5 to 15 points — because your utilization ratio stays low no matter what your available credit is. If you carry balances on other cards, the drop is larger, typically 10 to 50 points, because closing the card raises your overall utilization.
Closing your oldest card costs you more than closing a newer one. If the card you are closing is five years old and your other cards are one year old, your average account age drops significantly. If you are closing a card you opened last year, the impact on account age is small.
There is no way to know your exact score drop before you close the card. Different credit bureaus use different scoring models, and the models weight these factors differently. But you can expect the damage to be temporary: most people see their score recover within three to six months if they keep paying on time.
What happens if you pay off the balance first
Paying off the card before you close it does not prevent the score drop. The damage comes from losing available credit, not from carrying a balance. Even if you pay the card down to zero, closing it still reduces your total available credit and still lowers your score.
That said, paying off the balance before you close the account is still the right move — just for a different reason. It means you are not carrying debt on a card you no longer plan to use, and it simplifies your finances. But do not expect it to protect your score.
When to close a card if you have decided to
If you have already decided to close a card, timing matters slightly. Close it when you are not about to explore for a loan or a new credit card, because your score will be lower for a few months, and lenders see a lower score.
If you are planning to buy a house or a car in the next six months, close the card now rather than waiting until closer to the process date. Your score will have time to recover before the lender pulls it. If you are not planning any major borrowing, the timing is less critical — the damage is temporary either way.
Do not close multiple cards at once. If you need to close more than one, space them out by a few months so your score has time to recover between closures.
How to close a credit card
Call the customer service number on the back of your card. Tell them you want to close the account. They may ask why, and they may offer you a lower interest rate or a rewards bonus to keep the card open — this is normal. You can accept or decline.
After you confirm the closure, ask for a confirmation number and write down the date. Then check your credit report a few weeks later to make sure the card shows as closed on your end. You can view your credit report free once a year at annualcreditreport.com, which is the official site run by the three major credit bureaus.
Do not close the card by straightforward stopping to use it. An inactive card may eventually close on its own, but the timing is unpredictable, and the issuer may close it with a negative mark if they think you abandoned it. Closing it yourself gives you control over when it happens.
Alternatives to closing a card
If you are closing a card mainly because you do not use it, consider keeping it open instead. An open card with a zero balance does not hurt your score — it actually helps it by keeping your available credit high and your utilization low. The only cost is the annual fee, if the card charges one.
If the card has an annual fee and you do not want to pay it, call and ask if the issuer will downgrade you to a no-fee version of the same card. Many issuers offer this option and will move your account to a different product without closing it. You keep the account age and the available credit, and you avoid the annual fee.
If the card has no annual fee, there is almost no reason to close it. Leave it open, use it occasionally to keep it active, and let it help your credit score.
Frequently Asked Questions
Will my score recover after I close a card?
Yes. Most people see their score recover within three to six months if they keep paying all their bills on time and do not open new accounts or miss payments. The recovery is faster if you carry no balances on other cards, because your utilization ratio will be low.
Does it matter which card I close?
Yes. Closing your oldest card costs you more than closing a newer one, because you lose the age of that account. If you have a choice, close a card you opened recently. If the card you want to close is your oldest, the score drop will be larger.
Can I reopen a card after I close it?
It depends on the issuer. Some will reopen a closed account if you call within a certain window, usually 30 to 60 days. Others will not. If you think you might want the card back, ask before you close it whether reopening is possible.
What if I close a card and my score drops right before I explore for a mortgage?
A lower score can mean a higher interest rate or a smaller loan amount. If you are planning to explore for a mortgage soon, close the card now and wait at least three to six months before explore, so your score has time to recover.
Does closing a card hurt my score more than missing a payment?
Yes. A missed payment can lower your score by 100 points or more and stays on your report for seven years. Closing a card lowers your score by 10 to 50 points and the damage fades within months. If you are choosing between the two, missing a payment is far worse.