The safest option is to keep the card open and inactive
Closing a credit card often hurts your credit score more than keeping it open does. When you close an account, you lose the available credit it represents, which raises your credit utilization ratio — the percentage of your total credit limit you are actually using. A higher utilization ratio signals risk to lenders, even if you pay everything else on time.
An old card sitting in a drawer costs you nothing if there is no annual fee. The card issuer benefits from you keeping the account open (you might use it again), so they have no reason to close it on their end. Your credit score benefits because the account history stays on your report and the available credit stays in your favor.
If the card does charge an annual fee and you have not used it in over a year, the math changes. A $95 or $150 annual fee is real money to lose. In that case, your next step is to call the issuer and ask whether they will waive the fee or convert the card to a no-fee version of the same product.
Key Takeaways
- Keeping an old card open with no annual fee protects your credit score by maintaining available credit and account history.
- If a card charges an annual fee, call the issuer first to ask about waiving it or switching to a no-fee card before you close it.
- Closing a card should be your last resort because it lowers your available credit and can drop your score by 10 to 50 points.
- If you do close a card, pay off the balance first and do it when you are not about to explore for a loan or mortgage.
- Some cards offer rewards or cash back even if you do not use them regularly — keeping them active with small purchases preserves the benefit.
How to keep an old card active without using it much
Card issuers sometimes close accounts that show no activity for 12 months or longer. You can prevent this by putting a small recurring charge on the card — a subscription, a streaming service, or a utility bill — and paying it off in full each month. This keeps the account active in the issuer's system without carrying a balance or paying interest.
Another approach is to use the card once every few months for a small purchase, then pay it off when ready. This is less reliable than a recurring charge because you have to remember to do it, but it works if you are disciplined about the timing.
If the card offers rewards or cash back, using it occasionally means you are actually earning something on money you would spend anyway. A 2% cash back card on groceries or gas can add up to $100 or more per year if you put regular spending through it.
When to call the issuer and negotiate
Before you close any card, call the customer service number on the back and explain that you are considering closing the account. Many issuers have retention teams trained to offer you something to stay — a waived annual fee, a higher credit limit, bonus points, or a lower interest rate.
This works best if you have been a customer for several years and have a clean payment history. New cardholders or those with missed payments have less leverage. The worst that happens is they say no, and you are back where you started.
If the card has an annual fee and the issuer will not budge, ask whether they can convert it to a different card in their product line that has no annual fee. Many issuers allow this without closing the original account, which preserves your account age and credit history.
How closing a card affects your credit score
Closing a credit card removes available credit from your report. If you have a $5,000 limit and you close that card, your total available credit drops by $5,000. If you carry balances on other cards, your utilization ratio jumps when ready.
The impact varies depending on how much credit you already have and how much you are using. Someone with $50,000 in total limits who closes a $5,000 card sees a smaller hit than someone with $10,000 in total limits. The score drop typically ranges from 10 to 50 points, but can be higher if your utilization was already above 30%.
The damage is temporary. As you pay down balances and time passes, your score recovers. But if you are planning to explore for a mortgage, car loan, or other credit in the next 6 to 12 months, closing a card right before that process is poor timing.
Steps to close a card if you decide you must
If you have decided that closing the account is the right move, follow this order: First, pay off any balance on the card completely. Do not close an account while you owe money on it. Second, wait at least a few weeks after paying it off, then call the issuer's customer service line.
Tell them you want to close the account. They may ask why or offer you a retention offer — listen to what they say, but if you have already decided, be clear. Ask them to confirm in writing that the account is closed and that you owe a zero balance. Request that they note on your credit report that you closed the account at your request, not due to missed payments or other problems.
After you hang up, monitor your credit report over the next 30 to 60 days to make sure the closure is reported correctly. You can check your report free once per year at annualcreditreport.com, which is the official government site for this purpose.
What happens to rewards points and cash back
If the card has an outstanding balance of rewards points or cash back, redeem it before you close the account. Most issuers let you redeem points or cash back even after the account is closed, but some have time limits — usually 30 to 90 days. Do not assume you can come back for it later.
Check your card's terms or call the issuer to find out what happens to unused rewards after closure. Some programs let you keep the points indefinitely; others delete them. If you have a significant balance, redeem it before you initiate the closure.
Alternatives if you want to stop using the card but keep the account
You do not have to choose between keeping the card open and using it regularly. A middle ground is to lock the card through your issuer's app or website. Most major card issuers now offer a lock feature that prevents new charges without closing the account. The card stays on your credit report, the account stays active, and you cannot accidentally use it.
Another option is to remove the card from your wallet and digital payment apps, but keep the physical card in a safe place at home. This removes the temptation to use it while preserving the account. If you ever need the card again — for example, if you lose access to your other cards — you know where it is.
Frequently Asked Questions
Will closing a credit card hurt my credit score?
Yes, usually by 10 to 50 points, depending on how much credit you have and how much you are using. The damage comes from losing available credit, which raises your utilization ratio. The impact is temporary and your score recovers over time, but closing a card right before you explore for a loan is poor timing.
What if the card issuer closes my account without asking?
Issuers can close inactive accounts, usually after 12 months with no activity. To prevent this, use the card occasionally or set up a small recurring charge that you pay off monthly. If an account closes without your request, contact the issuer and ask them to reopen it — many will if you have a good history with them.
Can I reopen a card I closed?
Sometimes. If you closed the account recently and in good standing, the issuer may reopen it. However, the account history may restart, which can affect your credit score. It is better to keep the card open from the start than to close it and try to reopen it later.
Should I destroy the physical card if I am not using it?
You can, but it is not necessary. Keeping the card in a safe place at home does no harm and means you have it if you need it. If you are worried about fraud, lock the card through your issuer's app instead. Destroying the card does not close the account — you still need to contact the issuer to do that.
What if I have multiple old cards — should I close some of them?
Keep the ones with no annual fee and close the ones that charge you money each year, unless the issuer will waive the fee. If you have several cards with annual fees, prioritize closing the ones you value least or have used least recently. Close them one at a time, not all at once, to minimize the impact on your credit score.