Closing a credit card will lower your credit score, but the damage is temporary and depends on which card you close
Closing a credit card hurts your score because it shrinks the total credit available to you. Credit bureaus measure how much of your available credit you are using — called your utilization ratio. When you close a card, your available credit drops, which makes your existing balances look larger by comparison, even if you haven't charged anything new. A card with a zero balance hurts less than a card you're carrying a balance on, but closing either one will cause a dip.
The score drop is usually temporary. Most people see their score recover within a few months if they keep paying bills on time and don't rack up new debt. The older the card you're closing, the bigger the initial hit — because closing an old account also removes a long payment history from your record. A card you've had for 15 years will damage your score more than one you opened last year.
The real question isn't whether to close the card, but whether the reason you want to close it is worth the temporary score dip. If you're closing it to stop overspending, that's worth it. If you're closing it because you think it's hurting your score just by existing, you're wrong — an unused card with a zero balance actually helps your score.
Key Takeaways
- Closing a credit card lowers your available credit, which makes your utilization ratio worse and drops your score by 5 to 50 points depending on how much credit you're losing.
- The damage is temporary — most people recover their score within three to six months of closing a card if they keep paying on time.
- Closing an old card hurts more than closing a new one because you lose the payment history that card was building.
- A card with a zero balance that you never use doesn't hurt your score by sitting there — keeping it open actually helps by keeping your available credit high.
- If you're closing a card because you're worried about debt, paying it down first and then leaving it open is better for your score than closing it.
How closing a card changes your credit score
Your credit score is built from five pieces of information: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%). Closing a card damages two of these at once.
First, it raises your utilization ratio. If you have two cards with $5,000 limits each and you're carrying a $2,000 balance on one, your utilization is 20% ($2,000 ÷ $10,000). If you close the card with the zero balance, your utilization jumps to 40% ($2,000 ÷ $5,000). Credit bureaus treat high utilization as a sign you're running out of money, so your score drops. The higher your utilization was already, the worse the damage.
Second, it shortens your average account age. If you have three cards open for 10 years, 5 years, and 1 year, your average age is 5.3 years. Close the 10-year card and your average drops to 3 years. Older accounts signal stability, so losing them hurts. The effect fades over time — the closed account stays on your credit report for 10 years, so it still counts toward your history, just with less weight.
When closing a card does the most damage
Closing a card hurts most when you're carrying balances on your other cards. If you have $8,000 in debt spread across three cards with $10,000 limits each, your utilization is 27%. Close one card and your available credit drops to $20,000, making your utilization 40%. The jump is steep and when ready.
Closing an old card also does more damage than closing a new one. A card you've had for 20 years is worth more to your score than a card you opened six months ago. Closing the old card removes years of on-time payments from your record, even though that history stays on your report — it just counts for less once the account is closed.
The worst scenario is closing your oldest card while carrying high balances on other cards. This combines both problems: you lose a long payment history and you spike your utilization at the same time. Your score could drop 50 points or more.
When closing a card does the least damage
Closing a card hurts the least when you have a zero balance on it and you have other old cards still open. If you're closing a two-year-old card with no balance while your oldest card is 15 years old, you're not losing much payment history. Your utilization also barely moves because the card wasn't carrying debt anyway.
Closing a newer card also matters less because it hasn't built up much history yet. A card you opened last year is worth far less to your score than one you've had for a decade, so closing it causes a smaller dip. You might see a 5 to 10 point drop instead of 30 to 50.
If you have many cards open, closing one also does less damage because you're not losing as much available credit proportionally. Someone with ten $5,000-limit cards who closes one is only losing 10% of their available credit. Someone with two $5,000-limit cards who closes one is losing 50%.
What to do before you close a card
Before you close a card, pay down any balance on it to zero. This does two things: it prevents you from carrying a balance after the card is closed (which would be impossible), and it lowers your utilization before you lose the available credit. If you're going to take a score hit anyway, at least don't take it while carrying debt.
Check whether the card has an annual fee. If it does and you're not using it, closing it makes sense. If it doesn't have a fee, leaving it open with a zero balance is better for your score. You get all the benefits of the available credit with none of the downsides.
If you're closing the card because you're worried about overspending, that's a legitimate reason — but consider whether you could lock the card in a drawer instead. Keeping it open but not using it preserves your credit history and available credit while still removing the temptation to charge.
Call the card issuer before you close it and ask whether they'll waive the annual fee if you keep the account open. Many will, especially if you've been a customer for years. This is worth a five-minute phone call.
What happens to your score after you close a card
Your score will drop within a few days of closing the card — the credit bureaus update their records when the issuer reports the account as closed. The drop is usually between 5 and 50 points depending on the factors above. You'll see the biggest dip in the first month.
After that, your score will start to recover if you keep paying your other bills on time and don't take on new debt. Most people recover most of the lost points within three to six months. The closed account stays on your credit report for ten years, so it continues to help your score even after it's closed — it just counts for less than an open account would.
If you're planning to explore for a mortgage, car loan, or other major credit in the next few months, closing a card right before you explore is bad timing. Lenders see the recent account closure and the lower score together, which can make them nervous. If you're going to close a card, do it at least six months before you plan to borrow.
Alternatives to closing a card
If you're closing a card because you don't use it, consider keeping it open instead. Use it once or twice a year for a small charge you'd make anyway — a coffee, a gas fill-up — then pay it off when ready. This keeps the account active and the issuer happy, and it preserves your credit history and available credit.
If you're closing a card because you're overspending, the problem isn't the card itself — it's your spending. Closing the card might help you stop for a while, but you'll face the same temptation with other cards or other forms of credit. A better move is to lock the card away or give it to someone you trust, then work on a budget that keeps you from overspending in the first place.
If you're closing a card because it has an annual fee, call and ask the issuer to waive it or downgrade you to a no-fee version of the card. Many issuers will do this to keep your business. You avoid the score hit and you stop paying the fee.
Frequently Asked Questions
How much will my score drop if I close a credit card?
The drop depends on how much available credit you're losing and how old the card is. Closing a new card with a zero balance might drop your score 5 to 15 points. Closing an old card or one that was helping keep your utilization low could drop it 30 to 50 points. Most people recover within three to six months.
Should I close a credit card I don't use?
No. An unused card with a zero balance helps your score by keeping your available credit high. Close it only if it has an annual fee you don't want to pay. If it's free, leaving it open costs you nothing and helps your score.
Will closing a credit card affect my ability to get a loan?
Yes, temporarily. A recent account closure and lower score together can make lenders nervous. If you're planning to explore for a mortgage or car loan, close the card at least six months before you explore, so your score has time to recover.
Can I reopen a credit card after I close it?
Maybe. Some issuers will reopen a closed account if you ask within a short window, usually 30 to 60 days. After that, you'd have to explore again as a new customer, which counts as a new inquiry and starts your account age over from zero.
Does paying off a credit card balance help my score more than closing the card?
Yes. Paying off a balance lowers your utilization without shrinking your available credit, so your score improves instead of dropping. If you're trying to improve your score, paying down balances is always better than closing cards.