Closing a credit card will lower your credit score, usually by 10 to 50 points, because it reduces the total credit available to you and may raise the percentage of credit you're using on remaining cards.
The damage is temporary — your score typically recovers within three to six months if you keep other accounts in good standing. But the timing matters. If you're planning to explore for a mortgage, car loan, or another form of credit within the next six months, closing a card now will make that process harder.
The size of the drop depends on how much credit you have across all your cards and how much of it you're currently using. Someone with $50,000 in total credit limits who closes a $5,000 card will see less damage than someone with $10,000 in limits who closes the same card.
Key Takeaways
- Closing a credit card reduces your available credit, which raises your credit utilization ratio and lowers your score by 10 to 50 points on average.
- The damage is usually temporary — your score recovers within three to six months if you pay other bills on time.
- If you need credit in the next six months, closing a card now will make approval harder and may raise the interest rate you're offered.
- Keeping the card open but unused is usually better for your score than closing it, as long as there is no annual fee.
- Closing an old card hurts more than closing a new one, because age of accounts also affects your score.
Why Your Score Drops When You Close a Card
Your credit score is built from five factors: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%). Closing a card damages three of these.
Credit utilization — the percentage of your total credit limit you're using — is the biggest when ready hit. If you have three cards with $5,000 limits each ($15,000 total) and you carry a $3,000 balance, your utilization is 20%. Close one card and your total limit drops to $10,000, making that same $3,000 balance a 30% utilization. Credit scoring models treat higher utilization as riskier, so your score falls.
Length of credit history takes a smaller but real hit. If the card you're closing is your oldest account, closing it lowers the average age of your remaining accounts. Older accounts signal stability to lenders, so this matters more if you don't have many other old accounts.
Credit mix — having different types of credit like cards, installment loans, and mortgages — counts for 10% of your score. Closing a card reduces the variety of credit types you hold, though this effect is usually minor unless you only have credit cards.
How Much Your Score Will Drop
The drop is not fixed. It depends on your current score, how much total credit you have, and which card you're closing.
Someone with a score of 750 and $100,000 in total credit limits might see a 10-point drop from closing a $5,000 card. Someone with a score of 650 and $15,000 in total limits might see a 40-point drop from closing the same card. The lower your score and the smaller your total credit, the bigger the percentage impact.
Closing an old card hurts more than closing a new one. If you close a card you've held for 15 years, the damage to your average account age is larger than if you close one you opened last year. Similarly, closing your oldest card does more damage than closing your newest.
When the Drop Matters Most
A 20-point drop is annoying but not urgent if you're not planning to borrow money. But if you're shopping for a mortgage, car loan, or personal loan within the next six months, closing a card now could cost you real money.
Lenders use your credit score to set your interest rate. A drop from 750 to 730 might not change your rate on a mortgage. A drop from 680 to 660 could raise your rate by 0.5%, which on a $300,000 mortgage means thousands of dollars in extra interest over 30 years.
If you're already in the process of explore for credit, closing a card is especially damaging because lenders pull your score at the moment you explore. A recent closure shows up when ready.
Keeping the Card Open vs. Closing It
If the card has no annual fee, keeping it open is almost always better for your score than closing it. You don't have to use it — just leave it open with a zero balance. This preserves your available credit and keeps the account age in your history.
If the card has an annual fee, the math changes. A $95 annual fee over five years is $475 in cost. If closing the card drops your score 30 points and that costs you 0.25% more in interest on a mortgage, you need to calculate whether the fee is worth paying to avoid that interest cost. For most people, it is not.
One exception: if the card has a high annual fee ($300 or more) and you have plenty of other old accounts, closing it may make sense. But this is rare.
If you're closing the card because you want to reduce temptation to overspend, that's a valid reason — but consider asking the issuer to lower your credit limit instead. This reduces your available credit (and thus your temptation) without closing the account, so your score takes less damage.
How Long Recovery Takes
Your score begins recovering as soon as you close the card, assuming you keep paying other bills on time. Most people see their score return to its pre-closure level within three to six months.
The recovery is faster if your utilization on remaining cards is low. If you close a card and your utilization stays below 10% across your other cards, the damage is minimal and recovery is quick. If closing the card pushes your utilization above 30%, recovery takes longer.
The recovery is also faster if you have a long history of on-time payments. People with scores above 750 typically recover faster than people with scores below 650, because the scoring model trusts their payment behavior more.
What Not to Do When Closing a Card
Do not close multiple cards at once. Each closure damages your score independently, and closing three cards in one month can drop your score 50 to 100 points. If you need to close more than one card, space them out by at least three to six months.
Do not close a card right before explore for credit. If you're planning to buy a house or car in the next six months, do not close a card now. Wait until after you've been approved and the loan has closed.
Do not close your oldest card. If you have multiple cards you're considering closing, close a newer one instead. The age of your accounts matters, and your oldest card is usually doing the most work for your score.
Do not close a card with a zero balance and then when ready open a new one to replace it. This creates two score hits — one from the closure and one from the new account inquiry — when you could have just kept the old card open.
Frequently Asked Questions
How long does it take for a closed credit card to stop showing on my credit report?
A closed account stays on your credit report for seven years if it was in good standing when you closed it. It continues to count toward your credit history during that time, which is actually good for your score. After seven years, it falls off automatically.
Will closing a credit card hurt my score if I have no balance on it?
Yes, closing a card with a zero balance still lowers your score because it reduces your total available credit and raises your utilization ratio on remaining cards. The damage is usually smaller than closing a card you're carrying a balance on, but it still happens.
Can I reopen a credit card after I close it?
You can ask the issuer to reopen the account, but they may refuse or treat it as a new process. If they treat it as new, you'll get a hard inquiry on your credit report, which temporarily lowers your score. It's usually better to keep the card open in the first place.
Does closing a credit card affect my ability to get a mortgage?
Yes, if you close it within six months of explore for a mortgage. Lenders pull your credit score at the time you explore, so a recent closure will lower the score they see. If you're planning to buy a house, avoid closing cards for at least six months before you start the mortgage process.
What if I close a card and my score drops below a certain threshold I need?
Your score will recover as you continue making on-time payments and your utilization stays low. The recovery typically takes three to six months. If you need credit before then, you may face higher interest rates or denial, so timing the closure matters.