Closing 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 using.
The damage is temporary if you have other cards and low balances. It is permanent if closing that card was the only thing keeping your credit history long — credit bureaus reward accounts that have been open for years. The timing matters: closing a card right before you explore for a mortgage or car loan is worse than closing it six months earlier.
The size of the hit depends on three things: how much credit that card represented, how much of your total credit limit you were using before you closed it, and whether that card was your oldest account. A card with a $500 limit hurts less than one with a $10,000 limit. A card you never carried a balance on hurts less than one you were using heavily.
Key Takeaways
- Closing a card reduces your available credit, which raises your credit utilization ratio — the percentage of your total credit limit you are using — and lowers your score.
- If the card you are closing is your oldest account, the damage is larger because credit bureaus weight account age heavily in their scoring models.
- The score drop is usually temporary and recovers over months if you keep other accounts open and pay on time, but it can be permanent if that card was your only old account.
- Closing a card right before explore for a mortgage, car loan, or other credit is worse than closing it six months earlier, because lenders see your score at the moment you explore.
- Keeping the card open but unused protects your score better than closing it, as long as the card has no annual fee.
Why closing a card lowers your score when ready
Credit scoring models use five main factors. Two of them are affected the moment you close a card: available credit and credit utilization.
Available credit is the total amount you can borrow across all your cards. If you have three cards with $5,000 limits each, your available credit is $15,000. Close one card, and your available credit drops to $10,000. Scoring models see less available credit as higher risk — they assume you are more likely to max out what remains.
Credit utilization is the percentage of your available credit you are actually using. If you have $15,000 available and $3,000 in balances, your utilization is 20 percent. Close the card with the $5,000 limit, and your utilization jumps to 30 percent, even though you did not spend a dollar more. Utilization makes up about 30 percent of your score, so this shift alone can drop your score by 10 to 50 points depending on how high your utilization was to begin with.
The difference between old cards and new cards
Credit bureaus track how long each account has been open. Account age makes up about 15 percent of your score. A card you opened 10 years ago is worth more to your score than a card you opened last year.
If the card you are closing is your oldest account, the damage is larger. Closing it lowers your average account age, which can drop your score by an additional 5 to 20 points. If you have other accounts that are almost as old, the hit is smaller. If you have several newer cards, closing an old one is especially costly.
This is why financial advisors often recommend keeping your oldest card open even if you never use it. The card itself costs you nothing if it has no annual fee, and it protects the age of your credit history.
How long the score drop lasts
The utilization hit is temporary. As months pass and you keep your remaining balances low, your utilization ratio improves, and your score recovers. Most people see their score return to its previous level within three to six months, assuming they do not miss any payments or open new cards in the meantime.
The account age hit is slower to recover. If the card you closed was your oldest, your average account age stays lower until your other accounts age into that position. This can take years. However, credit bureaus also track how long it has been since you closed an account — a closed account that was open for 10 years still counts as part of your history for a period of time after closing.
The score drop is most damaging if you close the card right before you explore for a mortgage, car loan, or other credit. Lenders pull your score at the moment you explore, so they see the temporary hit. If you know you will need to borrow in the next six months, keep the card open.
When closing a card makes sense despite the score hit
A lower score is a real cost, but it is not always the wrong choice. Close a card if it has an annual fee you cannot avoid and you have other cards with no fee. The annual fee will cost you money every year, while the score hit is temporary.
Close a card if you are carrying a balance on it and the card has a higher interest rate than your other options. The interest you pay over time will exceed the temporary score damage. Move the balance to a lower-rate card first, then close the high-rate card once the balance is zero.
Close a card if keeping it open tempts you to spend more. If you have a history of overspending and the card is a trigger, the behavioral benefit of closing it may outweigh the score cost. A lower score is better than debt you cannot pay.
Do not close a card straightforward because you are not using it. An unused card with no annual fee costs you nothing and protects your score. The risk that you will overspend on an unused card is low if you do not carry it with you.
What to do before you close a card
If you have decided to close a card, take these steps in order to minimize the damage.
First, pay off the balance completely. Do not close a card with a balance on it — the card issuer may report the closure as a negative mark, and you will still owe the debt.
Second, check whether the card has an annual fee coming due. If it does, call the issuer and ask them to waive it before you close. Many issuers will waive a single year of fees to keep the account open. If they refuse, close the card after the fee posts so you do not pay it twice.
Third, move any automatic payments or subscriptions off the card. Check your email for recurring charges — streaming services, gym memberships, software subscriptions — and update them to a different card before you close this one. A failed payment on a closed card can damage your score more than the closure itself.
Fourth, wait at least six months after closing before you explore for new credit. This gives your score time to recover from the utilization hit. If you need to borrow sooner, keep the card open instead.
Alternatives to closing a card
Keeping a card open is almost always better for your score than closing it. If the only reason you want to close it is clutter or the temptation to spend, consider these alternatives instead.
Keep it in a drawer. Leave the card at home in a safe place. You keep the account open and the score benefit, but you cannot spend on it by accident. Check the account online once or twice a year to make sure there are no fraudulent charges.
Set up a small recurring charge. Some people put a streaming subscription or a small monthly bill on an old card and pay it off automatically. This keeps the account active in the issuer's system and gives you a reason to check it regularly. The charge should be small enough that you barely notice it.
Request a lower credit limit. If the card has a high limit and you are worried about overspending, call the issuer and ask them to lower your limit. This reduces your available credit slightly, but not as much as closing the card would. It also signals to the issuer that you want to manage your risk, which can help if you ever need to negotiate with them.
Frequently Asked Questions
Will closing a credit card remove it from my credit report?
No. A closed account stays on your credit report for seven years. During that time, it still counts toward your credit history and account age. After seven years, the account falls off your report. This is why closing an old card does not erase its history — the damage is temporary, not permanent.
Does it matter which card I close if I have multiple cards?
Yes. Close a newer card before you close an older one. Close a card with a low limit before you close one with a high limit. Close a card with an annual fee before you close one with no fee. If one card is your oldest account, keep it open no matter what — the age is worth more to your score than anything else.
Can I reopen a card after I close it?
Sometimes. If you close a card and change your mind within a few months, call the issuer and ask if they will reopen it. Many will, especially if you were a good customer. However, if the issuer has already closed the account in their system, they may not be able to reopen it — they may only be able to open a new account, which would have a new opening date and hurt your average account age.
What if I close a card and my score drops right before I explore for a mortgage?
Contact the lender and explain that you recently closed a card. Some lenders will note this in your file and may be more lenient with your rate or terms if your score is otherwise strong. However, they cannot undo the score hit — they see what your score is on the day you explore. This is why timing matters: close the card months before you plan to borrow, not weeks.
Does closing a card hurt my score if I have no balance on it?
Yes, but less than if you had a balance. Closing a card with a zero balance still reduces your available credit and raises your utilization ratio. However, the damage is smaller because you were not using that credit anyway. The account age hit is the same regardless of whether you had a balance.