Closing a credit card usually does hurt your credit score, but the damage is temporary and the amount depends on how much credit you're using elsewhere.
When you close a card, your credit score typically drops because two of the factors that make up your score change when ready: your total available credit shrinks, and the ratio of debt you're carrying to credit available goes up. If you had a $5,000 limit on that card and $20,000 in limits across all your cards, closing it drops your total available credit to $15,000. If you're carrying a $3,000 balance on other cards, that ratio just jumped from 15% to 20%.
The score hit is usually between 5 and 45 points, depending on how much of your available credit that card represented and how much debt you already carry. If the closed card had a long history with no missed payments, you may also lose some points because your average account age drops. The good news: this damage fades. Most people see their score recover within three to six months if they keep making on-time payments and don't rack up new debt.
Key Takeaways
- Closing a card reduces your total available credit, which raises your debt-to-credit ratio and typically lowers your score by 5 to 45 points.
- The impact is smaller if the card had a small credit limit or if you have lots of other available credit you're not using.
- Closing a card with a long payment history costs you more points than closing a newer card, because your average account age drops.
- Your score usually recovers within three to six months if you keep paying on time and don't increase your debt.
- Closing a card is still sometimes the right choice — for example, if the annual fee costs more than the benefit of keeping the account open.
When the damage is small
If the card you're closing had a small credit limit relative to your total available credit, the score hit will be minimal. Someone with $100,000 in total credit limits across ten cards will barely notice closing a card with a $2,000 limit. The debt-to-credit ratio barely moves, and the damage is usually just a few points.
The damage is also smaller if you're not carrying much debt. If you have $50,000 in available credit and only $1,000 in balances, closing a card that reduces your available credit to $45,000 still leaves you with a very healthy ratio. The score drop happens, but it's not dramatic because you're not using much of your available credit anyway.
When the damage is larger
If the card you're closing represents a large chunk of your available credit, or if you're already carrying balances on other cards, the score hit will be steeper. Someone with only $10,000 in total limits who closes a $3,000 card and carries a $2,000 balance will see a bigger drop than someone with $100,000 in limits and no balances.
The damage is also larger if the card has been open for many years. Credit scoring models reward a long payment history, so closing an old account costs you more points than closing a card you opened last year. If you're trying to keep your score as high as possible, closing a newer card first is the smarter move.
How long the damage lasts
The initial score drop happens the moment the card closes. Within a few months, as you continue to make on-time payments and your debt-to-credit ratio stays stable or improves, your score will climb back up. Most people see recovery within three to six months.
The closed account itself stays on your credit report for up to ten years, but it stops hurting your score after a few months because it's no longer part of your active credit mix. The account age still counts toward your average account age for a while, which actually helps your score. The real damage — the ratio change — fades as soon as you stop carrying balances or open new credit.
Reasons closing a card might still make sense
Even though closing a card hurts your score, it's sometimes the right financial move. If a card charges an annual fee and you're not using it, closing it saves you money. A $95 annual fee costs you more in the long run than a temporary 10-point score dip, especially if you're not planning to explore for a loan soon.
Closing a card also makes sense if you're struggling with debt and the open account tempts you to spend more. If keeping the card open means you'll rack up new balances, the score damage from closing it is worth the protection. Similarly, if you have too many cards to manage and one is costing you money or attention, closing it simplifies your finances.
If you do decide to close a card, pay off any balance first, then call the issuer and ask them to close the account. Ask them to note in your file that you closed it at your request, not because of missed payments. This distinction doesn't affect your score directly, but it's cleaner for your record.
What to do instead of closing
If you want to keep your score as high as possible, consider keeping the card open even if you're not using it. An open card with a zero balance helps your debt-to-credit ratio and costs you nothing if there's no annual fee. Many people keep old cards open for exactly this reason.
If the card has an annual fee, call the issuer and ask if they'll downgrade you to a version of the card with no fee. Many issuers will do this rather than lose the customer entirely. You keep the account history, the available credit, and the account age — and you stop paying the fee.
Frequently Asked Questions
How much will my score drop if I close a card?
Most people see a drop of 5 to 45 points. The exact amount depends on how much of your total available credit that card represented and how much debt you're already carrying. If the card had a long history with no missed payments, the drop may be larger because you lose account age.
Should I close a credit card before explore for a mortgage?
No. Close it after you get the mortgage, or don't close it at all. Lenders look at your credit report in the weeks before you explore, and closing a card right before that will lower your score and raise questions about why you did it. If you want to close a card, do it at least six months before you plan to explore for a loan.
Will my score recover if I close a card?
Yes, usually within three to six months. Your score recovers as your debt-to-credit ratio stabilizes and you continue making on-time payments. The closed account stays on your report for years, but it stops hurting your score after a few months.
Is it better to close a new card or an old card?
Close the new card if you have to close one. Closing an old card costs you more points because your average account age drops. An old card with a long payment history is more valuable to your score than a newer card, so keep the old one open if possible.
What if the card has an annual fee?
Call the issuer and ask if they'll convert it to a no-fee version of the card. Many will do this to keep you as a customer. If they won't, closing the card to stop paying the fee is reasonable — the score damage is usually worth the savings.