Close a credit card when you no longer use it, have paid off the balance, and are ready to accept a temporary dip in your credit score.
The timing matters because closing a card affects two things that lenders look at: your credit utilization ratio (how much of your available credit you are using) and your average account age (how long your accounts have been open). Both drop when you close a card, which usually lowers your score by 5 to 50 points depending on your overall credit profile. That dip is temporary — your score typically recovers within a few months — but it happens when ready.
The best time to close is when you have paid the card to zero, you are not planning to explore for new credit in the next 3 to 6 months, and you have other cards open to keep your utilization ratio healthy. If you are planning to explore for a mortgage, car loan, or another major credit product soon, wait until after you have been approved.
Key Takeaways
- Close a card only after you have paid the full balance to zero, because closing an account with a remaining balance does not erase what you owe.
- Your credit score will drop when you close a card, but the drop is usually temporary and recovers within a few months.
- Avoid closing a card within 3 to 6 months of explore for a mortgage, auto loan, or other major credit, because the score dip may affect your approval or interest rate.
- If you have only one or two credit cards, keep at least one open to maintain your average account age and show active credit history.
- Call the card issuer to close the account, confirm the balance is zero, and ask them to report the closure to the credit bureaus.
Pay the balance to zero before you close
Closing a card does not erase the debt on it. If you close an account with an outstanding balance, you still owe that money, and the card issuer will continue to charge interest until you pay it off. The account will show as closed on your credit report, but the balance remains your responsibility.
Before you call to close, log into your account online or check your latest statement to confirm the balance is exactly zero. If you have a pending payment that has not yet posted, wait for it to clear. Some people set up a final automatic payment a few days before they plan to close, just to be certain.
Understand the impact on your credit score
Closing a card lowers your score because it reduces the total credit available to you. If you had a $5,000 limit on that card and you were using $1,000 across all your cards, your utilization was 20 percent. After you close it, your available credit drops to $15,000 (assuming you have other cards), and that same $1,000 now represents 6.7 percent utilization — which is better. But the bureaus also see that you closed an account, and that action itself triggers a small penalty.
The larger hit comes if closing the card significantly raises your utilization ratio. If you have three cards with $5,000 limits each ($15,000 total) and you are using $3,000, your utilization is 20 percent. Close one card and your available credit drops to $10,000, making your utilization 30 percent. That jump can cost you 10 to 20 points.
The score recovery is usually quick. Most people see their score return to its previous level within 3 to 6 months, as long as they continue to pay other accounts on time and keep utilization low.
Wait if you are explore for credit soon
If you are planning to explore for a mortgage, car loan, personal loan, or new credit card within the next 3 to 6 months, close the card after you have been approved and funded. Lenders pull your credit report when you explore, and a recent account closure can lower your score at the exact moment it matters most.
A lower score may result in a higher interest rate, a smaller loan amount, or a denial. Even a 20-point drop can move you from one rate tier to another on a mortgage or auto loan, costing you hundreds of dollars over the life of the loan. If you can wait, do.
Keep at least one old card open
Your average account age is the average of how long all your credit accounts have been open. It makes up about 15 percent of your credit score. Closing an old card lowers this average, which can hurt your score more than closing a newer card.
If you have only one or two credit cards, keep at least one open indefinitely — especially if it is one of your oldest accounts. You do not have to use it; you can put a small recurring charge on it (like a streaming service) and pay it off monthly to keep it active. Issuers sometimes close inactive accounts, so occasional use protects you.
If you have multiple cards and want to close one, close the newest one first. The impact on your average account age will be smaller, and your score will recover faster.
Call the issuer and confirm the closure
Contact the card issuer by phone — the number is on the back of your card or on your statement. Tell them you want to close the account. They may ask why, and they may offer you a lower interest rate or annual fee waiver to keep it open. You can accept or decline.
Before you hang up, confirm three things: that the balance is zero, that there are no pending charges, and that the issuer will report the closure to all three credit bureaus (Equifax, Experian, and TransUnion). Ask for a confirmation number and note the date and time of the call.
After you close, do not use the card again. If you have set up automatic payments on that card, move them to another payment method before you close.
Check your credit report after closing
About 30 to 45 days after you close, check your credit report to confirm the closure was reported correctly. You can get a free report from each bureau once per year at annualcreditreport.com, which is the official government site.
Look for the closed account to appear with a status of "closed by consumer" or "account closed." If it shows as "closed by creditor" or if the balance is not zero, contact the issuer again and ask them to correct it. Errors on your credit report can lower your score unnecessarily.
Frequently Asked Questions
Will closing a credit card hurt my credit score?
Yes, but usually only temporarily. Your score typically drops 5 to 50 points when ready after closing, depending on your credit profile and how much of your available credit that card represented. Most people see their score return to its previous level within 3 to 6 months.
What happens to my rewards points when I close a card?
Rewards points are usually yours to keep after you close the card, but the rules vary by issuer. Some let you redeem points for 30 to 60 days after closure; others let you keep them indefinitely. Call the issuer before you close and ask about their specific policy so you do not lose points you have earned.
Can I close a credit card if I still owe money on it?
You can call and request closure, but the account will close with the balance still owed. You will continue to receive bills and pay interest until the balance is paid off. It is better to pay the card to zero first, then close it.
Should I close old credit cards or new ones?
If you have to close a card, close a newer one. Older accounts help your average account age, which affects your credit score. Keeping your oldest card open — even if you do not use it — protects your score more than closing it.
What should I do with the physical card after I close the account?
Cut it up or shred it so it cannot be used. The account is closed, so the card will not work, but destroying it prevents accidental use or theft. Some people keep one card in a safe place in case they need the account number for a dispute, but this is optional.