Closing a credit card usually lowers your credit score, sometimes by 10 to 50 points, because it shrinks the total credit you have available and may raise the percentage of credit you are using.
The damage is not permanent — your score recovers over time as you build positive payment history and the closed account ages — but the drop happens when ready. The size of the drop depends on how much credit that card represented, how much you owe on your other cards, and how old the account is. Closing a card you have had for years causes more damage than closing a new one.
The two main reasons your score falls are available credit and credit utilization ratio. When you close a card, the credit limit on that card no longer counts toward your total available credit. If you owe $5,000 across your remaining cards and you just closed a card with a $10,000 limit, your utilization ratio jumps from 33% to 50% — and credit bureaus treat higher utilization as riskier. The older the closed account, the more your score may drop, because age of accounts is part of your score calculation.
Key Takeaways
- Closing a credit card reduces your available credit and typically raises your credit utilization ratio, which lowers your score when ready.
- The damage is usually 10 to 50 points but can be larger if the card had a high credit limit or you have high balances on other cards.
- Your score recovers as you pay down balances and the closed account ages; the recovery takes months to a year or more depending on your overall credit profile.
- Keeping a card open but unused (with zero balance) preserves your available credit and avoids the score drop entirely.
- If you must close a card, do it when your score is already strong and your utilization ratio is low, to minimize the damage.
Why Available Credit Matters to Your Score
Credit bureaus use a metric called credit utilization ratio — the percentage of your total available credit that you are actually using. If you have $50,000 in total credit limits across all your cards and you owe $10,000, your utilization is 20%. If you close a card with a $15,000 limit, your total available credit drops to $35,000, and the same $10,000 debt now represents 29% utilization. The ratio moved against you even though you did not borrow any more money.
Utilization makes up about 30% of your credit score calculation. Scores tend to improve when utilization is below 30%, and they worsen as utilization climbs. Closing a card that you were not using — a card with a zero balance — is especially damaging because you lose available credit without reducing what you owe. Closing a card you were carrying a balance on is less damaging to utilization, because you reduce both the available credit and the debt, but the score still usually falls because of the other factors at play.
How Account Age Affects the Damage
The age of the account you are closing matters because credit bureaus factor the average age of your accounts into your score. A card you have held for 10 years contributes more to that average than a card you opened last year. When you close the older card, you lower your average account age, which can lower your score further on top of the utilization hit.
The impact is usually small if you have many other accounts with long histories, but it becomes larger if the closed card was one of your oldest accounts. This is one reason closing a new card (opened within the last year or two) causes less damage than closing a card you have had for a decade. If you are trying to decide which card to close, closing the newest one minimizes the score damage — though keeping it open costs nothing and damages your score not at all.
When the Score Drop Is Larger
The score drop is usually largest when you close a card with a high credit limit, because you are removing a large amount of available credit. Closing a card with a $500 limit has less impact than closing one with a $10,000 limit. The drop is also larger if you already carry high balances on your other cards, because closing a card pushes your utilization ratio higher.
For example: if you have $30,000 in total credit limits, owe $15,000 across your cards (50% utilization), and you close a card with a $10,000 limit, your available credit falls to $20,000 and your utilization jumps to 75%. That large jump usually causes a bigger score drop than the same closure would if you only owed $6,000 (30% utilization). The damage is compounded if the card you are closing is one of your oldest accounts.
How Long It Takes Your Score to Recover
Your score begins to recover as soon as you lower your utilization ratio on your remaining cards. If you pay down balances after closing a card, your utilization falls and your score rises. The recovery is usually noticeable within one or two billing cycles — typically 30 to 60 days — if you make significant payments.
Full recovery to your previous score takes longer, usually several months to a year, depending on how much damage the closure caused and how quickly you rebuild your utilization ratio. The closed account itself remains on your credit report for seven years, but its impact on your score fades over time. Older closed accounts have less weight in the score calculation than recent ones, so a card you closed two years ago affects your score less than a card you closed last month.
Keeping a Card Open Without Using It
The simplest way to avoid a score drop is to keep the card open with a zero balance. You preserve the available credit, keep your utilization ratio low, and maintain the account age — all without paying an annual fee if the card has no annual fee. Many people close cards unnecessarily when they could straightforward stop using them and achieve the same goal (getting the card out of their wallet or budget) without the score damage.
If the card has an annual fee and you do not want to pay it, call the issuer and ask if they can waive the fee or convert the card to a no-fee version. Many issuers will do this to keep the account open. If they will not, then closing the card may make financial sense despite the score impact — paying $95 a year to keep a card open is not worth it for most people. But if the card has no annual fee, there is no financial reason to close it, and keeping it open costs you nothing while protecting your score.
The Right Time to Close a Card If You Must
If you have decided to close a card, timing matters. Close it when your credit score is already strong (750 or higher) and your utilization ratio is low (below 10%). A strong score has more room to absorb a drop without falling into a lower range that affects your borrowing costs. Low utilization means the closure will not push you into a risky zone.
Avoid closing a card right before you plan to explore for a mortgage, car loan, or other credit. Lenders pull your credit score at the time of process, and a recent closure can lower your score enough to affect the interest rate you are offered or whether you are approved at all. If you are planning to borrow in the next 6 to 12 months, keep your cards open and focus on paying down balances instead. After you have closed a card and your score has recovered, you can explore for credit with less risk.
Frequently Asked Questions
Does closing a credit card hurt your score more than not using it?
Yes. Closing a card removes available credit and usually lowers your score by 10 to 50 points. Not using a card (keeping it open with a zero balance) preserves your available credit and does not lower your score at all. If the card has no annual fee, not using it is always better than closing it.
How much does closing a credit card lower your score?
The drop is usually 10 to 50 points, but it can be larger depending on the card's credit limit, your current utilization ratio, and how old the account is. Closing a high-limit card when you already carry high balances on other cards can cause a drop of 75 points or more. The exact impact varies by person and by credit bureau.
Will my score recover if I close a card?
Yes. Your score begins to recover within one or two billing cycles if you pay down balances on your remaining cards. Full recovery usually takes several months to a year. The closed account stays on your credit report for seven years but has less impact on your score as it ages.
Should I close a credit card with an annual fee?
Call the issuer first and ask them to waive the fee or convert the card to a no-fee version. Many will do this. If they refuse and you do not want to pay the fee, closing the card may make sense despite the score impact. But if you can afford the fee and plan to borrow soon, keeping the card open protects your score.
What if I close a card I have had for 10 years?
Closing a very old card usually causes more damage than closing a new one because it lowers your average account age. The impact is smaller if you have other old accounts, but it is still usually noticeable. If possible, keep the old card open with a zero balance to preserve both your available credit and your account history.