Closing a credit card usually hurts your credit score, but the damage is temporary and smaller than most people fear
When you close a credit card account, your credit score typically drops. The drop happens because closing an account changes two things that credit bureaus measure: your credit utilization ratio (how much of your available credit you are using) and your average age of accounts (how long your credit history is). Neither change is permanent, and neither is catastrophic. Most people see their score recover within a few months if they keep paying other bills on time.
The size of the hit depends on which card you close and what your credit profile looks like right now. Closing a card with a high credit limit hurts more than closing one with a low limit. Closing your oldest card hurts more than closing a newer one. Closing a card when you already carry high balances on other cards hurts more than closing one when your overall debt is low. But even in the worst case, the damage is usually between 10 and 50 points on a 300–850 scale, and it is not permanent.
Key Takeaways
- Closing a credit card raises your credit utilization ratio because your total available credit shrinks, even if your balances stay the same.
- Closing your oldest account lowers the average age of your credit history, which can reduce your score more than closing a newer card.
- The score drop is usually temporary — most people recover within three to six months if they keep paying bills on time and do not take on new debt.
- If you need to close a card, close a newer one with a low limit rather than your oldest card or your highest-limit card.
- Leaving a card open with a zero balance costs nothing and protects your score more than closing it.
Why closing a card hurts your credit utilization ratio
Credit utilization is the percentage of your total available credit that you are currently using. If you have three cards with $5,000 limits each ($15,000 total), and you carry $3,000 in balances, your utilization is 20 percent. Credit bureaus like to see utilization below 30 percent, and ideally below 10 percent.
When you close one of those $5,000 cards, your total available credit drops to $10,000. If your $3,000 in balances stays the same, your utilization jumps to 30 percent. You did not borrow any more money — your available credit just got smaller. The bureau's algorithm sees higher utilization and treats it as higher risk, so your score drops.
This is the main reason closing a card hurts. It is also the reason why the damage is usually not severe: utilization makes up about 30 percent of your credit score. A jump from 20 percent to 30 percent utilization is noticeable but not catastrophic.
How closing your oldest account damages your credit history length
The age of your credit accounts makes up about 15 percent of your credit score. Credit bureaus measure this two ways: the age of your oldest account and the average age of all your accounts. When you close your oldest account, both numbers drop.
If your oldest card is 15 years old and you close it, that 15-year history disappears from the calculation. If you have five other cards averaging 8 years old, your average age drops from 11 years to 8 years. The older your credit history, the more damage closing an old account does.
This damage is also temporary. The closed account stays on your credit report for seven years, so the age does not vanish when ready. But it stops being counted as an active account, and eventually it ages off the report entirely. In the meantime, your other accounts keep getting older, and the average age climbs back up.
When closing a card causes the most damage
The worst time to close a card is when you already carry high balances on other cards. If you have $8,000 in debt spread across two remaining cards with $10,000 total in limits, your utilization is 80 percent — well above the 30 percent threshold. Closing a third card with a $5,000 limit does not change your current balances, but it shrinks your available credit and makes your utilization even worse.
Closing your oldest card is also worse than closing a newer one. If you have been building credit for 20 years and your oldest card is 18 years old, closing it removes a major source of credit history length. Closing a card you opened last year has much less impact on your average age.
Closing a high-limit card hurts more than closing a low-limit card for the same reason: the bigger the limit, the more available credit you lose. A $10,000 limit card closing is worse than a $1,000 limit card closing.
How long the score drop lasts
Most people see their score recover within three to six months after closing a card, assuming they do not take on new debt or miss any payments. The recovery happens because credit utilization is calculated fresh each month — as soon as you close the card, the damage is done, but it does not get worse. Meanwhile, your other accounts keep aging, and your payment history keeps building.
If you pay down balances on your remaining cards, the recovery is faster. If you keep utilization high on your other cards, the recovery is slower. If you miss a payment or open new accounts, the recovery stalls.
The damage to your average account age takes longer to fully heal. The closed account stops counting as active, but it stays on your report for seven years. Your average age will not return to its pre-closure level until your other accounts age enough to compensate. For most people, this takes one to three years.
What to do if you want to close a card
If you have decided to close a card, close the right one. Close a newer card rather than your oldest. Close a low-limit card rather than your highest-limit card. Close a card you do not use rather than one you use regularly. If you have a choice between closing a card with a $500 limit that you opened two years ago and closing a card with a $15,000 limit that you opened 15 years ago, close the first one.
Before you close the card, pay off any balance on it. Closing a card with a balance does not hurt your score any more than closing one with a zero balance, but it is simpler and cleaner. Call the card issuer, confirm the balance is zero, and ask them to close the account. Get a confirmation number. Do not just stop using the card and assume it will close on its own — some issuers keep accounts open indefinitely.
After you close the card, keep an eye on your credit report for the next few months. You can check your report for free once per year at annualcreditreport.com. Make sure the closed account is reported correctly and that no errors appear.
Why keeping a card open is usually better than closing it
If you are closing a card because you do not use it, consider keeping it open instead. An unused card with a zero balance costs you nothing — there is no annual fee (or you can call and ask the issuer to waive it), and it does not hurt your score. It actually helps your score by keeping your available credit high and your utilization low.
The only reason to close a card is if it has an annual fee you cannot get waived, if the issuer is closing it for you, or if you are trying to reduce the temptation to overspend. If none of those explore, leaving it open is the safer choice for your credit.
Frequently Asked Questions
How much will my credit score drop if I close a card?
The drop varies depending on which card you close and your current credit profile. Closing a newer, low-limit card might drop your score 5 to 15 points. Closing your oldest card or your highest-limit card might drop it 20 to 50 points. These are rough ranges, not guarantees — the actual impact depends on your specific situation.
Should I close a card before explore for a mortgage or car loan?
No. Close a card after you have finished borrowing, not before. Closing a card right before a major loan process lowers your score and raises your utilization ratio, both of which make lenders less likely to approve you or offer you good rates. Wait until after the loan closes.
Will closing a card remove it from my credit report?
No. A closed account stays on your credit report for seven years. It stops being counted as an active account, but it still shows up in your history. This is actually good — the account's age continues to help your credit history length even after it is closed.
Can I reopen a card I closed?
Sometimes. If you closed the card recently, the issuer may reopen it for you. If it has been more than a few months, the issuer may treat a reopen as a new account, which would reset the account age and hurt your score. Call the issuer and ask before you count on reopening an old card.
Does closing a card affect my ability to get new credit?
Closing a card can make it slightly harder to get approved for new credit in the short term because your score drops and your utilization rises. But the effect is temporary. Within a few months, your score recovers, and lenders see no lasting damage. Do not close a card right before you plan to borrow.