The short answer: closing a card usually costs you more than keeping it open
Closing a credit card damages your credit score in two ways, and the damage lasts for years. First, it shrinks your total available credit, which makes your other balances look larger by comparison — even if you never use the card again. Second, closing an old account removes its payment history from your credit report, which weakens the age of your accounts overall. Both effects lower your score, sometimes by 10 to 50 points depending on how much credit you had and how old the card was.
The one time closing makes sense is when you are paying an annual fee you cannot avoid, or when keeping the card open creates a real risk — like a card linked to a joint account with someone you no longer trust. In almost every other situation, you are better off leaving the card open and unused.
Key Takeaways
- Closing a card reduces your available credit and can lower your score by 10 to 50 points, with the damage lasting several years.
- An old closed account stays on your report for up to seven years, but stops helping your score after it closes.
- If a card has no annual fee, the smartest move is to keep it open, use it once or twice a year, and pay the balance in full.
- Annual fees are the only common reason to close a card, but first ask the issuer to downgrade to a no-fee version of the same card.
- Closing multiple cards at once causes more damage than closing them one at a time over months or years.
How closing a card damages your credit score
Your credit score depends partly on your credit utilization ratio — the percentage of your total available credit that you are actually using. If you have three cards with $5,000 limits each ($15,000 total) and carry a $3,000 balance, your utilization is 20 percent. If you close one of those cards, your available credit drops to $10,000, and suddenly that same $3,000 balance looks like 30 percent utilization. The score drop happens immediately, even though you did not borrow any more money.
The second damage comes from account age. Credit bureaus track how long you have had each account open. Older accounts help your score more than new ones. When you close a card, especially an old one, you lose that benefit. The closed account stays on your report for up to seven years, but it stops counting toward your average account age after it closes.
A third, smaller factor is the number of open accounts itself. Lenders see more open accounts as a sign you can manage multiple relationships. Closing one reduces that count.
When the annual fee makes closing worth it
An annual fee is the clearest reason to close a card — but only after you have tried the easier option first. Call the issuer and ask whether they can downgrade your card to a no-fee version. Many issuers offer a basic card in the same family with no annual fee. You keep the account open, the account age stays on your report, and you stop paying.
If downgrading is not an option and the annual fee is substantial (usually $95 or more), closing may make sense. Calculate the damage: a $95 fee is worth closing if the score drop would cost you more in higher interest rates on a loan you are planning to take out soon. If you are not borrowing in the next year or two, the fee is probably cheaper than the score damage.
Do not close a card just because you are not using it. Unused cards with no annual fee cost you nothing and help your score by existing.
How to close a card with the least damage
If you have decided to close a card, timing and order matter. First, pay off the entire balance. Do not close a card while you owe money on it — that locks in a high utilization ratio on your report.
Second, close cards one at a time, months apart if you can. Closing multiple cards in a short period looks like financial distress to credit bureaus and causes a steeper score drop than closing them gradually.
Third, close older cards last. If you have to choose which card to close, close the newest one first. Keeping older accounts open protects your average account age longer.
To close the card, call the customer service number on the back and ask to close the account. Confirm that the balance is zero before you call. Ask the representative to note in your file that you requested the closure. Then follow up with a written request by mail or through your online account, keeping a copy for your records. This creates a paper trail in case there is a dispute later.
Why keeping a card open costs almost nothing
A card with no annual fee costs you nothing to keep open. You do not have to use it. You do not have to carry a balance. You can put it in a drawer and forget about it.
If you are worried about fraud or identity theft, use the card once or twice a year — buy a small item, pay it off immediately. This keeps the account active in the issuer's eyes and reduces the chance they will close it for inactivity. Some issuers do close accounts that have not been used in 12 to 24 months, though this is less common than it used to be.
The benefit of keeping the card open far outweighs the tiny risk. An old, unused card with no fee is one of the cheapest ways to improve your credit profile.
Closing a joint account or a card tied to someone else
If a card is in both your names or linked to someone else's account, closing it may be necessary for your financial safety. A joint account means both people are responsible for the debt, and both can make charges. If you are closing a joint account because of a divorce, separation, or broken trust, closing protects you from future charges you cannot control.
In this case, the score damage is worth the protection. Pay off the balance first, then close the account. If the other person refuses to pay their share, you may need to pay the full balance yourself to close it cleanly. This is expensive, but it stops them from running up more debt in your name.
What happens to your credit report after you close a card
A closed account stays on your credit report for up to seven years from the date you closed it. During that time, it still shows up when lenders pull your report, but it no longer helps your score the way an open account does.
After seven years, the closed account falls off your report entirely. At that point, the damage is done — the account is gone and cannot help you anymore. This is why closing old cards is particularly costly: you lose years of account history that could have been helping your score.
If you closed a card by mistake or want to reopen it, call the issuer within a few days. Some will reopen a recently closed account. If they will not, you can always open a new card with the same issuer or a different one, but a new card starts at zero account age.
Frequently Asked Questions
Will closing a credit card hurt my credit score?
Yes. Closing a card reduces your available credit and removes the account's payment history from your score calculation. Most people see a drop of 10 to 50 points, depending on how old the card was and how much credit you had. The damage lasts several years.
Should I close old credit cards I don't use anymore?
No, not if they have no annual fee. Old cards are valuable because they boost your average account age. Keeping them open costs nothing and helps your score. Use them once or twice a year to keep them active.
What if my credit card issuer closes my account for inactivity?
If an issuer closes your account, the damage is the same as if you closed it yourself — your score drops and the account falls off your report after seven years. To prevent this, use the card once or twice a year, even for a small purchase you pay off immediately.
Can I reopen a credit card I just closed?
Maybe. Call the issuer within a few days and ask. Some will reopen a recently closed account, especially if you had a good payment history. If they will not, you have lost the account age, but you can open a new card with them or another issuer.
Is it better to close a card or let it sit unused?
Let it sit unused. An unused card with no annual fee helps your credit score by existing. Closing it damages your score and removes years of account history. The only reason to close is an annual fee you cannot avoid or a safety concern with a joint account.