Closing a credit card usually lowers your credit score, at least temporarily, because it reduces the total credit available to you and can raise the percentage of credit you're actively using.
The damage is not permanent. Your score will recover over time as you continue to pay other accounts on schedule. But the drop happens immediately, and how much you lose depends on how much credit you're closing and how much you already owe on your other cards.
The two main reasons your score falls are connected to how credit bureaus measure risk. First, your credit utilization ratio — the percentage of your total available credit that you're currently using — goes up when you remove a card from the mix. Second, closing an account can shorten your average age of accounts, which also factors into your score. Both of these changes signal slightly higher risk to lenders, even though you haven't missed a payment.
Key Takeaways
- Closing a card reduces your total available credit, which raises your utilization ratio and typically lowers your score by 10 to 50 points in the short term.
- The impact is smaller if you close a card with a high balance and larger if you close a card you weren't using, because the unused credit was helping your ratio.
- Your score will recover within a few months to a year if you keep other accounts in good standing and don't take on new debt.
- Closing a card does not erase its history; the account remains on your credit report for seven to ten years, so the damage to your score is temporary, not permanent.
- If you're closing a card to avoid fees or because you no longer want it, the score impact is usually worth it, but closing multiple cards at once multiplies the damage.
Why Closing a Card Raises Your Credit Utilization Ratio
Your utilization ratio is the amount you owe divided by the amount of credit available to you. If you have three cards with $5,000 limits each and you owe $3,000 total, your utilization is 20 percent ($3,000 ÷ $15,000). If you close one of those cards, your available credit drops to $10,000, and your utilization jumps to 30 percent ($3,000 ÷ $10,000) — even though you haven't charged anything new.
Credit bureaus treat higher utilization as a sign of financial stress. A person using 30 percent of available credit is statistically less likely to default than someone using 80 percent, so the score reflects that difference. Closing a card makes you look riskier on paper, even if your actual behavior hasn't changed.
The impact is largest when you close a card with a high limit that you weren't carrying a balance on. If you close a card with a $10,000 limit and zero balance, you lose $10,000 in available credit immediately. If you close a card with a $2,000 limit and a $1,500 balance, you lose only $500 in unused credit, so the utilization ratio doesn't jump as far.
How Closing a Card Affects Your Account Age and History
Credit bureaus also consider the average age of your accounts — how long you've had credit on average. Closing an older card lowers this average more than closing a newer one. A person who closes a card opened fifteen years ago loses more points than someone who closes a card opened two years ago.
However, closing a card does not erase it from your credit report. The account stays on your report for seven to ten years after you close it, depending on your state and whether the account is in good standing. During that time, it still counts toward your account history and your average age, though it no longer contributes to your available credit. This is why the damage is temporary: as time passes and you open new accounts, the closed card's impact on your average age shrinks.
If you're closing a card because you want to reduce the number of accounts you manage, the score hit is usually small. If you're closing your oldest card because you want to simplify your wallet, the hit is larger, but still recoverable within months.
How Much Your Score Will Drop
Most people see a drop of 10 to 50 points when they close a single card. The exact number depends on your current score, how much credit you're closing, and how much you owe on other cards.
If your score is already high (750 or above) and you have multiple cards with low balances, closing one card might drop your score by 10 to 20 points. If your score is lower (650 or below) or you're already carrying high balances on your remaining cards, the drop can be 40 to 50 points or more.
Closing multiple cards at once multiplies the damage. Closing two cards in the same month can drop your score by 50 to 100 points. This is why it's better to close cards one at a time, several months apart, if you have several you want to get rid of.
How Long It Takes Your Score to Recover
Your score will begin to recover as soon as you close the card, but the recovery is gradual. Most people see their score return to its previous level within three to six months if they keep other accounts in good standing and don't take on new debt.
The recovery is faster if you actively lower your utilization ratio on your remaining cards. If you close a card and then pay down the balance on another card, your utilization drops and your score rises faster. Conversely, if you close a card and then charge up your other cards, your score will stay depressed longer.
After about a year, the closed account's impact on your score becomes negligible. The account is still on your report, but it's no longer actively dragging down your score because it's no longer part of your available credit calculation.
When Closing a Card Is Worth the Score Hit
A temporary drop in your credit score is often the right trade-off. If a card charges an annual fee you don't want to pay, closing it saves you money even if your score drops 20 points. If you're carrying a balance on a card with a high interest rate and you want to stop using it, closing it prevents you from running up the balance further.
Closing a card is less worth it if you're about to apply for a mortgage, car loan, or other credit that depends on your score. Lenders pull your score at the time you apply, so closing a card in the month before you apply will lower the score they see. If you're not planning to borrow money in the next six months, the timing doesn't matter much.
Closing a card is also less worth it if it's your oldest account or your only account with a high limit. In those cases, the score damage is larger and takes longer to recover from. If you have other older cards or cards with higher limits, closing a newer or lower-limit card instead will have less impact.
What Happens to the Account After You Close It
When you close a card, the issuer marks it as closed on your credit report. The account stops appearing in your available credit calculation, but it remains on your report as a closed account. You can no longer use the card to charge purchases, and you can no longer earn rewards or cash back on it.
If you have a balance on the card when you close it, you still owe that balance and must continue making payments. Closing the card does not erase the debt. Some people close a card and then pay off the remaining balance over time; others pay it off first and then close the card. Either way, the account stays on your report.
If the card was in good standing when you closed it (no missed payments, no charge-offs), it will remain on your report for ten years. If it was delinquent or charged off, it may fall off sooner, depending on your state's laws. During those years, the closed account continues to show your payment history, which is why closing a card with a long record of on-time payments is less damaging than closing a card with a spotty history.
Strategies to Minimize the Score Impact
If you know you want to close a card, you can reduce the damage by paying down balances on your other cards first. Lower your utilization ratio before you close the card, and the ratio won't jump as far when you remove the card from your available credit. If you can get your utilization below 10 percent on your remaining cards, closing a card will have almost no impact on your score.
You can also space out closures. If you have three cards you want to close, close one, wait three months, close another, and wait three months before closing the third. This spreads the score damage across multiple months and gives your score time to recover between hits.
Another option is to keep the card open but stop using it. You don't have to close a card to stop carrying a balance on it. If a card has no annual fee, you can simply leave it open with a zero balance. It will continue to help your available credit and your account age without costing you anything. This is the lowest-impact option if you're trying to reduce the number of cards you actively use.
Frequently Asked Questions
Will closing a credit card hurt my credit score permanently?
No. Closing a card lowers your score temporarily, usually for three to six months, but the damage is not permanent. The account remains on your credit report for seven to ten years, so it continues to show your payment history, but it stops actively dragging down your score after about a year.
Should I pay off the balance before closing a card?
Yes, if you can. Closing a card with a zero balance has less impact on your utilization ratio than closing a card with a balance. If you have to carry a balance, pay it down as much as possible before closing, and the score hit will be smaller.
Does closing a card remove it from my credit report?
No. The closed account remains on your report for seven to ten years. It no longer contributes to your available credit, but it still shows your payment history and still counts toward your account age, so it continues to affect your score, just less directly.
What if I close a card and then need to borrow money?
Your score will be lower for a few months, which may affect the interest rate you're offered on a loan or credit card. If you can wait six months after closing a card to apply for credit, your score will have mostly recovered. If you need to borrow sooner, closing the card right before you apply will cost you more in interest.
Is it better to close a card or just stop using it?
Stopping using it is better for your score. If the card has no annual fee, leaving it open with a zero balance costs you nothing and preserves your available credit and account age. Close the card only if it charges an annual fee or if you want to simplify your accounts.