Closing a credit card usually hurts your credit score, but the damage is temporary and the size depends on which card you close and what your other accounts look like.
When you close a card, two things happen to your credit report immediately. First, your total available credit shrinks — if you had a $5,000 limit and closed that card, you now have $5,000 less credit available across all your accounts. Second, the card stops showing as an active account, which changes how credit bureaus see your credit mix (the variety of different types of credit you hold). Both of these changes can lower your score.
The hit is usually not permanent. Your score typically recovers within a few months as long as you keep paying other accounts on time. But the recovery is slower if you close a card with a high limit, if it was your oldest account, or if you carry balances on your remaining cards.
Key Takeaways
- Closing a card reduces your total available credit, which can raise your credit utilization ratio and lower your score.
- The damage is usually temporary — most people see their score recover within three to six months of closing a card.
- Closing your oldest card or only card hurts more than closing a newer one or a card you have duplicates of.
- If you carry a balance on other cards, closing a card makes the damage worse because your utilization ratio climbs higher.
- Keeping the card open but unused is usually better for your score than closing it, as long as there is no annual fee.
How closing a card affects your credit utilization
Credit utilization is the percentage of your total available credit that you are currently using. If you have $10,000 in total credit limits across all your cards and you owe $2,000, your utilization is 20 percent. Credit bureaus use this number to predict whether you are overextended, and lower utilization is better for your score.
When you close a card, your total available credit drops. If you close a $5,000 card and owe $2,000 on your remaining accounts, your utilization jumps from 20 percent ($2,000 ÷ $10,000) to 29 percent ($2,000 ÷ $7,000). That jump can lower your score by 10 to 50 points, depending on how high your utilization was to begin with. The higher your utilization before closing the card, the bigger the damage.
This is why closing a card hurts less if you have no balance on any of your cards. If you owe nothing, closing a card does not change your utilization ratio at all — it stays at zero percent.
Why closing your oldest card does more damage
Credit bureaus track length of credit history, which is how long your oldest account has been open. This factor makes up about 15 percent of your credit score. When you close your oldest card, the age of your credit history can drop significantly, especially if that card was much older than your other accounts.
The damage here is also temporary. Once you close the card, it stays on your credit report for seven years. During those seven years, the bureaus still count it toward your length of credit history, so your score does not drop as much as it would if the account simply vanished. After seven years, the closed account falls off your report and your average account age gets younger — but that is years away.
If you have other accounts that are almost as old as the card you are closing, the damage is minimal. If this card is significantly older than everything else you have, closing it will hurt more.
The difference between closing a card and leaving it open unused
If the card has no annual fee, leaving it open and unused is almost always better for your score than closing it. An open unused card still counts toward your available credit, so it keeps your utilization ratio lower. It also keeps that account age on your report, which helps your length of credit history.
The only real downside to leaving a card open is the small risk that the issuer will close it for inactivity — some card companies close accounts that have not been used in 12 to 24 months. You can prevent this by using the card occasionally, even just for a small purchase you pay off immediately. Some people set up a small recurring charge (like a streaming service) and pay it off automatically each month.
If the card has an annual fee and you do not use it, closing it makes sense. The fee costs you money and the score damage is usually worth avoiding that cost.
When closing a card might be the right choice anyway
Even though closing a card can lower your score, there are situations where it makes sense to do it. If you are paying an annual fee for a card you do not use, closing it saves you money. If you have many cards and managing them is stressful or confusing, closing some of them can simplify your finances — and the mental relief might be worth a temporary score dip.
If you are closing a card because you are worried about overspending or carrying balances, that is also a reasonable choice. A lower score for a few months is better than years of high-interest debt. Just know that closing the card alone does not solve the spending problem — you still have to change the behavior.
If you are closing a card right before applying for a mortgage or auto loan, that is worth reconsidering. Lenders pull your credit report a few days before closing, so a recent card closure will show up and lower your score at the exact moment it matters most. If you can wait until after the loan closes, that is better.
How much your score will drop and how long recovery takes
The size of the score drop depends on your starting score, how much available credit you are losing, and whether you carry balances. Someone with a 750 score who closes a $2,000 card with no balance might see a 10 to 20 point drop. Someone with a 650 score who closes a $10,000 card while carrying balances on other cards might see a 50 to 100 point drop.
Recovery usually takes three to six months if you keep paying all your other accounts on time and do not apply for new credit. If you have a high utilization ratio on your remaining cards, recovery takes longer because that ratio stays high until you pay down the balances.
The closed card itself stays on your report for seven years, so it continues to help your length of credit history during that time. After seven years, it falls off and your score may dip again — but that is far enough away that it should not influence your decision now.
What to do before you close a card
Before you close a card, check whether it is your oldest account. If it is, consider keeping it open instead, especially if you have no annual fee. If you do decide to close it, do it when you are not about to apply for a loan or new credit.
If you carry balances on other cards, pay them down before closing the card. This keeps your utilization ratio from spiking. If you cannot pay them down, closing the card will hurt more, so weigh that cost against whatever benefit you are getting from closing it.
If the card has an annual fee and you want to close it, call the issuer first and ask whether they will waive the fee. Many issuers will waive it for a year or two if you ask, especially if you have been a customer for a long time. This gives you the benefit of keeping the card open without paying the fee.
Frequently Asked Questions
Will closing a credit card remove it from my credit report?
No. The closed card stays on your credit report for seven years. During that time, it still counts toward your length of credit history and your total account history, so it continues to help your score in those ways. After seven years, it falls off automatically.
Does closing a card hurt my score more if I just opened it?
Closing a newer card hurts less than closing an old one, because length of credit history is a smaller factor in your score. A newer card also has less impact on your average account age. The main damage from closing any card is the drop in available credit, which is the same whether the card is new or old.
What if I close a card and my score drops right before I apply for a mortgage?
Lenders see the closed account on your credit report and factor it into their decision. A recent closure can lower your score by 10 to 50 points at the exact moment it matters most. If you are planning to apply for a mortgage or auto loan within the next few months, wait to close the card until after the loan closes.
Can I reopen a card I already closed?
Some issuers will reopen a closed account if you ask within a short window, usually 30 to 60 days. Call the issuer and ask. If they reopen it, the account history stays on your report and your score recovers quickly. If they will not reopen it, the card stays closed but remains on your report for seven years.
Is it better to close a card or just stop using it?
Stopping using it is almost always better, as long as there is no annual fee. An open unused card helps your available credit and your length of credit history. The only reason to close it is if you are paying an annual fee or if you are worried the open account will tempt you to overspend.