The best move depends on whether you want to keep the account open

When you stop using a credit card, you have three real options: close the account, keep it open and inactive, or keep it open and use it occasionally. Each one affects your credit score differently, and the right choice depends on your credit history and how you manage debt overall.

Closing the account immediately is the move most people assume they should make, but it often hurts your credit score more than keeping the card open does. Keeping an old card open costs you nothing if there is no annual fee, and it can actually help your score by lowering your credit utilization ratio — the percentage of your available credit you are using at any given time.

The worst outcome is letting the card sit unused for years and then discovering the issuer closed it for inactivity, or that fraudsters opened charges on it because you stopped monitoring it. A few minutes of planning now prevents both.

Key Takeaways

  • Closing a credit card account lowers your available credit and can drop your score by 10 to 50 points, even if you pay off the balance first.
  • Keeping an old card open with no annual fee costs nothing and helps your credit utilization ratio, which makes up 30 percent of your credit score.
  • If you close the account, the card issuer will report the closure to credit bureaus, and the impact on your score is permanent — you cannot undo it by reopening the account later.
  • Set a calendar reminder to use the card once every six months with a small purchase, or contact the issuer to ask about inactivity policies before the account closes on its own.
  • If the card has an annual fee and you are not using the rewards, call the issuer and ask to downgrade to a no-fee version of the same card rather than closing it.

Why closing the account often hurts your credit score

Your credit score is built from five factors: payment history (35 percent), amounts owed (30 percent), length of credit history (15 percent), credit mix (10 percent), and new credit inquiries (10 percent). Closing a card affects three of these.

The most immediate hit comes from your credit utilization ratio. If you have two cards with $5,000 limits each and you carry a $2,000 balance on one, your utilization is 20 percent ($2,000 divided by $10,000 total available credit). If you close the unused card, your available credit drops to $5,000, and your utilization jumps to 40 percent ($2,000 divided by $5,000). That single change can lower your score by 10 to 50 points, depending on how close you already are to maxing out your cards.

Closing an old account also shortens your average age of accounts, which makes up 15 percent of your score. If your oldest card is 12 years old and you close it, the average age of your remaining accounts drops. This matters less than utilization, but it is a real penalty.

The closure itself is reported to credit bureaus and stays on your report for up to 10 years. You cannot undo the damage by reopening the account later — the closure is permanent in the eyes of your credit history.

When keeping the card open makes financial sense

If the card has no annual fee, keeping it open is almost always the better choice. The only cost is the small risk that you forget about it and miss fraudulent charges, which is why monitoring matters.

Cards with annual fees are a different calculation. If you are paying $95 or $450 a year and not using the card or its rewards, closing it makes sense — the fee outweighs the credit score benefit. Before you close it, call the issuer and ask whether they offer a no-fee version of the same card. Many issuers will downgrade you to a basic card with no annual fee rather than lose you as a customer. You keep the account open, the credit history stays intact, and you pay nothing.

If you have multiple old cards and your credit score is already strong (above 750), closing one or two will have less impact than if your score is lower. The utilization ratio matters less when you have plenty of available credit to begin with. But even then, keeping a no-fee card open is the safer move.

How to keep an old card active without using it regularly

The simplest approach is to use the card once every six months for a small purchase — a coffee, a gas fill-up, something you would buy anyway. Pay it off immediately. This keeps the account active in the issuer's system and prevents them from closing it for inactivity.

Set a phone calendar reminder for six months from now. When it pops up, buy something small on the card and pay the balance the next day. You are not carrying debt, you are not paying interest, and you are keeping the account alive.

If you want to be more hands-off, call the card issuer and ask about their inactivity policy. Some issuers close accounts after 12 months of no activity; others wait longer. Knowing the timeline lets you plan around it. You can also ask the issuer to flag your account so they contact you before closing it, though not all will do this.

Another option is to set up a small recurring charge on the card — a subscription you already pay for, like a streaming service or a magazine. Charge it to the old card, set up autopay from your bank account, and forget about it. The card stays active, you are not adding debt, and the charge is something you were going to pay anyway.

What to do if you decide to close the account

If you have decided that closing is the right move — because the card has a high annual fee you cannot downgrade away from, or because you simply do not want to manage it — do it in the right order to minimize the damage.

First, pay off the entire balance. Do not close a card with a balance on it. The issuer will report the closure to credit bureaus, and carrying a balance at the moment of closure can hurt your score more than closing an empty account.

Second, call the card issuer directly. Do not close the account through the website or app if you can avoid it. A phone call creates a record, and the representative can confirm the closure and answer questions about your final statement. Ask them to confirm that the account will be reported as "closed by consumer" rather than "closed by issuer" — this distinction matters to credit scoring models.

Third, wait for your final statement and make sure there are no unexpected charges. Then monitor your credit report for the next few months to confirm the closure was reported correctly. You can check your credit report free once a year at annualcreditreport.com, which is the official site run by the three major credit bureaus (Equifax, Experian, and TransUnion).

Protecting an old card from fraud while it sits unused

An old card you are not using is a target for fraud because you are not checking the statement regularly. If a fraudster gets the number, they can charge thousands before you notice.

The easiest protection is to check the account online once a month, even if you are not using the card. Log in, look at the transaction history, and confirm there is nothing you did not authorize. This takes two minutes and catches fraud early.

You can also request a new card number from the issuer without closing the account. This invalidates the old number if it has been compromised, and you keep the account and its credit history intact. Call the issuer and ask for a replacement card.

If you are worried about the card being stolen from your home or wallet, you can ask the issuer to remove the card from your wallet and keep the account open. Some issuers will do this; others will not. It is worth asking.

How to handle a card the issuer closed for inactivity

If you discover that an issuer closed your account because you did not use it, the damage is already done — the closure is reported to credit bureaus and will affect your score. But you have one option: call the issuer and ask them to reopen the account.

Some issuers will reopen an account within a short window (usually 30 to 90 days) if you request it. The closure may still be reported to credit bureaus, but reopening it shows activity and can help your case if you are disputing the impact on your score.

If the issuer will not reopen it, focus on the accounts you still have open. Keep those active, keep your utilization low, and let the closed account age off your report over time. A closed account stops affecting your score after about seven years, though it may still appear on your report.

Frequently Asked Questions

Will closing a credit card hurt my score?

Yes, usually by 10 to 50 points, depending on your current score and how much available credit you have. The main reason is that closing the card lowers your available credit, which raises your utilization ratio. The impact is smaller if you have a high credit score and multiple other cards open.

How often do I need to use an old card to keep it open?

Most issuers close accounts after 12 months of no activity, though some wait longer. Using the card once every six months is a safe habit that keeps the account active without requiring you to carry a balance or pay interest.

Can I reopen a card after I close it?

You can ask the issuer to reopen it, but they are not required to say yes. Even if they do, the closure is already reported to credit bureaus and will remain on your credit report. It is better to keep the account open from the start.

What if the card has an annual fee I do not want to pay?

Call the issuer and ask to downgrade to a no-fee version of the same card. Many issuers offer basic versions without annual fees. If they will not downgrade, then closing the account makes sense because the fee outweighs the credit score benefit of keeping it open.

Should I destroy the old card if I am keeping the account open?

You can cut it up or shred it to prevent accidental use or theft, but keep the account itself open. The physical card does not matter — the account is what affects your credit score. You can always request a replacement card if you decide to use the account again.