Cancelling a credit card will lower your credit score, usually by 10 to 50 points, though the damage depends on how much credit you're using and how long you've held the card.
When you close a card, two things happen to your credit profile. First, your total available credit shrinks — if you had a $5,000 limit and you're carrying a $2,000 balance elsewhere, your credit utilization jumps from 40% to 67%. Credit bureaus treat higher utilization as riskier, and your score drops. Second, the card's payment history stays on your report, but closing it removes an active account, which can lower the average age of your accounts if it was one of your older cards.
The hit is temporary. Most people see their score recover within three to six months if they keep making on-time payments and don't open new cards. But if you're planning to explore for a mortgage, car loan, or another credit product soon, cancelling now could cost you a better interest rate.
Key Takeaways
- Closing a card reduces your available credit, which raises your credit utilization ratio and typically lowers your score by 10 to 50 points.
- The damage is usually temporary — most scores recover within three to six months if you keep paying other accounts on time.
- If you're planning to borrow money in the next few months, wait to close the card until after you've locked in your rate.
- Keeping the card open but unused preserves your available credit and helps your score more than closing it, even if you never use it again.
- The card's payment history remains on your credit report for seven to ten years after you close it, so the account doesn't disappear entirely.
Why your credit score drops when you close a card
Your credit score is built on five factors: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%). Closing a card affects three of these.
Credit utilization is the most when ready hit. If you have two cards with $5,000 limits each and you're carrying a $3,000 balance on one, you're using 30% of your available credit. Close the unused card and your available credit drops to $5,000 — now you're using 60% of what's available. Credit bureaus see this as a sign you're more dependent on borrowed money, and your score falls.
Account age matters if the card you're closing is one of your oldest. Credit bureaus reward you for a long history of responsible borrowing. If you close a 15-year-old card and your next-oldest account is 5 years old, your average account age drops, and your score takes another hit.
Account mix is a smaller factor, but closing a card can reduce it. If you have three credit cards and one car loan, closing a card leaves you with two cards and one loan — less variety in the types of credit you manage.
How long the damage lasts
The score drop is not permanent. Most people see their score recover within three to six months, provided they keep making on-time payments on their remaining accounts and don't run up balances on other cards.
The recovery timeline depends on how much damage was done. If you closed a card with a small limit and you're using only 20% of your remaining credit, you might see your score bounce back in two to three months. If you closed a card with a large limit and your utilization jumped to 80%, recovery could take six months or longer.
The closed card's payment history stays on your credit report for seven to ten years, so the account doesn't vanish. This is actually helpful — the positive payment history continues to support your score even after the account is closed.
When to close a card and when to keep it open
Close the card if you're carrying a balance on it and paying interest, or if the card has an annual fee you don't want to pay. The interest or fee costs more than the score damage will.
Keep the card open if you're not using it but it has no annual fee. The available credit helps your utilization ratio, and the account history helps your score. You don't have to use the card — just leave it open. Some people make one small purchase per year (a coffee, a gas fill-up) and pay it off when ready, just to keep the account active.
If you're planning to explore for a mortgage, car loan, or another large credit product within the next three to six months, wait to close the card until after you've been approved and locked in your rate. A lower credit score at the time of process could raise the interest rate you're offered.
Steps to close a credit card with minimal damage
Before you call, pay off any balance on the card. You can still close a card with a balance, but you'll continue to receive statements and pay interest until it's gone. Paying it off first means you can close it cleanly.
Call the customer service number on the back of the card. Tell them you want to close the account. They may ask why or offer you a lower interest rate or annual fee waiver to keep it open — this is normal. If you're set on closing it, say so clearly.
Ask the representative to confirm the account is closed and to note in your file that you requested the closure. Request written confirmation by mail or email. This creates a record in case there's a dispute later.
Check your credit report two to three weeks after closure to confirm the account shows as closed. You can get a free report from each of the three bureaus (Equifax, Experian, TransUnion) once per year at annualcreditreport.com.
What happens to rewards points and pending transactions
Redeem your rewards points before you close the card. Most issuers will let you redeem them for a few weeks after closure, but policies vary. Don't assume they'll be there — use them first.
Any pending transactions (charges that haven't posted yet) will still post to the closed account. The card won't process new charges, but old ones will go through. Wait until you're sure all your regular payments and subscriptions have cleared before closing.
If you have autopay set up on the card for any bills, change those to a different payment method before you close it. A failed payment because the card is closed can hurt your score more than closing the card itself.
Alternatives to closing a card
If your main concern is an annual fee, call and ask for a fee waiver. Many issuers will waive the fee once or twice if you've been a customer for a while. If they won't, ask if they can downgrade you to a no-fee version of the same card — this keeps the account open and the history intact.
If you're worried about fraud or identity theft, you don't have to close the card. You can request a new card number and expiration date, and the account stays open under the new number. The old number straightforward stops working.
If you're trying to reduce temptation to overspend, cut up the physical card or leave it at home. Closing the account is permanent; keeping it open but unused gives you more options later.
Frequently Asked Questions
Will closing a credit card hurt my credit score?
Yes, closing a card typically lowers your score by 10 to 50 points because it reduces your available credit and raises your utilization ratio. The damage is usually temporary — most scores recover within three to six months if you keep paying other accounts on time.
Can I reopen a credit card after I close it?
It depends on the issuer and how long ago you closed it. Some issuers will reopen an account within 30 to 60 days if you call and ask. After that, you'll usually have to explore for a new card. A new process triggers a hard inquiry, which lowers your score slightly.
What if I close a card and my credit score doesn't recover?
If your score hasn't recovered after six months, check your credit report for errors or late payments on other accounts. Late payments hurt your score far more than closing a card. If you find errors, dispute them with the bureau. If your other accounts are current, your score should continue to climb over time.
Does it matter which card I close if I have multiple cards?
Yes. Close a newer card rather than an older one — account age matters to your score. Close a card with a small limit rather than a large one, because closing a large limit raises your utilization more. If one card has an annual fee and another doesn't, close the one with the fee.
Should I close a card before explore for a mortgage?
No. Close it after you've been approved and locked in your rate. Closing a card lowers your score, and lenders check your score again before closing the loan. A lower score at that point could cost you a higher interest rate or cause the lender to back out entirely.