What Happens to Your Credit Score When You Close an Old Card
Why closing a card can affect your credit, when it can still make sense and some alternatives to consider.
In this guide
Key takeaways
- Closing a card reduces your total available credit, which can raise your credit use.
- Higher credit use can lower your score, especially if you carry balances.
- A closed account in good standing usually stays on your credit report for years.
- If an annual fee is the issue, ask about switching to a no-fee card instead.
Introduction
An old credit card you no longer use can feel like clutter. Closing it seems tidy. But closing a card can affect your credit score in ways many people don't expect, and sometimes keeping it open is the better choice.
Here's what happens, and how to decide.
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Your credit use can go up
Credit scoring models look at how much of your available card credit you're using, often called credit utilization. Lower is generally better.
Example: you owe $2,000 across your cards and have $10,000 in total credit limits. That's 20% utilization. Close a card with a $4,000 limit and your total drops to $6,000. The same $2,000 balance is now about 33% of your available credit.
If you pay your cards off in full every month and your statements show low balances, the effect may be small. If you carry balances, it can matter more.
Your credit history doesn't disappear straight away
Many people worry that closing an old card wipes out years of history. In practice, a closed account in good standing usually remains on your credit report for years, and keeps contributing to the age of your accounts while it's there. Over the long term, though, it will eventually drop off.
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Not now, show me another guide →When closing a card can make sense
- It has an annual fee you don't want to pay, and the card company won't switch you to a no-fee card.
- It tempts you to overspend. If having the card leads to debt, closing it may be the right call.
- It's a joint account after a separation, and you want to stop being responsible for new charges.
- You're worried about fraud on a card you never check.
Alternatives to closing
- Ask for a product change. Many card companies will switch you to a no-fee card from the same company, so the account stays open.
- Use it for one small bill. Put a small recurring charge on it, like a streaming subscription, and set up autopay so it's paid in full each month. This can stop the card company closing it for inactivity.
- Lock it away. Remove the card from your wallet and phone wallet if you don't want to be tempted.
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If you do close it
- Pay the balance to zero first.
- Redeem any rewards points, because they may be lost when the account closes.
- Move any automatic payments to another card.
- Call the card company to close it, then ask for written confirmation.
- Check your credit report a month or two later to make sure it shows as "closed by consumer".
A quick decision checklist
- Does the card have an annual fee you'd rather not pay?
- Will the card company switch you to a no-fee version instead?
- Do you carry balances on other cards that would push your credit use up?
- Are you planning to apply for a mortgage, car loan or other credit soon?
- Is it one of your oldest accounts?
If you're about to apply for a big loan, many people wait until after the loan closes before making changes to their credit cards.
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Conclusion
Closing an old card isn't always bad, but it can raise your credit use and slowly shorten your history. If the card is costing you money or causing debt, closing it may be right. If not, a no-fee product change or a small autopaid bill can keep it working for you.
Common questions
Will closing a credit card hurt my score?
It can, mainly by raising your credit utilization. The effect depends on your balances and other accounts.
Can a card company close my card for not using it?
Yes. Some issuers close inactive accounts. Using the card occasionally for a small charge can help prevent this.
How can I check my credit reports?
You can get your credit reports at no cost from AnnualCreditReport.com, the official site set up for this under federal law.
Sources and further reading
This guide is general information, not financial advice. Rates, fees and terms vary by provider and can change. Always check the provider's own terms, and consider speaking to a qualified financial professional about your situation.
