Closing a card can hurt your score, mainly by removing its limit and raising your utilization. The account's history stays on your report for up to 10 years, but it eventually drops off. Keeping no-fee cards open and active is usually better.
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It seems like closing a credit card you don't use should be harmless, or even good for your credit. Fewer cards, less temptation, less to manage. But in many cases, closing a credit card can lower your credit score, sometimes noticeably.
Whether it hurts, and how much, depends on your balances, your other cards and the age of the account. Here's how it works, a few real-number examples, and what to do instead if you want to keep your score healthy.
The short answer
Closing a credit card can hurt your credit score, mainly because you lose that card's credit limit, which can raise your credit utilization ratio. It usually doesn't hurt your credit history right away, because closed accounts in good standing stay on your credit report for up to 10 years.
The same is true whether you close the card or your issuer closes it for inactivity. To your credit report, a closed account is a closed account.
A quick refresher on how scores are calculated
According to myFICO, FICO® Scores are based on five categories:
- Payment history: 35%
- Amounts owed: 30% (this includes utilization)
- Length of credit history: 15%
- New credit: 10%
- Credit mix: 10%
Closing a card mostly affects the second and third categories. (For a full breakdown, see What Hurts Your Credit Score?)
Effect #1: your utilization can jump
Utilization is your total card balances divided by your total credit limits. When a card closes, its limit disappears from that equation, but your balances stay the same.
Example: closing a card with a $0 balance
| Before closing | After closing | |
|---|---|---|
| Card A limit | $4,000 | $4,000 |
| Card B limit (unused) | $6,000 | Closed |
| Total limit | $10,000 | $4,000 |
| Balances | $1,200 | $1,200 |
| Utilization | 12% | 30% |
By closing a card you weren't even using, utilization more than doubled. Experts commonly recommend keeping utilization below 30%, and Experian notes that below 10% is best for scores. In this example, one closure moved this person from "healthy" to "borderline."
If you carry no balances at all, the utilization effect may be minimal. But most people carry at least some balance at statement time, even if they pay in full.
Effect #2: your credit history eventually gets shorter
Here's where people often get confused. Closing a card doesn't erase its history immediately. A closed account in good standing remains on your credit report for up to 10 years and continues to count toward the length of your history while it's there.
But after it drops off, your average account age can fall, especially if the closed card was one of your oldest. If you close your oldest card today, the effect may not show up for years, but it does arrive eventually. That's why it's usually best to keep your oldest accounts open and active.
Effect #3: you stop adding positive history
An open card that's used and paid on time keeps adding positive months to your payment history, the single most important scoring factor. A closed card stops contributing new on-time payments.
How much does closing a credit card hurt your score?
There's no fixed number. The impact depends on:
- The card's limit compared to your total available credit.
- Your balances on other cards.
- How many other cards you have.
- The card's age compared to your other accounts.
Someone with ten cards and no balances might barely notice. Someone with two cards and steady balances could see a meaningful drop. If you're planning a big application like a mortgage or auto loan, avoid closing cards beforehand.
When closing a card might make sense
There are times when closing a card is reasonable, such as an annual fee you can't justify, a card that tempts you to overspend, or a joint account after a separation. Before you do, consider alternatives. We walk through the decision in Should You Close a Credit Card You Don't Use?
Don't let the bank close it for you
Many people never actually decide to close a card. The issuer does it for them because the card sat unused. The credit effects are exactly the same, and you usually get no say and no warning. Read more in Credit Card Closed Due to Inactivity?
The easiest protection is regular, automatic activity. Credicated places a tiny charge on each card on your schedule: Platinum at $0.99 a month, Gold at $1.25 every 3 months, or Silver at $1.25 a year. With autopay paying it off, every card stays open, active and adding on-time payments, which may help your score instead of hurting it.
Frequently asked questions
Does closing a credit card with a zero balance hurt your credit?
It can. Even with a $0 balance on that card, losing its limit raises your utilization if you carry balances on other cards.
How long does a closed account stay on your credit report?
An account closed in good standing can stay for up to 10 years. Accounts closed with late payments generally remain for seven years from the original delinquency.
Is it better to close a card or leave it open?
For most people, leaving a no-fee card open and active is better for their credit. Keep it active with small charges so the issuer doesn't close it.
Does a card closed by the issuer hurt more than one I close?
The scoring effects are generally the same. Lost limit and future history aging work the same way regardless of who closed it.
This article is for general educational purposes and isn't financial advice. Credit scoring models and individual results vary.
By closing a card you weren't even using, utilization more than doubled.