Does Closing Your Credit Card Hurt Your Credit Score?

The short answer: yes, closing a credit card can hurt your score — but not always, and not for everyone. The key is understanding why before you make a move.

Why This Question Matters for Your Financial Future

Credit scores aren’t just numbers; they’re the key that unlocks big financial milestones, like buying a home, getting approved for a loan, or even landing an apartment.

A small dip in your score can mean thousands more in interest over the life of a mortgage. That’s why knowing how closing a card affects your credit can help you make smarter, more strategic money moves.

There are three main ways closing a credit card can impact your credit.

Impact #1: Credit Utilization Ratio Increases

Your credit utilization ratio is the amount you owe divided by your total available credit. It’s a big deal, about 30% of your FICO score.

Let’s say you have two cards with $10,000 total in credit limits, and you’re carrying a $2,000 balance. Your utilization is 20%. If you close one card with a $5,000 limit, suddenly your utilization jumps to 40%.

Why it matters: A higher utilization ratio signals more risk to lenders. Most experts recommend keeping it below 30%, ideally under 10%.

Impact #2: Average Age of Credit History Decreases

The age of your credit accounts makes up about 15% of your FICO score. The longer you’ve had your accounts, the better.

When you close a card, it stays on your credit report for up to 10 years (good news), but once it falls off, your average account age can shrink, especially if it was your oldest line of credit.

Pro tip: Think twice before closing your very first card. That history is gold.

Impact #3: Reduced Credit Mix (Minor Factor)

Lenders like to see that you can handle different types of credit — cards, car loans, student loans, maybe a mortgage someday. That variety makes up about 10% of your score.

Closing one card won’t usually make a big difference here, but if you only have one or two accounts total, every little bit counts.

That depends on your overall credit profile.

If you have multiple cards and pay them off regularly, closing one probably won’t move the needle much — maybe a five- to ten-point dip. But if you only have a couple of accounts or carry higher balances, you might see a bigger swing, possibly 20 to 50 points.

People with limited credit history (sometimes called “thin files”) are usually hit the hardest, because each account makes up a larger portion of their score.

Factors That Determine the Impact

• How many other cards you have
• Your overall credit utilization
• The age of the card you're closing
• Your total credit history

The Annual Fee Isn't Worth It

If the card charges an annual fee that no longer makes sense, it may be time to say goodbye, or at least ask your bank if you can downgrade to a no-fee version.

You Can't Trust Yourself With Available Credit

If you struggle with overspending or temptation when a card is available, closing it could help you avoid future debt. The same goes for store cards that lure you in with “just one more 20% off” offer.

You're Dealing with Fraud or Security Issues

If you’re dealing with fraud or security issues you don’t necessarily need to close the card. Instead, freeze your card, dispute the charges, and request a new card.

If you’re on the fence, there are a few ways to keep your credit healthy without fully cutting ties.

Strategy #1: Keep It Open But Locked Away

One option is to keep the card open but tuck it away — literally. Use it once every few months for something small, like a streaming subscription, and set up autopay so you never miss a payment. This ensures your account won’t shut down due to inactivity.

Strategy #2: Request a Product Change

You could also call your issuer and ask for a product change. Many banks let you switch to a no-fee version of the same card, so you keep your credit limit and account history without paying for perks you don’t use. This preserves your account age as well.

Strategy #3: Increase Credit Limits on Other Cards First

Or, if you really want to close the card but don’t want your utilization ratio to spike, you can ask for a credit limit increase on another card first. Just keep in mind that this can trigger a hard inquiry, which might temporarily shave a few points off your score.

If you’ve weighed all the options and determined that closing your credit card is the best course of action, here’s how to close your credit card with minimal damage.

Before you make the call, take care of a few housekeeping items first.

Pay off the balance completely. Make sure you see that beautiful $0 balance before moving forward. Even a small remaining balance can complicate the closing process and potentially turn into an overlooked debt that gets sent to collections.

Redeem all rewards. Cash out those credit card points, miles, or cash back rewards. Once the account closes, you'll lose access to them, and that's money left on the table. Check if you have any pending rewards from recent purchases too.

Update your recurring payments. Go through your bank statements and identify any subscriptions, utilities, or autopay bills tied to this card. Update them to another payment method before closing. Missing a Netflix payment is annoying; missing a car payment because you forgot to update it can seriously damage your credit.

Time it strategically. If you're planning to apply for a mortgage, auto loan, or any major credit in the next six to twelve months, hold off on closing the card. Lenders scrutinize your credit profile closely during these applications, and any sudden changes, even closing a card, can raise questions or lower your score at the worst possible time.

Once you've completed all the prep work, it's time to officially close the account. Here's how to do it right.

Call your card issuer directly. Most credit card companies require you to call to close an account; you typically can't do it online. Be prepared to answer security questions and possibly sit through a retention offer. They might try to keep you as a customer by waiving fees or offering bonus points. Stay firm if you've already decided.

Request written confirmation. After the representative processes your closure request, ask them to send you written confirmation via email or mail. This creates a paper trail in case any issues pop up later, like unauthorized charges or disputes about when the account was actually closed.

Ask that it be noted as "closed by cardholder request." This is important. You want your credit report to clearly show that you chose to close the account, not the issuer. A notation like "closed by creditor" can raise red flags for future lenders, making them think you were cut off due to missed payments or other problems.

Verify the closure on your credit report. Wait 30 to 60 days, then pull your credit reports from all three major bureaus, Equifax, Experian, and TransUnion. Check that the account shows as closed and that the closure was noted correctly. You're entitled to a free credit report from each bureau once a year at AnnualCreditReport.com.

Closing your card isn't the end of the story. Here's what happens next and how to stay on track.

Your score may dip temporarily. Don't panic if you see a five- to twenty-point drop (or more if you have limited credit history). This is normal and usually recovers within three to six months, especially if you continue managing your other accounts responsibly. The key is not to make any other major credit moves during this recovery period.

Monitor your credit utilization closely. With one less card in your wallet, your total available credit has shrunk. If you're carrying balances on your remaining cards, your utilization ratio just went up. Keep an eye on this and aim to pay down balances faster if needed to keep your ratio low.

Stick with all your other positive credit behaviors. This is not the time to slack off. Keep making on-time payments, avoid maxing out your remaining cards, and don't apply for new credit unless absolutely necessary. Consistency is what helps your score bounce back.

Closing a card means you need to be even more intentional about how you manage your remaining credit. Here's how to keep your score healthy moving forward.

Keep Utilization Low Across All Cards

Your credit utilization ratio just became more important. With less total available credit, every dollar you carry in balances now has a bigger impact on your score.

Aim for under 30% on each individual card. This is the general rule of thumb, but honestly, lower is better. If you have a $5,000 limit, try to keep your balance under $1,500 at all times.

Even better: stay under 10% for optimal scoring. If you want to maximize your credit score—say, in preparation for a mortgage—keeping your utilization in the single digits can give you a noticeable boost. Yes, it's strict, but the results speak for themselves.

Pay down balances or make multiple payments per month. If you tend to use your card heavily throughout the month, consider making mid-cycle payments to keep your reported balance low. Credit card companies typically report your balance to the bureaus once a month, often on your statement closing date. Paying before that date can help keep your utilization in check even if you're spending more.

Maintain Perfect Payment History

This is non-negotiable. Payment history makes up 35% of your credit score—the single biggest factor. Even one missed payment can do more damage than closing a card ever could.

Set up autopay for at least the minimum payment. Life gets busy, and it's easy to forget a due date. Autopay is your safety net. You can always pay more than the minimum manually, but this ensures you'll never accidentally miss a payment.

Payment history is 35% of your score, the biggest factor. It's worth repeating. Lenders want to know one thing above all else: do you pay your bills on time? Consistently hitting those due dates builds trust and keeps your score climbing.

Even one missed payment can cause more damage than closing a card. A single late payment can drop your score by 60 to 110 points, depending on your credit profile. That's way worse than the temporary dip from closing an account. Protect your payment history at all costs.