The safest way to close an old credit card
Closing a credit card is straightforward — you call the card issuer, ask to close the account, and confirm they have processed the request. The hard part is timing it right so you do not accidentally hurt your credit score. The two things that matter most are your credit utilization (how much of your available credit you are using) and the age of your accounts. Closing a card can worsen both, which is why the order and timing of what you close matters more than the closing itself.
Before you call, pay the balance to zero. Do not close a card while you owe money on it — the issuer may report it as a closed account with a balance, which looks worse to credit bureaus than an open account you are paying down. After the balance is zero, wait one or two billing cycles to let that zero balance report to the credit bureaus. Then call the customer service number on the back of the card and say you want to close the account. Ask the representative to confirm the account is closed and note the date. Request written confirmation by mail or email.
Key Takeaways
- Pay the card balance to zero and wait one or two billing cycles before closing, so the zero balance reports to credit bureaus first.
- Closing your oldest card or your card with the highest credit limit will hurt your score more than closing a newer card with a low limit.
- If you have high balances on other cards, closing a card raises your overall credit utilization ratio, which can lower your score temporarily.
- After closing, keep the card in a safe place for at least a year in case the issuer disputes the closure or you need proof of the account history.
Why closing a card can lower your credit score
Your credit score is built on five factors: payment history, amounts owed, length of credit history, credit mix, and new credit inquiries. Closing a card affects three of these. First, it reduces your total available credit, which makes your credit utilization ratio go up. If you have $5,000 in balances and $20,000 in available credit, your utilization is 25 percent. If you close a card with a $5,000 limit, your available credit drops to $15,000, and your utilization jumps to 33 percent. Credit bureaus view higher utilization as riskier, so your score may drop.
Second, closing a card removes that account from your credit history length calculation. If the card you are closing is your oldest account, the average age of your accounts drops, which can lower your score. Third, closing a card reduces your credit mix — the variety of credit types you hold (credit cards, car loans, mortgages, and so on). A narrower mix signals slightly more risk.
The score drop is usually temporary. As you pay down other balances and time passes, your utilization improves and the impact fades. But if you close a card right before explore for a mortgage or car loan, you may face a higher interest rate because your score is lower at that moment.
Which cards to close first
If you have multiple cards you want to close, start with the ones that will hurt your score the least. Close newer cards before older ones. Close cards with low credit limits before cards with high limits. Close cards you rarely use before cards that help your credit mix.
For example: if you have a store credit card opened two years ago with a $1,000 limit, and a general-purpose card opened ten years ago with a $10,000 limit, close the store card first. The newer card has less impact on your credit history length, and the lower limit means losing it does not shrink your available credit as much.
If you have paid off a card and are not using it, closing it is usually safe — you are not losing active credit that helps your mix. But if closing it would raise your utilization significantly (because you carry balances on other cards), wait until those balances are lower before you close.
How to avoid closing cards if you want to keep your score stable
You do not have to close a card to stop using it. You can straightforward leave it open, unused, and let it sit. This keeps your available credit intact and preserves the account age. The only downside is that some issuers will close inactive accounts on their own after 12 to 24 months of no activity, though they will usually send you a notice first.
If you want to keep a card open but inactive, use it once or twice a year for a small purchase you would make anyway — a coffee, a gas fill-up — and pay it off when ready. This keeps the account active in the issuer's system and prevents them from closing it for inactivity. You get the credit-building benefit of the open account without carrying a balance or paying interest.
Another option is to keep the card but ask the issuer to lower the credit limit. This reduces your available credit slightly, but not as much as closing the card entirely. It also signals to the issuer that you are being responsible with credit, which can help your relationship with them.
What happens after you close a card
After you close a card, the account will stay on your credit report for seven to ten years, depending on whether the account was in good standing. This is actually helpful — the account history continues to age and help your credit history length, even though the account is closed. You will not be able to use the card, and the issuer will not report new activity, but the account itself does not disappear.
If you closed the card in good standing (no missed payments, no collections), it will show as "closed by consumer" on your credit report. If the issuer closed it, it will show as "closed by creditor." The first looks better to lenders, though both are acceptable.
Keep the physical card in a safe place for at least a year after closing. If there is ever a dispute about whether the account was truly closed, or if fraudulent charges appear after closure, you will have proof of the account number and closure date. After a year, you can shred the card.
Closing cards with annual fees or rewards you do not use
Annual fees are a common reason to close a card. If a card charges $95 or $150 per year and you are not using the rewards, closing it makes financial sense. Call the issuer before you close and ask if they will waive the annual fee for the next year. Many issuers will do this to keep your account open, especially if you have been a customer for a long time or have other accounts with them.
If they refuse to waive the fee and you do not want to pay it, close the card. The annual fee is a real cost, and there is no point keeping an account open just to protect your credit if you are paying money you do not need to spend. The temporary score impact of closing is usually worth avoiding years of unnecessary fees.
If the card has rewards you are not redeeming, use them before you close. Redeem points for cash back, statement credits, or travel rewards. Once the account is closed, you may lose the ability to use remaining points, depending on the issuer's policy. Check the card's terms or call and ask before you close.
Closing cards with a balance or in collections
Do not close a card while you owe money on it. If you close an account with a balance, the issuer will report it as a closed account with an outstanding balance, which looks worse to credit bureaus than an open account you are paying down. Keep the account open, pay down the balance, and close it only after it reaches zero.
If a card is in collections or has been charged off, do not call and close it yourself. The account is already damaged on your credit report. Closing it will not improve the situation, and calling may restart the clock on the debt or give the collection agency new information. If you want to settle a debt in collections, work with the collection agency directly or hire a credit counselor to negotiate on your behalf. Once the debt is settled or paid, the account will eventually fall off your credit report on its own.
Frequently Asked Questions
Will closing a credit card hurt my credit score?
It may, temporarily. Closing a card reduces your available credit and can raise your credit utilization ratio, which can lower your score by 5 to 50 points depending on how much credit you have and how much you owe. The impact is usually temporary — as you pay down other balances, your score recovers. Closing an older card or one with a high limit will hurt more than closing a newer card with a low limit.
How long does it take to close a credit card?
The call itself takes 5 to 10 minutes. The issuer will process the closure within one to two business days. Ask for written confirmation and keep it. Some issuers take longer to update their systems, so the account may still show as open on your credit report for 30 to 60 days after you close it — this is normal and will correct itself.
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 90 days of closure. Others will not reopen at all and will treat a new process as a brand-new account. Call the issuer's customer service and ask before you close if reopening is important to you.
What should I do with the physical card after I close the account?
Cut it up or shred it so it cannot be used. Keep a photo or note of the account number and closure date for your records in case you need proof later. After one year, you can safely discard the documentation.
Is it better to close old cards or new cards?
Close newer cards first. Older cards help your credit history length, which is a factor in your credit score. Closing a card you opened 10 years ago hurts more than closing one you opened two years ago. If you must close multiple cards, prioritize closing the newest ones with the lowest limits.