The safest choice is to keep the card open and stop using it

When you have a credit card you no longer need, the instinct is often to close the account. But closing it usually hurts your credit score more than keeping it open does. The reason is credit utilization — the percentage of your total credit limit that you're currently using. When you close a card, your available credit shrinks, which makes your utilization percentage go up even if you don't charge anything new. A higher utilization ratio signals risk to lenders and can lower your score by 10 to 50 points or more, depending on how much credit you're closing.

Keeping the card open costs you nothing if there's no annual fee. You straightforward stop using it. The account stays active, your available credit stays the same, and your score stays stable. The card issuer may eventually close it for inactivity, but that takes years, and you can prevent it by making one small purchase every few months and paying it off when ready.

Key Takeaways

  • Closing a credit card usually lowers your score because it reduces your available credit, even if you don't owe anything on other cards.
  • If the card has no annual fee, keeping it open and unused is almost always better for your credit than closing it.
  • If the card charges an annual fee you don't want to pay, call the issuer and ask to downgrade to a no-fee version of the same card before closing it.
  • If you do close a card, do it when your credit utilization is already low and when you don't have other credit applications pending.
  • Physically destroying the card is safe once you've decided not to use it, but closing the account with the issuer is a separate step.

When closing a card makes sense

Close a card if it charges an annual fee and the issuer won't remove it or let you switch to a no-fee card. The fee is real money leaving your account, and no credit score benefit is worth paying for a card you don't use. Call the card's customer service number — usually on the back of the card — and ask if you can downgrade to a different card from the same issuer that has no annual fee. Many issuers will do this rather than lose you as a customer.

If downgrading isn't an option and you decide to close the account, do it strategically. Close the card when your credit utilization is already low — ideally under 10 percent across all your cards. Don't close it right before you explore for a mortgage, car loan, or another credit product, because the temporary score drop could affect your interest rate. If you have multiple cards to close, space them out over several months rather than closing them all at once.

How to close a credit card account

Call the customer service number on the back of your card or log into your online account and look for a "close account" or "contact us" option. When you call, tell the representative you want to close the account. They may ask why, and they may offer you a retention bonus — a statement credit or points — to keep it open. You can accept or decline.

Before you hang up, confirm three things: that the account is closed, that your balance is zero (or that you've arranged to pay any remaining balance), and that the issuer will send you written confirmation. Ask for the representative's name and the date of the call in case you need to reference it later. Check your credit report a few weeks after closing to make sure the account shows as closed on your end.

Destroying the physical card is separate from closing the account. You can cut it up, shred it, or throw it away once you've confirmed the account is closed. Some people prefer to keep the card in a drawer unused rather than close it, which is fine — the card itself is just plastic and poses no risk if you're not using it.

What happens to your credit after you close a card

Your score will likely drop in the short term because your available credit decreases. The drop is usually temporary — it typically recovers within a few months as long as you keep your other accounts in good standing and don't miss any payments. The longer-term effect depends on how much credit you're closing relative to your total available credit. If you're closing a $5,000 limit card and you have $50,000 in other available credit, the impact is smaller than if you're closing a $5,000 card and that's most of your available credit.

Your payment history on that card stays on your credit report for seven years after you close it, which is good — it shows you managed the account responsibly. The account itself will eventually age off your report, but the positive history remains part of your record during that seven-year window.

Keeping old cards active without using them

If you decide to keep the card open, you don't have to use it. But card issuers sometimes close accounts for extended inactivity, usually after 12 to 24 months with no charges. To prevent this, make one small purchase every few months — a coffee, a gas station fill-up, anything — and pay it off when ready when the bill arrives. This keeps the account active in the issuer's system without costing you anything or creating debt.

Set a phone reminder for every three months if you think you'll forget. Some people put the card on a small recurring charge like a streaming service subscription, then pay it off each month. The key is that the account shows activity, so the issuer has no reason to close it.

Protecting yourself from fraud on unused cards

An old card sitting in a drawer is not a fraud risk as long as you're not carrying it around. The real risk is that someone could use the card number if it's been compromised — either from a data breach at a store or online, or from a stolen statement. If you're keeping the card, check your statements or set up account alerts so you know when ready if something is charged to it.

Most card issuers offer free fraud monitoring and will reverse unauthorized charges, so you're protected even if the card is used without your permission. If you're worried about the card being stolen from your home, you can keep it in a safe or safety deposit box. If you're not using it and don't want to monitor it, closing it removes that small risk entirely.

Frequently Asked Questions

Will closing a credit card hurt my credit score?

Yes, usually. Closing a card reduces your available credit, which raises your credit utilization ratio and typically lowers your score by 10 to 50 points or more. The drop is temporary if you keep other accounts in good standing, but it can last several months. If you don't have an annual fee, keeping the card open is almost always better for your score.

What if I have a balance on the card I want to close?

Pay off the balance first. You can't close an account with an outstanding balance. Once the balance is zero, you can close it. If the card has a high interest rate, pay it off as quickly as you can before closing, or transfer the balance to a lower-rate card first.

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 a recently closed account if you call and ask. Others won't. If you think you might want the card back, ask the representative before you close whether you can reopen it later. If reopening isn't possible, you can always explore for a new card from the same issuer.

Does closing a card affect my payment history?

No. Your payment history on that card stays on your credit report for seven years after you close it. Closing the account doesn't erase the record of on-time payments you made, so it doesn't hurt that part of your credit profile.

What should I do with the physical card after I close the account?

You can cut it up, shred it, or throw it away. The physical card is just plastic and has no value once the account is closed. Some people prefer to keep it in a drawer for their records, which is also fine. The important step is closing the account itself, not destroying the card.