Closing a credit card usually lowers your score, but the damage depends on how much credit you're using and how long you've held the card
When you close a credit card, your credit score typically drops because two major scoring factors change when ready: your credit utilization ratio (the percentage of your available credit you're using) goes up, and your average age of accounts may go down. The size of the drop varies. If you're carrying balances on other cards, closing an unused card can hurt more than closing one you've been using. If the card is very old, the damage lasts longer.
The score usually recovers within a few months if you don't close other cards and you keep your balances low on remaining accounts. But if you close multiple cards or close a card that was your oldest account, the recovery takes longer and the initial drop is steeper.
Key Takeaways
- Closing a card raises your credit utilization ratio because your total available credit shrinks, even if your balances stay the same.
- The older the card you close, the more your average account age drops, which can lower your score for years.
- Closing a card you actively use hurts less than closing an unused card, because the utilization hit is smaller.
- Closing multiple cards in a short time compounds the damage and delays recovery.
- You can minimize the score impact by paying down balances before closing, or by keeping the card open but unused.
Why credit utilization matters when you close a card
Credit utilization is the ratio of your total balances to your total credit limits across all your cards. If you have $5,000 in balances and $20,000 in total limits, your utilization is 25 percent. When you close a card with a $5,000 limit that you weren't using, your total limits drop to $15,000, and your utilization jumps to 33 percent — even though your actual balances haven't changed.
Scoring models treat higher utilization as riskier, so the ratio carries significant weight. A jump from 25 percent to 33 percent can drop your score by 10 to 50 points depending on your current score and how many other factors are working in your favor. The impact is smaller if you're already using less than 10 percent of your available credit, and larger if you're already using 30 percent or more.
You can reduce this hit by paying down balances on your remaining cards before you close the one you're planning to close. If you pay your $5,000 balance down to $2,000 before closing that card, your utilization stays closer to where it was.
How account age affects your score after closing
The age of your accounts makes up about 15 percent of your credit score. When you close a card, that account stops aging, and your average account age may drop. The older the card, the bigger the drop. Closing a card you've had for 15 years hurts more than closing one you've had for 2 years.
The damage to your average age is temporary but long-lasting. The closed account stays on your credit report for 10 years, and during that time it still counts toward your average age — but it stops aging after the day you close it. So a card you closed at 15 years old will eventually age to 25 years old on your report, but it won't help your average the way an active 25-year-old card would.
If the card you're closing is your oldest account, the hit to your average age is when ready and noticeable. If it's your newest account, the impact is minimal.
When closing a card does less damage
Closing a card hurts less if you're actively using it. When you close a card you've been charging on regularly, you're not losing much available credit because you were already using some of it. The utilization ratio doesn't jump as high. For example, if you close a card with a $5,000 limit that you've been carrying a $2,000 balance on, you lose $3,000 in available credit, not $5,000.
Closing a card also hurts less if you have many other accounts. If you have 10 credit cards and close one, your average age drops by one-tenth of the closed card's age. If you have 3 cards and close one, your average age drops by one-third. The more accounts you have, the smaller the proportional impact.
Closing a newer card (less than 5 years old) causes less long-term damage than closing an older one, because the account ages out of your report faster and stops dragging down your average age.
When closing a card causes the most damage
Closing a card hurts the most when it's your oldest account. If you've had a card for 20 years and close it, your average account age drops significantly and stays depressed for years. This is especially damaging if you don't have other very old accounts to balance it out.
Closing an unused card with a high limit also causes more damage than closing one with a low limit, because you're losing more available credit and your utilization ratio jumps higher. Closing multiple cards within a short time (a few months) compounds the damage — each closure lowers your average age and raises your utilization, and the effects stack.
The damage is worst if you're also carrying high balances on your remaining cards. If you close a card and your utilization jumps from 40 percent to 50 percent, the score drop is steeper than if it jumps from 10 percent to 20 percent.
Alternatives to closing a card
If you want to stop using a card but don't want to close it, you can keep it open and unused. The account will continue to age, your available credit stays the same, and your utilization ratio doesn't change. Many people use this strategy for old cards they want to keep for the age benefit.
Some issuers close inactive accounts after 12 to 24 months of no activity, so if you go this route, charge something small to the card occasionally (a subscription or a small purchase) and pay it off. Check your card's terms or call the issuer to ask about their inactivity policy.
If you're closing a card because of an annual fee, call the issuer and ask if they offer a no-fee version of the same card. Many issuers will downgrade your account instead of closing it, which keeps the account open and active without the fee.
How long the score damage lasts
The initial drop from closing a card usually happens within a month. Your score typically recovers within 3 to 6 months if you don't close other cards and you keep your balances low on remaining accounts. The recovery is faster if you have a long credit history and multiple accounts, and slower if you have few accounts or a short history.
The damage to your average account age lasts longer — up to 10 years, as long as the closed account appears on your report. But the impact weakens over time as your other accounts age and the closed account ages out of the calculation.
If you're planning to explore for a loan or mortgage, it's better to close cards at least 6 months before you explore, so your score has time to recover. If you need to close a card right before explore for credit, the timing will work against you.
Frequently Asked Questions
Does it matter which credit card I close?
Yes. Closing your oldest card hurts more than closing a newer one. Closing an unused card with a high limit hurts more than closing one with a low limit. If you must close a card, close the newest one with the lowest limit that you haven't held for many years.
Will my score recover if I close a card?
Usually, yes — within 3 to 6 months if you keep your balances low on other cards. The recovery is faster if you have many accounts and a long credit history. The damage to your average account age lasts longer, but the impact weakens as time passes and your other accounts age.
What if I close a card and my score drops a lot?
A large drop is normal and temporary. Focus on keeping your utilization low on your remaining cards and making all payments on time. Avoid opening new cards or closing other cards while your score is recovering. Your score should bounce back within a few months.
Can I reopen a card after I close it?
You can ask the issuer to reopen a recently closed card, but they may treat it as a new account rather than reopening the old one. If they reopen it as the original account, your age and history stay intact. Call the issuer within 30 days of closing to ask about reopening.
Should I close a card with an annual fee instead of paying it?
Not if the card is old or has a high limit. Call the issuer first and ask if they can downgrade you to a no-fee version of the same card. If they can't, paying the fee may be cheaper than the score damage from closing, especially if you're planning to explore for credit soon.