What Happens to Your Credit Score When You Close a Credit Card

Closing a credit card usually hurts your credit score, but the damage is often smaller than people fear and fades over time.

When you close a card, your credit score typically drops because two things change immediately: 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 score hit is real but temporary. Most people see a drop of 10 to 50 points, depending on how much credit they had available on that card and how long they've held it. The damage is worst if you're closing your oldest card or if that card held a large portion of your total available credit.

The good news: the negative effect shrinks over time. After a few months of on-time payments on your remaining cards, your score usually recovers. After two years, the closed account stops affecting your score as much. After seven years, it falls off your credit report entirely.

Key Takeaways

• Closing a card raises your credit utilization ratio because you lose available credit, which typically lowers your score by 10 to 50 points.
• The older the card you close, the more your score may drop, because closing it shortens your average account age.
• Closing a card with a high balance hurts more than closing one you barely use, so pay down the balance first if you can.
• Your score usually recovers within a few months if you keep making on-time payments on other accounts.
• Closed accounts stay on your credit report for seven years, so the damage is temporary, not permanent.

Why Closing a Card Affects Your Credit Utilization

Credit utilization is the percentage of your total available credit that you're currently using. If you have three cards with $5,000 limits each (totaling $15,000 available), and you're carrying $3,000 in balances, your utilization is 20 percent. Credit bureaus treat lower utilization as a sign you manage credit responsibly, so it helps your score.

When you close one of those cards, you lose that $5,000 in available credit. Now your total available credit is $10,000, but you still owe $3,000. Your utilization jumps to 30 percent. That 10-point shift in utilization ratio is what causes the score drop. The impact is larger if the card you're closing had a high limit or if you were using very little of it—because you're losing credit you weren't even borrowing against.

This is why paying down the balance before closing is worth doing. If you pay that $3,000 down to $500 before closing the card, your utilization on the remaining $10,000 available credit drops to 5 percent, which softens the blow.

How the Age of the Account Matters

Credit bureaus also look at how long you've held your accounts. Older accounts signal that you've managed credit responsibly over time, so they help your score. When you close a card, that account's age stops counting toward your average—and if it was your oldest card, your average account age drops noticeably.

Closing a card you've held for 15 years hurts more than closing one you've had for two years. If you have five cards averaging 8 years old, and you close the one that's 15 years old, your average drops to about 6 years. That shift can lower your score by another 10 to 20 points on top of the utilization hit.

This is why many people keep old cards open even if they don't use them. The card issuer may close it for inactivity after a year or two of no charges, so if you want to keep it open, use it for a small purchase every few months and pay it off right away.

The Timeline for Score Recovery

Your score doesn't stay damaged forever. Most people see the biggest drop in the first month after closing a card. Over the next three to six months, as you make on-time payments on your other accounts, your score climbs back up. By six months, many people are back to where they started or close to it.

The closed account itself stays on your credit report for seven years, but its impact weakens over time. After two years, it affects your score much less than it did at first. After seven years, it disappears from your report entirely and stops affecting your score at all.

The speed of recovery depends on the rest of your credit behavior. If you have other cards with low balances and a history of on-time payments, you'll recover faster. If you're carrying high balances on your remaining cards or have missed payments, recovery takes longer.

When Closing a Card Makes Sense Despite the Score Drop

A temporary score dip might be worth it if the card is costing you money. If you're paying an annual fee and you don't use the card, closing it saves you that fee every year. If you're tempted to overspend because you have too much available credit, closing a card removes that temptation. If you're trying to simplify your finances and manage fewer accounts, the convenience might outweigh a 20-point score drop.

The key is timing. If you're about to apply for a mortgage, car loan, or another form of credit where your score matters, wait to close the card until after you've gotten the loan. Lenders pull your score right before approving you, so closing a card in that window could cost you a better interest rate. If you're not borrowing soon, the timing of closing a card matters less.

Alternatives to Closing a Card

If you want to stop using a card without closing it, you can simply leave it open with a zero balance. This keeps your available credit intact, so your utilization ratio doesn't change. It also keeps the account age working in your favor. The only downside is that the issuer might close it for inactivity after 12 to 24 months of no charges.

To keep a card active without using it much, charge a small recurring expense to it—a streaming service, a coffee, a gas purchase—and set up automatic payments to pay the full balance each month. This keeps the account open and active without adding to your debt or requiring you to think about it.

If the card has an annual fee and you want to keep it open, call the issuer and ask if they'll waive the fee or downgrade you to a no-fee version of the card. Many issuers will do this to keep your account open, especially if you've been a customer for years.

What Happens to Rewards or Cash Back When You Close

If you have rewards points or cash back sitting in the account, use them before you close the card. Most issuers let you redeem rewards right up until the account closes. After the account closes, you typically have a window (often 30 to 90 days) to redeem any remaining balance, but policies vary. Check your card's terms or call the issuer to confirm before closing.

Any rewards you don't redeem before that window closes are usually forfeited. Some issuers are more generous than others, so don't assume—ask first.

Frequently Asked Questions

How much will my score drop if I close a card?

Most people see a drop of 10 to 50 points. The exact amount depends on how much available credit that card represented and how old it was. Closing a newer card with a small limit hurts less than closing an old card with a high limit.

Will closing a card hurt my score forever?

No. The score drop is temporary. Most people recover within three to six months if they keep making on-time payments on other accounts. After seven years, the closed account falls off your credit report and stops affecting your score entirely.

Should I close a card before applying for a mortgage?

No. Close it after you've been approved and the loan has funded. Lenders pull your credit score right before final approval, so closing a card in that window could lower your score enough to affect your interest rate.

What if I close a card and then want to reopen it?

You can't reopen a closed account, but you can apply for a new card from the same issuer. It will be treated as a new account with a new age, so it won't have the same credit-building history as the original card.

Is it better to close a card or just stop using it?

Stopping using it is usually better for your score. An open card with a zero balance keeps your available credit intact and continues to help your score. The only risk is that the issuer closes it for inactivity after 12 to 24 months, so use it occasionally to keep it active.