Many cardholders wonder whether closing credit cards damages their credit health. There’s no simple answer to this—it really depends on your whole credit situation, like how much credit you’re using, how old your accounts are, and what types of credit you have. Say you close an older card like the Avant Credit Card—that could bring down your average account age and maybe drop your score. Similarly, shutting a card you barely use, such as after reading negative Spun Credit Card reviews, could inadvertently increase your credit utilization if you have balances on other cards. This article digs into how closing accounts affects your credit, so you can make smart choices without risking your financial health.
Table of Content
- How Closing Credit Cards Affects Your Credit Score
- When it actually makes sense to close a credit card
- What you should do before closing any credit card
- Other options instead of closing your cards
- Keeping an eye on your credit after closing a card
- Real-life examples: what happens when people close cards
- Common questions about whether closing credit cards hurts credit
How Closing Credit Cards Affects Your Credit Score
Let’s talk about how it impacts your credit utilization ratio.
Here’s the deal: when you close a credit card, you lose that available credit. This can boost your credit utilization ratio, which makes up 30% of your FICO score.
Say you’ve got $10,000 total credit across all cards with a $2,000 balance – that’s 20% utilization. But close a card with a $4,000 limit, and your available credit shrinks to $6,000.
Suddenly your utilization spikes to 33%. That jump could hurt your score, especially if you’re planning to apply for new credit soon.
Before closing any account, always check how it’ll affect your credit utilization. I once had a client wanting to close their Nordstrom card. We crunched the numbers and saw their utilization would shoot from 15% to 45%.
So we switched them to a no-fee version instead, keeping their credit line intact. Always aim to keep your utilization under 30% – both overall and on each card.
Now let’s consider how closing cards affects your account age.
Closed accounts in good standing stay on your report for about 10 years and keep aging during that time. But if you close your oldest card – say an Avant card you’ve had 15 years – it’ll eventually drop off your report.
That really brings down your average account age. This matters because credit history length makes up 15% of your FICO score. Lenders like seeing older accounts – it shows you’re stable.
My advice? Keep your oldest card open, even if it has a small annual fee. In my 10 years as a financial advisor, I’ve watched clients drop 20-40 points just from closing their oldest account.
If you need to close several cards, begin with the newest ones. For pricey cards like premium travel cards, ask to switch to a cheaper version instead of closing. This way you keep your credit history.
<img src="https://www.crdpay.com/wp-content/uploads/2025/11/93ec65db-012f-4eca-8700-7fc823b486cd.webp" alt="How Closing credit cards Affects Your Credit Score”>
When Closing a Credit Card Makes Sense
High-Fee Cards With Minimal Benefits
Cost-Benefit Analysis: Sometimes it just makes sense to close a credit card, especially when you’re paying high annual fees that aren’t worth it anymore.
Take the Nordstrom card – if you hardly ever shop there, that $95 yearly fee probably isn’t doing you any favors. Similarly, after reading Spun Credit Card reviews highlighting its poor rewards structure and high APR, closing it could save you money.
We had a client who saved more than $600 a year by closing three premium cards they barely used. Their credit score took a small hit, but their wallet got much happier.
Alternative Solutions: Before you close any card, give the issuer a call and see what they can do for you. Lots of companies will hook you up with retention bonuses, waive fees, or switch you to a card with no annual fee.
I’ve talked issuers into changing high-fee cards to basic ones myself. You keep your credit history but ditch the costs. If you really have to close the card, make sure you’ve got other older accounts to keep your credit age looking good.
Managing Too Many Credit Accounts
Simplification Strategy: Having numerous credit cards can become administratively burdensome and increase fraud risk. If you’re carrying more than 5-7 cards, it might be time to slim down your wallet.
One client had 12 store cards and couldn’t keep track of payments. We closed 7 of their newer store cards and kept the oldest general ones. Their score dropped about 15 points for a bit, but bounced back in four months as they got better with payments.
Risk Assessment: If you’re closing several accounts, spread it out over 6 to 12 months so the hit to your credit isn’t too big all at once. Don’t close cards right before you apply for something big like a mortgage. Here’s how closing cards in different situations might mess with your credit score:
| Scenario | Credit Limit Reduction | Utilization Change | Potential Score Impact |
|---|---|---|---|
| When you close your newest card with a small limit | Your total credit drops less than 10% | Your credit usage barely goes up | Your score might drop 0-10 points |
| When you close your oldest card with a big limit | Your total credit takes a hit over 30% | Your credit usage jumps way up | Your score could drop 20-50 points |
| When you close a card with an annual fee | It depends on your situation | It depends on your situation | Your score might drop 5-25 points |
Here’s what you should do before closing any credit card
First things first – pay off what you owe and use your rewards
Make sure you pay off your whole balance before closing that card If you leave money owed on a closed account, it can really mess up your credit utilization and payment history I’ve had clients who closed cards with just a little bit left to pay.
then got hit with missed payments because their autopay got turned off Call up customer service to double-check you owe nothing, and ask them to send you written proof the account is closed.
Don’t let your hard-earned rewards go to waste! Look at all your points, cash back, or miles and use them up before you close the account One client almost threw away $350 in cash back because they were in a hurry to close their Avant card Most credit card companies will wipe out any rewards you haven’t used when you close the account Got travel points? Either transfer them to partner programs or turn them into statement credits first.
Next up – switch over your automatic payments and give creditors a heads-up
Find every automatic payment tied to that card – think streaming services, bills, subscriptions – and switch them to a different payment method Make yourself a checklist so you don’t miss any payments and hurt your credit score I had a client close a card, then found out their gym payment bounced and it went to collections They spent six months trying to fix the 50-point hit to their credit score.
Give lenders who check your credit report a quick explanation about why you’re closing the card Being upfront like this shows you’re handling your credit responsibly When I help people with this.
I note down their reasons – like wanting simpler finances or dodging fees – so they can mention it later when applying for new credit.
Alternative Strategies Instead of Closing Cards
Product Change or Downgrade Options
Account Preservation: Most big card companies let you switch to a different card they offer, and you don’t need to close your account to do it. This keeps your credit history intact and might even get rid of annual fees.
Say you have a fancy travel card with fees – you could downgrade to a free version instead. I just helped someone switch from a pricey card to a basic one, they kept their 12-year credit history and saved $150 each year.
Negotiation Tactics: Just call the retention department and tell them about better deals you’ve seen, or that you’re thinking of canceling. Lots of companies will give you reasons to stick around.
From what I’ve seen, when people talk about canceling, about 70% of the time they get fees waived or can switch cards. This way you keep your credit limit and how long you’ve had the account, plus it helps with cost worries.
Reducing Credit Limits Instead of Closure
Risk Management: Worried about spending too much but don’t want to close the card? Just ask for a lower credit limit instead. This cuts down on the urge to overspend and saves your credit history.
But be careful – if you lower your limit too much, it could hurt your credit utilization. We usually suggest keeping your limit about 3 to 5 times what you normally spend each month on that card.
Fraud Prevention: For cards you hardly ever use, turn on transaction alerts or lock the card in the app rather than closing it. This stops anyone from using your card without permission but keeps your account open.
Most card companies now let you lock your card, so you feel secure without dealing with the downsides of closing your account.
Wondering if closing a credit card hurts your credit? Let’s talk about keeping an eye on your credit after you close a card.
You’ll want to track how your score changes and watch for updates to your report.
After closing a card, check your credit score regularly for the next 3 to After 6 months. You can use free services like Credit Karma or whatever credit monitoring tool your bank offers.
If you see your score drop a lot, figure out why – maybe your credit utilization changed, your accounts got younger, or something else. I had one client whose score dropped 25 points after closing a card.
but they got most points back in three months just by keeping their credit usage low on other cards.
Make sure your credit report shows the account was closed by you, not by the bank – that looks much better. If you spot any mistakes, dispute them right away. Here’s a simple timeline for what to check and when after closing a credit card:
| When to check | What to look for | What to do if there’s a problem |
|---|---|---|
| After 30 days | See if your account status updated | Make sure it says you closed it, not the bank |
| Around 2-3 months | Check how much your score changed | If your score dropped, try using less credit on other cards |
| After 6 months | See how your score is trending long-term | If your score is still down, take steps to fix it |
What to do if closing a credit card hurts your score
If closing a card makes your score take a hit, don’t panic – just focus on good credit habits. Pay every bill on time, use less than 20% of your available credit on other cards, and hold off on applying for new credit cards.
I’ve helped clients recover 30 points within four months using this approach. Another trick – ask a family member to add you as an authorized user on their old card that they’ve always paid on time.
If you need to close several cards, spread it out over a year or more so it doesn’t hurt your credit too much all at once. Meanwhile, make sure you keep your oldest credit cards active and in good shape.
One of my clients closed three store cards over 15 months and their score only dropped about 10 points total – they just waited until their score bounced back before closing the next one.
Let’s look at some real stories about people closing credit cards.
Here’s someone who closed cards without hurting their credit much.
Strategic Closure Example: Sarah, 42, had eight credit cards including store cards she no longer used. We checked her credit and found three newer store cards with low limits.
closing these wouldn’t really hurt her credit utilization or average account age. She closed them over six months and her score only dropped 5 points temporarily.
She kept her oldest card open, the one she’d had for 15 years, so her credit history stayed strong. This smart plan helped her simplify her money stuff without wrecking her 780 credit score.
The big lesson: Sarah planned carefully, she paid off all balances first, used her rewards, and kept low credit utilization on her other cards. Her story proves that if you’re strategic.
closing newer cards with low limits won’t cause big problems. Now she checks her credit every few months and keeps her great score.
Now here’s a story about someone who messed up closing a card.
Mark is 35 and made a classic mistake, he closed his oldest credit card just to avoid the $150 yearly fee, that card was 12 years old with a $15,000 limit, and he didn’t even ask about switching to a different card first.
His credit score plunged 45 points because he had less available credit and his average account age got shorter. This happened right before he wanted to get a car loan, so he ended up with a higher interest rate.
We helped Mark fix his score over eight months, he kept his credit usage under 10%, set up payment reminders so he wouldn’t pay late, and got added to his wife’s old credit card account.
His score finally bounced back, but that mistake cost him about $1,200 in extra car loan interest, a tough lesson about managing credit wisely.
Yes, closing a credit card can hurt your score, but if you plan carefully, you can keep the damage small. Think about your whole credit situation, check if you can switch to a different card instead, and keep an eye on your score after.
Just remember, using credit responsibly over the long haul is what really keeps your finances healthy.
Did your credit score change after you closed a card? Tell us your story below, or check out our guide on credit utilization for more helpful tips!
FAQ About does closing credit card hurt credit
How long does a closed credit card stay on your report?
When you close a credit card that’s in good standing, it stays on your credit report for about 10 years. During that time, it still helps your credit history. But if the card has negative marks like late payments, those might drop off after 7 years.
This longer reporting period softens the blow to your average account age when you first close the card.
Is it better to close a credit card or leave it open with zero balance?
Most times, it’s smarter to keep a card open with zero balance. Why? Because it preserves your available credit and keeps your account history longer. But if the card charges high fees, could get hacked.
or makes you spend too much, then closing it makes sense. With no-fee cards, just make a small purchase now and then and pay it right off. That keeps the account active and costs you nothing.
Can closing a credit card improve your credit score?
You won’t usually see your credit score jump right after closing a card. The only exception is if you’ve opened lots of new accounts lately. Then closing one might ease lender worries about you having too much available credit.
But for most credit scores, losing that available credit and possibly shortening your credit history hurts more than it helps. You’re better off focusing on paying bills on time and keeping your credit usage low.
What’s the difference between closing a card and freezing it?
When you close a card for good, that account gets shut down and will eventually disappear from your credit history. Freezing a card through your bank’s app stops new charges temporarily. But the account stays open and still helps your credit.
Freezing won’t hurt your credit scores but blocks unauthorized spending. It’s perfect for cards you want to keep open but don’t use often.
