Yes, closing a credit card almost always lowers your score, usually by 10 to 50 points
When you close a credit card account, your credit score typically drops. The damage is not permanent — your score will recover over time — but it happens immediately and the size of the drop depends on how much of your available credit that card represented and how long you've held it.
The drop occurs because credit scoring models care about two things that change when you close an account: your credit utilization ratio (how much of your total available credit you're using) and your average age of accounts (how old your credit history is on average). Closing a card makes both of those numbers worse in the eyes of the scoring model.
Understanding why this happens will help you decide whether closing a card is worth the temporary score hit, or whether keeping it open makes more sense for your situation.
Key Takeaways
- Closing a credit card reduces your available credit, which raises your utilization ratio and typically lowers your score by 10 to 50 points.
- The older the card you close, the larger the hit to your score, because closing it reduces the average age of your credit history.
- If the card has an annual fee or you're closing it to reduce temptation to overspend, the score drop may be worth the tradeoff.
- Keeping the card open with a zero balance preserves your available credit and credit history without costing you anything if there's no annual fee.
- Your score will recover as you pay down other balances and as time passes; the damage is temporary, not permanent.
Why closing a card hurts your utilization ratio
Your credit utilization ratio is the percentage of your total available credit that you're currently using. If you have three cards with $1,000 limits each (total available credit: $3,000) and you're carrying a $500 balance on one of them, your utilization is about 17 percent.
When you close one of those $1,000-limit cards, your total available credit drops to $2,000. That same $500 balance now represents 25 percent utilization instead of 17 percent. The scoring model sees higher utilization as riskier — it suggests you're more dependent on credit — so your score drops.
The impact is larger if the card you're closing has a high limit or if you're already carrying balances on your other cards. If you close a card with a $5,000 limit and you have $2,000 in balances elsewhere, the utilization hit is substantial. If you close a card with a $500 limit and you carry no other balances, the hit is minimal.
Why closing an old card hurts your average account age
Credit scoring models reward a long credit history. The longer your accounts have been open on average, the higher your score tends to be. When you close an account, especially an old one, that average age drops.
If you've held a card for 15 years and you close it, you're removing a 15-year-old account from your history. If your other accounts average 5 years old, closing the 15-year card pulls down your average significantly. The scoring model interprets this as a shorter, less established credit history.
This is why closing your oldest card typically hurts more than closing a newer one. If you have to close a card, closing the newest one you own minimizes the damage to your average account age.
When the score drop is worth it
A temporary 10 to 50 point drop is not trivial, but it may be the right choice depending on your situation. If a card has an annual fee and you're not using it, closing it saves you money every year. The score will recover within a few months as you pay down other balances, and the annual savings add up.
If you're closing the card because you're tempted to overspend on it, closing it may protect your financial health even if your score dips. A lower score is temporary; debt from overspending can take years to pay off. This is a decision only you can make, but it's a legitimate reason to accept the score hit.
If you're closing a card because you're about to apply for a mortgage or car loan, timing matters. Close the card at least three to six months before you apply, so your score has time to recover. Lenders will see the closed account on your report, but a recovered score is less alarming than a freshly dropped one.
How to minimize the score impact if you must close a card
If you've decided to close a card, a few steps can reduce the damage. First, pay down any balance on that card to zero before you close it. Closing a card with a balance can hurt your utilization ratio even more than closing one with a zero balance.
Second, close the newest card you own rather than the oldest. This preserves your average account age, which is one of the two factors that take the biggest hit.
Third, if you have other cards with balances, pay those down in the weeks after you close the card. Lowering your utilization ratio on your remaining cards will help offset the utilization damage from closing the account. If you can get your overall utilization below 30 percent, the recovery will be faster.
Fourth, do not close multiple cards at once. If you need to close more than one, space them out by several months. Closing multiple cards in a short window creates a larger score drop and takes longer to recover from.
The alternative: keeping the card open with a zero balance
If the card has no annual fee, keeping it open is almost always better for your score than closing it. An open account with a zero balance costs you nothing and preserves both your available credit and your credit history.
The only reason to close a no-fee card is if you're concerned you'll overspend on it. If you can trust yourself not to use it, leaving it open is the score-friendly choice. You can even put it in a drawer or a safe place so it's out of sight but still open.
If the card does have an annual fee, the math changes. A $95 or $150 annual fee adds up over time. In that case, closing the card and accepting the temporary score drop is often the right financial decision.
How long it takes your score to recover
Your score will begin to recover as soon as you close the card, but the timeline depends on what else is happening with your credit. If you pay down balances on your remaining cards in the weeks after closing, your utilization ratio improves and your score recovers faster — often within two to three months.
If you don't pay down other balances, recovery takes longer. The closed account will stay on your credit report for about 10 years, but its impact on your score fades over time. After six months to a year, most people see their score return to where it was before the closure, assuming no other negative changes happen.
The older the account you closed, the longer the recovery may take, because the average age of your remaining accounts is now younger. But even in that case, time itself heals the damage — as your other accounts age, the average age of your credit history rises again.
Frequently Asked Questions
Will closing a credit card hurt my score if I have no balance on it?
Yes, it will still hurt your score because closing the account reduces your available credit and changes your average account age. However, the damage is usually smaller than if you closed a card with a balance. A zero-balance card with no annual fee is worth keeping open to avoid the score hit.
Should I close my oldest card or my newest card?
Close your newest card if you have a choice. Closing your oldest card removes a long account history from your credit profile, which hurts your average account age more. The score damage from closing a newer card is typically smaller and recovers faster.
How much will my score drop if I close a card?
Most people see a drop of 10 to 50 points, but the exact amount depends on your credit profile. If the card has a high limit or you're carrying balances on other cards, the drop may be larger. If the card has a low limit and you have low overall utilization, the drop may be smaller.
Can I reopen a closed credit card account?
It depends on the card issuer and how long ago you closed it. Some issuers will reopen an account within a few months of closure; others will not. If you're thinking you might want the card back, call the issuer before you close it and ask about their reopening policy.
Does closing a card affect my credit history permanently?
No. The closed account stays on your credit report for about 10 years, but its impact on your score decreases over time. Your score will recover within a few months to a year in most cases, and the account's age stops counting against you after a few years.