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Canceling a credit card sounds simple — call the issuer, close the account, done. But depending on which card you close and when, your credit score could take a big hit.
The good news: With a little planning, you can minimize the damage. Here’s how.
How canceling a card can hurt your credit score
Before you cancel, it’s smart to learn how it can affect your score.
Your credit utilization can go up
This is the biggest short-term risk. Credit utilization accounts for up to 30% of your FICO® Score. You want to keep this number low, but it can jump overnight when you close an account.
Credit utilization is the amount you owe divided by your available credit. Say you have three cards with a combined limit of $15,000 and balances totaling $3,000, then your utilization is 20%.
If you close one card with a $5,000 limit, then your available credit drops to $10,000, and your utilization jumps to 30%. Bad news for your score.
How to minimize the damage:
- Pay off your credit cards ASAP. If you owe little to nothing, then your credit utilization will still be low (or zero) when you cancel a card.
- Get a replacement card before canceling your old card — preferably one with a similar or higher credit limit. That will keep your utilization from spiking.
If you’re looking to replace your card, check out our list of credit cards with high limits and great rewards.
Your average account age will eventually drop
Length of credit history makes up 15% of your FICO® Score. The older your accounts, the better — which means closing an old card can hurt your score.
There’s a silver lining, though: If the account is in good standing, it stays on your credit report for 10 years. So there won’t be an immediate impact on your score.
When it makes sense to cancel
Here are some situations where closing an account is the right call, even if it hurts your score:
- The annual fee isn’t worth it. Actual money is worth more than your credit score. Don’t pay $95+ a year just to protect your score, which can easily be rebuilt.
- You’re overspending. There’s no shame in removing temptation to spend. Again, protecting your money is priority No. 1.
- It’s a joint account and the relationship has ended. Getting off a shared account protects your credit from someone else’s decisions.
When you should keep the card open
Some cards are worth keeping open, even if you barely use them. So long as you’re not paying an annual fee, consider keeping:
- Your oldest card. This is the anchor of your credit history.
- A high-limit card. This card is boosting your utilization ratio for free.
- Any card with a long, clean payment history. These accounts strengthen your credit profile just by existing.
Instead of canceling cards like these, maybe keep them at home and use them for an online purchase a couple of times a year.
Consider downgrading
Instead of canceling, see if you can downgrade to a card with no annual fee. That way, you keep the account open, which means your credit limit and account history won’t change.
Most major card issuers allow downgrades. It doesn’t hurt to call the number on the back of your card and find out.
If you cancel, do it in this order
1. Redeem any rewards
Any unredeemed points, miles, or cash back may be forfeit when you cancel your card. Be sure to cash out before you cancel.
2. Pay off your balance
You can’t close a card with an outstanding balance. No matter how or when the account is closed, you won’t get out of any debts — and they’ll be on your credit report.
3. Call to cancel — don’t just stop using it
An unused card isn’t a closed card. It can still accrue fees, get stolen, or affect your credit. Ask your issuer to close the card and ask for a confirmation number or written proof that the account is closed.
4. Check your credit report 30 days later
Log into AnnualCreditReport.com and confirm that the account appears as “closed by consumer.” You don’t want the account hanging around without your knowledge.
Remember: Your credit score can be rebuilt, but you won’t get lost money back
Credit scores fluctuate all the time. It’s not something to lose sleep over. As long as you make payments on time and keep your balances low, your score will rebound.
What’s most important is to avoid losing money. If your card is costing you money, then it’s time to cancel. Even better, replace it with something that earns you rewards.
If you’re ready for a change, then check out our list of the best credit cards of 2026.
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