There are two main ways closing a card can affect your credit score.<\/p>\n
1. It can increase your credit utilization<\/span><\/h3>\nYour credit utilization ratio \u2014 the percentage of available credit you're using \u2014 is one of the most important factors in maintaining and building healthy credit<\/a>. When you close a card, you lose that card\u2019s credit limit. If your balances stay the same, your utilization goes up.<\/p>\nFor example, if you have $10,000 in total credit and carry a $2,000 balance, your utilization is 20%. Close a card with a $5,000 limit, and suddenly you\u2019re using 40% of your available credit.<\/p>\n
If you pay your balances in full, closing a card will have little to no impact on your utilization. However, if you carry a balance, higher utilization can signal increased risk to lenders and may lower your score.<\/p>\n
Keeping your balances low is one of the most effective ways to protect your score, especially if you\u2019re planning to close a card. It\u2019s just one of several habits that can help you manage your credit score<\/a> more effectively.<\/p>\n2. It can affect your average account age… eventually<\/span><\/h3>\nThe length of your credit history also plays a role in your score. Closing a card doesn\u2019t erase your payment history. As long as the account was in good standing, it can remain on your credit report for up to 10 years and continue to factor into your score during that time.<\/p>\n
However, once that account eventually falls off, your average account age could decrease, especially if it was one of your oldest cards.<\/p>\n
Related<\/strong>: Ways To Check Your Credit Score for Free<\/a><\/p>\nWhen closing a credit card might not hurt your credit score<\/span><\/h3>\nNot every closure leads to a drop in your credit score. You may see little to no impact if:<\/p>\n
\n- You have low balances across your other cards.<\/li>\n
- The card you\u2019re closing has a relatively small credit limit.<\/li>\n
- You already have a long, well-established credit history.<\/li>\n
- You have multiple other open accounts.<\/li>\n<\/ul>\n
In these cases, your overall credit profile could stay strong even without that card.<\/p>\n
When closing a credit card can have a bigger impact<\/span><\/h3>\nClosing a card is more likely to hurt your score if:<\/p>\n
\n- It\u2019s one of your oldest accounts.<\/li>\n
- It has a high credit limit relative to your other cards.<\/li>\n
- You carry balances on other cards.<\/li>\n
- You don\u2019t have many other open accounts.<\/li>\n<\/ul>\n
In short, the more that a card supports your credit profile, the more painful the impact will be when it\u2019s gone.<\/p>\n
Related<\/strong>: What Is Considered a ‘Fair' Credit Score \u2014 And How To Improve It<\/a><\/p>\nA Better Option: Consider Downgrading Instead<\/span><\/h2>\nIf you\u2019re thinking about closing a card due to an annual fee or lack of use, downgrading might be a better option. Many issuers allow you to switch to a no-annual-fee version of the same card.<\/p>\n
By downgrading instead of canceling your card<\/a>, you get to keep your credit line open plus preserve your account history. You'll also avoid hurting your utilization ratio. This approach can be especially useful for older cards or those with high credit limits.<\/p>\nNote that downgrading can come with a trade-off. Depending on the issuer, you may become ineligible for future sign-up bonuses<\/a>\u00a0on that card. If you\u2019re planning to apply again down the road, make sure to factor that into your decision.<\/p>\nRelated:<\/strong> Top Credit Card Offers Available Now<\/a><\/p>\n![\"Capital](\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\")
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Credit Score<\/strong>Excellent, Good<\/p><\/div><\/div>
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For example, if you have $10,000 in total credit and carry a $2,000 balance, your utilization is 20%. Close a card with a $5,000 limit, and suddenly you\u2019re using 40% of your available credit.<\/p>\n
If you pay your balances in full, closing a card will have little to no impact on your utilization. However, if you carry a balance, higher utilization can signal increased risk to lenders and may lower your score.<\/p>\n
Keeping your balances low is one of the most effective ways to protect your score, especially if you\u2019re planning to close a card. It\u2019s just one of several habits that can help you manage your credit score<\/a> more effectively.<\/p>\n The length of your credit history also plays a role in your score. Closing a card doesn\u2019t erase your payment history. As long as the account was in good standing, it can remain on your credit report for up to 10 years and continue to factor into your score during that time.<\/p>\n However, once that account eventually falls off, your average account age could decrease, especially if it was one of your oldest cards.<\/p>\n Related<\/strong>: Ways To Check Your Credit Score for Free<\/a><\/p>\n Not every closure leads to a drop in your credit score. You may see little to no impact if:<\/p>\n In these cases, your overall credit profile could stay strong even without that card.<\/p>\n Closing a card is more likely to hurt your score if:<\/p>\n In short, the more that a card supports your credit profile, the more painful the impact will be when it\u2019s gone.<\/p>\n Related<\/strong>: What Is Considered a ‘Fair' Credit Score \u2014 And How To Improve It<\/a><\/p>\n If you\u2019re thinking about closing a card due to an annual fee or lack of use, downgrading might be a better option. Many issuers allow you to switch to a no-annual-fee version of the same card.<\/p>\n By downgrading instead of canceling your card<\/a>, you get to keep your credit line open plus preserve your account history. You'll also avoid hurting your utilization ratio. This approach can be especially useful for older cards or those with high credit limits.<\/p>\n Note that downgrading can come with a trade-off. Depending on the issuer, you may become ineligible for future sign-up bonuses<\/a>\u00a0on that card. If you\u2019re planning to apply again down the road, make sure to factor that into your decision.<\/p>\n Related:<\/strong> Top Credit Card Offers Available Now<\/a><\/p>\n $95<\/p><\/div> Excellent, Good<\/p><\/div><\/div>2. It can affect your average account age… eventually<\/span><\/h3>\n
When closing a credit card might not hurt your credit score<\/span><\/h3>\n
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When closing a credit card can have a bigger impact<\/span><\/h3>\n
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A Better Option: Consider Downgrading Instead<\/span><\/h2>\n
![\"Capital](\"https:\/\/cdn.nextinsure.com\/imaging\/opt\/dfed8cb4-d376-4c8b-aed4-1997afa3d66a.png\")
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![\"Chase](\"https:\/\/cdn.nextinsure.com\/imaging\/opt\/7e0262fd-5b61-413b-8b01-c8feec5b1d04.png\")
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![\"Citi](\"https:\/\/cdn.nextinsure.com\/imaging\/opt\/11937075.png\")
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