The basic steps to close a credit card
To close a credit card, call the customer service number on the back of your card, confirm you want to close the account, and ask the representative to note in your file that you requested the closure. Pay off any remaining balance first — most issuers will not close an account with an outstanding balance. After closure, you will receive written confirmation by mail within one to two weeks.
The entire process takes a phone call and a few minutes. The harder part is understanding what happens to your credit after you close it, and whether closing is actually the right move for your situation.
Key Takeaways
- Closing a credit card can lower your credit score because it reduces your total available credit and may increase your credit utilization ratio.
- Paid-off cards you no longer use can stay open at no cost, which protects your credit score better than closing them.
- If you close a card, your payment history on that account stays on your credit report for seven years, so the damage is temporary.
- Store cards and cards with annual fees are reasonable reasons to close; closing a card just because you are angry at the issuer usually costs you more than it costs them.
Why closing a card hurts your credit score
Your credit score depends partly on credit utilization — the percentage of your total available credit that you are currently using. If you have three cards with $5,000 limits each ($15,000 total) and carry a $3,000 balance, your utilization is 20 percent. If you close one of the $5,000 cards, your total available credit drops to $10,000, and the same $3,000 balance now represents 30 percent utilization. That shift alone can lower your score by 10 to 50 points, depending on how close you already are to your limits.
Closing a card also removes it from the mix of accounts that make up your credit profile. Credit scoring models reward diversity — having both revolving credit (credit cards) and installment credit (car loans, mortgages). Closing your only credit card or your oldest card has a larger impact than closing a newer one.
The good news: your payment history on the closed account stays on your report for seven years. The damage is not permanent. Your score will recover as you pay down balances and as time passes.
When closing a card makes sense
Close a card if it has an annual fee you do not want to pay and the issuer will not waive it. A $95 annual fee is a real cost with no benefit if you are not using the card. Call and ask if they will remove the fee first — many issuers will for customers with good payment history — but if they refuse, closing is the right choice.
Close a card if it is a store card you opened for a one-time discount and no longer need. Store cards typically have high interest rates and limited use outside that retailer. The credit score impact of closing one is usually smaller than the benefit of not carrying an unused account.
Close a card if you are concerned about fraud risk or identity theft and want to eliminate an account you cannot monitor. This is a legitimate security reason, even though the credit impact is real.
Do not close a card straightforward because you are frustrated with the issuer, because you want to punish them, or because you think having fewer cards looks better to lenders. None of those reasons outweigh the credit score cost.
What to do instead of closing: keeping the card open
If a card has no annual fee, the smartest move is usually to pay it off and leave it open. You can put it in a drawer and never use it again. The account will stay active on your credit report, your available credit stays high, and your credit score stays higher than it would if you closed it.
Some issuers will close accounts that show no activity for 12 to 24 months, but this is rare with major banks. If you are worried about this, use the card once or twice a year for a small purchase you would make anyway — a coffee, a tank of gas — and pay it off when ready. This keeps the account active without costing you anything.
If the card has an annual fee but you want to keep the account open for credit score reasons, call and ask the issuer to downgrade you to a version of the card with no annual fee. Many issuers offer this option. You keep the account history, the available credit, and the account stays open — you just lose any premium benefits like travel insurance or cash-back bonuses.
The timing and process for closing
Before you call, pay off any balance on the card. The issuer will not close an account with an outstanding balance — they will tell you to call back once it is paid. If you have a large balance, you can ask the representative to close the account once the balance reaches zero, but most will not honor this request. You have to call back after payment clears.
Call the customer service number on the back of your card during business hours. Tell the representative you want to close the account. They will ask why (you do not have to give a detailed reason — "I no longer need it" is enough), confirm your identity, and process the closure. Ask them to note in your file that you requested the closure. This matters if there is ever a dispute about who initiated it.
After closure, the issuer will send you written confirmation by mail. Keep this letter. It serves as proof the account is closed if you ever need to dispute something on your credit report. The account will disappear from the "open accounts" section of your credit report but will remain in your history for seven years.
What happens to your credit report after closure
The closed account will show on your credit report with a status of "closed by consumer" or "closed at consumer's request." This is better than "closed by issuer," which can signal financial trouble. The account will remain visible for seven years, and during that time it continues to show your payment history — which is good if you paid on time.
Your credit score will drop when ready after closure, usually by 5 to 50 points depending on how much of your available credit you just removed. The score will recover over time as you continue to pay other accounts on time and as the closed account ages. Most people see their score return to its pre-closure level within three to six months.
If you closed a card because you were carrying high balances and you now have lower utilization across your remaining cards, your score may actually end up higher than it was before, even accounting for the closure. The math depends on your specific situation.
Frequently Asked Questions
Will closing a credit card hurt my ability to get a loan?
It may, temporarily. Lenders look at your credit score and your available credit. Closing a card lowers both. If you are planning to explore for a mortgage or car loan in the next few months, it is better to wait until after you close the card, or not close it at all. If the closure is already done, wait three to six months for your score to recover before explore.
What if I have a balance on the card I want to close?
Pay it off first. You cannot close an account with an outstanding balance. Once the payment clears — usually one to three business days — call back and request closure. If you are paying off a large balance over time, you can keep the card open during that period and close it once the balance is zero.
Can I reopen a closed credit card?
Sometimes. If you closed the account recently, some issuers will reopen it if you call and ask. If it has been more than a few months, the issuer may treat a reopen as a new account, which resets your account age and can lower your score. It is usually easier to open a new card with a different issuer than to reopen a closed one.
Does closing a card remove it from my credit report?
No. The closed account stays on your credit report for seven years. It will show your payment history during the time it was open, which is why closing a card with a good payment history is not as damaging as closing one where you missed payments.
Should I close old cards or new cards first?
If you must close a card, close a newer one. Your oldest accounts have more weight in your credit score because they show a long history of responsible credit use. Closing a card you opened last year costs you less than closing one you opened ten years ago.