Updated: November 21, 2025 Think Twice Before Snapping That Plastic: How Card Cancellation Hits Your Score
Credit cards are excellent tools, but sometimes you decide one has to go.
Overview
Credit cards are excellent tools, but sometimes you decide one has to go. A common, sensible question arises:
Does closing a credit card actually hurt your credit score?
The short answer is yes, cancelling a credit card can affect your score, and the impact is often more significant than you might expect. This happens because closing a credit line messes with the key ingredients of your credit profile.
The Double Whammy: Utilization and History
Your credit score is built on several factors, and cancelling a card directly attacks two of the most important:
- Increased Credit Utilization: This is the number one reason to be cautious. Credit utilization is the percentage of your total available credit that you are currently using, and ideally, this ratio should be kept below 30%. When you close a credit card, you instantly eliminate that card’s credit limit from your total available credit.
- Shortened Credit History: Lenders value history because it proves you can handle debt responsibly over a long period. When you cancel an old card, especially your oldest account, you shorten the average age of all your credit accounts. This action suggests a shorter track record of responsible usage to the credit bureaus, which can negatively impact your score.
Minimizing the Damage
If you decide that a card absolutely must go, you can take smart steps to cushion the fall:
- Pay Everything Off First: Always ensure the balance on the card you are closing, and on all your other cards, is as close to zero as possible. This minimizes your utilization shock.
- Protect Your Oldest Card: Never close your oldest credit card if you can help it. If the fee is the problem, call the issuer and ask if you can downgrade the card to a no-fee version instead of cancelling it entirely.
- Monitor the Aftermath: Check your credit score after the cancellation. The drop may not be immediate, but it will show up within a billing cycle or two, giving you a chance to course-correct.
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Conclusion
Cancelling a card without understanding its role in your total credit picture is like deleting a good chunk of your financial history. Be strategic with every account you hold, because sometimes the best way to handle an old card is simply to keep it open and tucked away.
