Updated: December 15, 2025 Keep or Close? The Unused Credit Card Dilemma and Your Credit Score
Overview
If you have a credit card you never use, closing it should simplify your life, right?
However, In the complex world of credit scores, this choice is the wrong one. Deciding whether to close an unused credit card or keep it open can impact your financial reputation, and in most cases, closing it is a mistake if your goal is to maintain a high score.
The Silent Damage of Closing a Card
To understand the risk, you need to focus on two key factors that make up your credit score:
- Credit Utilization Ratio (CUR): This is the percentage of your total available credit that you are currently using. Lenders prefer this ratio to be low, ideally under 30%. When you close a credit card, you reduce your total available credit. Even if your debt level stays the same, your CUR immediately shoots up, signaling higher risk to lenders and causing a dip in your score.
- Length of Credit History: Credit scores favor older, established accounts. If the card you close is your oldest one, you shorten the average age of your entire credit history. This change can pull your score down, diminishing the long-term benefit of years of responsible credit usage.
When to break ties
While keeping cards open is generally good for your score, there are a few valid reasons to cut ties:
- High Fees: If the card charges a high annual fee and you receive no value from it, the financial savings outweigh the minor risk to your score.
- Temptation: If having the card open leads you to overspend, closing it is a smart move for personal financial discipline.
- Security: If you are concerned about an unmonitored card being compromised, closing it can mitigate security risks.
The Smart Strategy: Keep and Maintain
If the card has no annual fee, keeping the unused credit card open is better for your credit score. Its limit quietly contributes to a higher total available credit, which helps keep your Credit Utilization Ratio low. It also ensures your long-term credit history continues to grow. To make an unused card work for you, use it for a small, single purchase once every few months, and then pay the balance in full immediately. This maintains the account’s activity and reinforces a positive payment history without incurring debt. Don’t let unused plastic tempt you into a move that could accidentally harm years of good financial behavior.
Conclusion
Closing an unused credit card negatively impacts your score by raising your Credit Utilization Ratio and shortening your credit history length. Keep old cards open to boost your available credit and protect your score’s age.
