Close a card when you no longer use it and keeping it open costs you money, or when the card's terms have changed in ways that no longer match your spending
The right time to close a credit card depends on whether the card still serves a purpose for you. If you pay an annual fee and never use the card, closing it makes sense. If the card earns rewards on categories you no longer spend in, or if the issuer has cut benefits you relied on, closing it is reasonable. But if the card is free to hold and you use it occasionally, or if closing it would significantly lower your credit score, keeping it open usually costs you nothing and protects your credit profile.
The decision hinges on three things: whether the card has an annual fee, whether you actually use it, and what closing it would do to your credit history and available credit. A card with no annual fee and occasional use is almost always worth keeping. A card with a high annual fee that you haven't touched in a year is almost always worth closing.
Key Takeaways
- Close a card if it carries an annual fee you no longer want to pay and you have stopped using it or found a better card in the same category.
- Closing a card reduces your total available credit, which can raise your credit utilization ratio and temporarily lower your credit score by a few points.
- If a card has no annual fee, keeping it open costs nothing and preserves your credit history length and available credit.
- Contact the issuer by phone to close the card, pay off any remaining balance first, and ask the issuer to report the closure to the credit bureaus.
- After closing a card, check your credit report within 30 to 60 days to confirm the issuer reported it correctly.
Annual fees are the clearest reason to close
If your card charges an annual fee and you are not getting enough value from rewards, benefits, or perks to justify that cost, closing it is straightforward. Add up what you actually earned or saved in the past year — cash back, points, travel credits, purchase protections — and compare it to the annual fee. If the fee exceeds the value, the card is costing you money.
Some cards waive the annual fee for the first year, then charge it automatically in year two. If you received that first-year waiver and the issuer is about to charge the fee, you have a choice: close the card before the fee posts, or call the issuer and ask them to waive it again. Many issuers will waive the fee once if you ask, especially if you have been a customer for a while. If they refuse and the fee is substantial, closing the card makes sense.
Keeping a card open usually helps your credit score more than closing it hurts
Closing a card affects your credit in two ways. First, it reduces your total available credit, which can raise your credit utilization ratio — the percentage of your total credit limit that you are using across all cards. If you have $10,000 in total credit limits and $2,000 in balances, your utilization is 20 percent. Close a card with a $3,000 limit and your total available credit drops to $7,000, raising your utilization to about 29 percent. Higher utilization can lower your score by a few points.
Second, closing a card removes an active account from your credit history. Credit bureaus factor in the age of your accounts and the mix of open accounts. Closing an old card can shorten the average age of your accounts, which may lower your score slightly. Closing a newer card has less impact.
For most people, the score impact of closing a card is temporary — usually a few points that recover within a few months. But if you are planning to explore for a mortgage, car loan, or other major credit in the next three to six months, closing a card right before that process can work against you. If you are not borrowing soon, the impact is usually not worth worrying about.
Cards with no annual fee are almost never worth closing
A card that charges no annual fee costs you nothing to keep open. Even if you never use it again, it sits in your wallet or drawer without draining your account. Meanwhile, it preserves your available credit and keeps an account on your credit history. The math is straightforward: zero cost, some benefit. Keep it.
The only exception is if the issuer has made changes to the card that bother you — for example, if they eliminated a benefit you valued, or if they changed the rewards structure in a way that makes the card useless for your spending. In those cases, the card is no longer serving you, and closing it is reasonable even without an annual fee. But if the card straightforward sits unused, there is no reason to close it.
How to close a card the right way
Call the issuer's customer service number on the back of your card. Tell them you want to close the account. They may ask why, and they may offer to waive an annual fee or restore a benefit to keep you as a customer. Decide before you call whether you would accept such an offer, or whether you are certain you want to close.
Before you close, make sure you have paid off any remaining balance on the card. The issuer will not close an account with an outstanding balance, and you do not want to carry a balance while the account is being closed. If you have a balance, pay it down first, then call to close.
After you request closure, ask the issuer to confirm that they will report the closure to the three credit bureaus — Equifax, Experian, and TransUnion. Some issuers close accounts but do not report the closure right away, which can confuse your credit report. Getting confirmation on the call protects you.
Do not close the card by straightforward stopping use. Issuers sometimes close inactive accounts on their own after 12 to 24 months, but this is not may provide, and you have no control over when or how they report it. Closing it yourself ensures the closure is reported on your timeline.
Check your credit report after closing
Within 30 to 60 days of closing, pull your credit report from all three bureaus at annualcreditreport.com, the official free source. Look for the closed card and verify that the issuer has reported it correctly — the account status should show "Closed" or "Closed by Consumer" rather than "Open" or "Delinquent."
If the issuer has not reported the closure, or if they reported it incorrectly, contact them in writing and ask them to correct it. Keep a copy of your request. If the issuer does not fix it within 30 days, you can file a dispute with the credit bureau directly through their website.
When closing multiple cards, space them out
If you are closing more than one card, do not close them all at once. Closing multiple cards in a short period can create a larger dip in your available credit and your credit score. Space closures out by a few months if you can. This gives your credit profile time to adjust and your score time to recover between closures.
If you are closing cards because you are paying down debt or simplifying your wallet, this spacing also gives you time to make sure you are not missing any recurring charges that were tied to a card you just closed. Some subscriptions or automatic payments may still be charging to a closed account, which can create problems. Spacing closures out gives you time to catch and fix these issues.
Frequently Asked Questions
Will closing a credit card hurt my credit score?
Closing a card typically lowers your score by a few points because it reduces your available credit and may shorten your account history. The impact is usually temporary and recovers within a few months. If you are not explore for credit soon, the impact is usually not significant enough to worry about.
Should I close a card I don't use if it has no annual fee?
No. A card with no annual fee costs nothing to keep open and helps your credit by preserving your available credit and account history. Keep it in a drawer if you do not use it regularly. There is no downside to holding it.
What should I do with the physical card after I close the account?
Cut it up or shred it so it cannot be used. The account is closed, so the card will not work, but destroying it prevents confusion and ensures no one else can attempt to use it.
Can I reopen a credit card after I close it?
Some issuers will reopen a recently closed account if you call within a certain window — usually 30 to 90 days. Others will not. If you think you might want the card back, ask the issuer about their policy before you close. If you wait too long, you may have to explore for the card again as a new customer.
Should I close a card before explore for a mortgage?
No. Close cards at least three to six months before you explore for a mortgage. Closing a card right before a major credit process can lower your score at the exact moment a lender is reviewing it. If you want to close cards, do it well in advance.