Closing a credit card doesn’t erase its history, but it can lower your score in two ways: it removes that card’s limit from your available credit, and over time it can shorten your credit history. How much it matters depends on which card you close and what the rest of your file looks like. This page covers both effects, when closing an old card makes sense anyway, the alternatives, and the timing. It is one of our credit score guides. The steps for actually cancelling, including issuer contacts and product switches, are in how to cancel a credit card.
How closing a card affects your score
Closing a card works on two parts of your file at different speeds: the available credit you lose shows up on the next report, while the history effect comes later.
Less available credit, higher utilization
Your utilization is your balances divided by your total limits. Closing a card shrinks the total while your balances on other cards stay the same.
| Scenario | Balances | Total limits | Utilization |
|---|---|---|---|
| Three cards with $5,000 limits each | $3,000 | $15,000 | 20% |
| One of them closed | $3,000 | $10,000 | 30% |
| One closed, with $5,000 owing elsewhere | $5,000 | $10,000 | 50% |
The larger the closed card’s limit and the more you carry on other cards, the bigger the jump. Paying balances down first reduces the effect. Credit utilization explains the ratio and why the statement balance is what counts.
A shorter credit history, eventually
A closed account in good standing stays on your report for years. FCAC says closed accounts stay on an Equifax report “for up to 10 years”, and at TransUnion “information stays on your report for up to 20 years, even if you close the account.” The history effect therefore shows up when the account eventually drops off, and it matters most when the card was your oldest. FCAC’s example is a new card opened for a balance transfer: it lowers the average age of your accounts, and “If you close the old account, it may hurt your credit score even more.”
What closing doesn’t change
Your past payments on the card stay on your report, good or bad. Closing a card with missed payments doesn’t remove them; late or missed payments stay for up to 6 years.
Cards whose closure matters least and most
| Card | Effect of closing |
|---|---|
| A newer card with a low limit and no annual fee | Small: little history and a small share of your total limit |
| A card with an annual fee you don’t get value from | A trade-off between the fee and a usually modest score effect |
| Your oldest card | The history effect, once it drops off the report |
| Your highest-limit card | The largest jump in utilization |
| Your only credit card | Your file loses its only revolving account |
FCAC suggests considering keeping an account open if “it doesn’t have annual fees it’s easy for you to manage you can use it occasionally to keep it active.”
When closing an old card makes sense
- An annual fee that outweighs what you use. Paying a yearly fee to keep a small score benefit can cost more than it’s worth, especially when a no-fee card would do the same job.
- A joint card after a separation. Both holders of a joint account are responsible for the balance, including the other person’s new spending; how joint and additional cards work explains the liability.
- Fraud or a security breach on a card you don’t watch closely.
- Too many accounts to manage. A missed payment on a forgotten card can do more damage than closing it.
Alternatives to closing
- Switch to a no-fee card from the same issuer. A product change can keep the account, its history and its limit while removing the fee. Whether the account history carries over depends on the issuer, so it’s worth asking before switching. How to cancel a credit card covers product switches.
- Ask about the fee. An issuer may offer a fee waiver or a retention offer.
- Keep it, but put it away. Locking the card in the issuer’s app, or not carrying it, removes the temptation to spend while the account stays open.
- Use it occasionally. FCAC notes that some institutions charge an inactive account fee and “may even close your account if your card is inactive for a year.” A small purchase paid off right away keeps it active. FCAC also suggests that “To maintain or improve your credit score, consider keeping one account open with a low credit limit.”
Timing around a major application
Mortgage lenders and other lenders look at your report when you apply and may check it again before funding. A higher utilization ratio from a recent closure shows up at that moment, so closing a card shortly before applying for a mortgage, car loan or line of credit can cost more than closing it well beforehand or after the loan is in place. The same applies to opening new accounts; how long a hard inquiry stays covers that side, and improving your score before a mortgage covers the run-up to a mortgage.
If your score already dropped
A drop after closing a card usually comes from the utilization change and eases as balances fall. Why did my credit score drop helps rule out other causes, and what hurts your credit score puts closing in context with the other factors.
Sources
The figures and rules on this page come from these sources, last checked against them on September 25, 2026. How we check facts.
- Financial Consumer Agency of Canada: How long information stays on your credit report