Is Closing A Credit Card Bad? Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: recep-bg/Getty Images March 08, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Bankrate logo The Bankrate promise
At Bankrate, we have a mission to demystify the credit cards industry — regardless or where you are in your journey — and make it one you can navigate with confidence. Our team is full of a diverse range of experts from credit card pros to data analysts and, most importantly, people who shop for credit cards just like you. With this combination of expertise and perspectives, we keep close tabs on the credit card industry year-round to: Meet you wherever you are in your credit card journey to guide your information search and help you understand your options. Consistently provide up-to-date, reliable market information so you're well-equipped to make confident decisions. Reduce industry jargon so you get the clearest form of information possible, so you can make the right decision for you. At Bankrate, we focus on the points consumers care about most: rewards, welcome offers and bonuses, APR, and overall customer experience. Any issuers discussed on our site are vetted based on the value they provide to consumers at each of these levels. At each step of the way, we fact-check ourselves to prioritize accuracy so we can continue to be here for your every next. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. If you’re thinking about canceling a credit card, it’s important to know the potential benefits and risks associated with closing a credit account. While closing a credit card can be as simple as contacting your bank and requesting that it closes the card, there are a lot of variables to consider first. You should think about if the card has an outstanding balance, if there are alternatives to closing the account and how closing the card may affect your credit score. Does closing a credit card affect credit
It can, depending on how many other credit accounts you have open and whether or not you use those credit accounts responsibly. Knowing will help you better understand what the credit impact of closing your card might be. Here are two of the biggest ways in which closing a credit card affects your credit: Closing a credit card can increase your credit utilization ratio
makes up 30 percent of your FICO credit score. Since your credit utilization ratio is the ratio of your current balances to your available credit, reducing the amount of credit available to you by closing a credit card could cause your credit utilization ratio to go up and your credit score to go down. Many experts suggest consumers maintain a credit utilization at or below 30 percent. A high raises red flags for lenders because it show’s you’re using a higher amount of the credit you have available. Closing your oldest credit card can reduce the length of your credit history
The length of your credit history accounts for 15 percent of your FICO credit score. It’s worth noting that you probably won’t see the effect on your credit score right away, since closed credit accounts still contribute to your FICO credit score until they fall off your credit report—which could be as long as 10 years from now. How much does closing a credit card hurt your credit? It’s hard to say for sure. If you continue to use your other credit accounts responsibly by making on-time payments every month, maintaining a low and paying off your balances regularly, your credit score probably won’t take much of a hit. A person with a positive credit history is likely still going to have a positive credit history even if they close one of their older credit cards. When it makes sense to keep a credit card
Is closing a credit card going to majorly damage your credit score? Not necessarily, but that doesn’t mean it’s always your best option. Here are five reasons you shouldn’t close a credit card: Your credit score is right on the edge of the and you don’t want to risk dropping into the . You’re planning on and you don’t want to risk losing any credit score points. The credit card you’re thinking about closing is your oldest credit card and you don’t want to risk shortening the length of your credit history. You have a lot of outstanding balances on your credit cards and closing one card will to the point where it has a serious negative effect on your credit utilization ratio. You don’t really have a good reason for closing the credit card (you just don’t use it as often as you use your other cards). When it makes sense to cancel a credit card
Despite the potential downsides of closing a credit card, there are some very good reasons to close a credit card. Here are a few reasons you might want to close a credit card: You are having trouble using your credit cards responsibly—maybe you’re missing payments or you’re worried about going into that you won’t be able to pay off. You are separating from a partner and need to close a . You but you no longer shop at that store. You have an , but you no longer fly that airline and don’t want to pay the annual fee. You have a that charges a high annual fee and the card no longer makes sense with your lifestyle or spending habits. The interest rate on the card is too high. Perhaps you need to make a large purchase and carry a balance, so you’re interested in switching to a . You graduated college and you are ready to part with your in exchange for one that offers more rewards. The best way to close a credit card
If you’re ready to close a credit card account, it’s important to know . Here’s the best way to cancel a credit card: Pay off or transfer your outstanding balance
If you are closing a credit card account with an outstanding balance, you need to pay it off or first. Closing a credit card with a balance doesn’t actually work because you can’t fully close a credit account if you still owe money to your lender. You have to either or to one of today’s if you want to close a credit card with an outstanding balance. If you are closing a credit card that has a $0 balance, you can skip this step—but wait at least one full statement cycle after your card reaches a $0 balance to ensure that you aren’t forgetting about any final charges or interest that might come due. Use any remaining rewards
If you are closing a , make sure to redeem any rewards you’ve earned first; those points and miles are likely to disappear when you close the account. In some cases, you may be able to transfer your credit card rewards to another card in the same rewards system. If you have two credit cards that earn , for example, you can transfer your Chase points from the card you’re planning to close to the card you’re planning to keep open. Contact your credit card issuer
Once you’ve cleared out your balance and your rewards, it’s time to contact your credit card issuer. Call the number on the back of your credit card, confirm that your current credit card balance is $0 and request to cancel your account. The customer service representative may offer you an incentive to keep the account open—, for example, or the opportunity to earn bonus rewards. Other representatives may simply pressure you to keep the account open. You can decide whether to accept any incentives you are offered, but don’t let yourself be talked into keeping a credit card that you’d rather cancel. Follow up with a certified letter
After you cancel your credit card by speaking with a customer service representative, follow up your request with a certified letter to your credit card company. Restate your decision to cancel your credit account and request that they send you a letter confirming that your credit card has been canceled and that the account balance was $0 at the time of cancellation. Check your credit reports
Once you receive the letter from your credit card issuer confirming that your account has been canceled, review your credit reports with the (Equifax, Experian and TransUnion). Confirm that your credit card is no longer listed as active, and look for the note “closed at customer request” on your report. Destroy the credit card
will help protect you from and credit card fraud—and it will also help prevent you from accidentally trying to use the canceled credit card to make purchases. Alternatives to closing a credit card
If you don’t want to use a specific credit card for whatever reason, but also don’t want to lose the benefits that come with keeping the credit account open, you have other paths forward. Ask for a product change
If you are unhappy with your credit card, call your credit issuer and request to for another card offered by the same issuer. If you have a credit card with an annual fee, for example, ask if you can downgrade your card to a . You might even be able to swap a for a (or vice versa). Upgrade to an unsecured card
Instead of closing a , ask your credit issuer if they can upgrade you to an unsecured credit card. Some issuers upgrade you automatically after you demonstrate responsible credit use for a specific period of time. If your credit issuer is not able to graduate you to an unsecured card, they may be able to tell you what you can do to earn an upgrade in the future. Keep the card for small regular payments
If you don’t want to swap, upgrade or downgrade your credit card but aren’t currently using it, you can keep the account active without much effort. If you choose to keep the credit card open, put one small recurring charge on it every month (like a Netflix subscription) and set up so that your statement balance always gets paid on time. This way, your credit card remains active without much effort on your part. The bottom line
While there are pros and cons to closing a credit card, only you can decide whether the benefits outweigh the drawbacks. If you are worried about the negative aspects of closing a credit card, such as a temporary drop in your credit score, consider alternatives such as swapping your credit card for another card offered by the same issuer. However, if you close one card and continue to use your remaining credit cards responsibly, your credit history should remain positive. SHARE: Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Related Articles