If you’ve got a credit card sitting unused in your wallet—or tucked away in a drawer—you might wonder if it’s time to close the account. Maybe you paid off the balance and stopped using it. Perhaps it has an annual fee. Or maybe you just want fewer financial loose ends.
Closing a credit card may seem like a smart way to tidy up your finances, but it’s not always that simple. In fact, closing an account can affect your credit score, your available credit, and even your credit history length, sometimes in ways that don’t show up until later.
So, should you close that card or leave it open? Let’s walk through the pros and cons so you can make the best choice for your situation.
Why You Might Want to Close a Credit Card
People consider closing credit cards for all kinds of reasons. Some of the most common include:
- You don’t use the card anymore and don’t want to worry about it
- The card has a high annual fee or a high interest rate
- You’re trying to simplify your finances
- You want to reduce the temptation to spend
- The card was opened during a difficult time or with an ex-partner, and has emotional baggage
All of these are valid reasons to consider closing an account. But it’s also important to understand how doing so might affect your overall credit profile.
How Closing a Credit Card Can Affect Your Credit Score
When you close a credit card, you’re not just shutting down an account—you’re also changing the way your credit picture looks to lenders. Here are the main ways it can impact your score:
It Can Increase Your Credit Utilization Ratio
Your credit utilization is the percentage of your total available credit that you’re currently using. It’s one of the biggest factors in your credit score. Here’s an example:
If you have $5,000 of total credit across two cards, and you’re carrying a $1,000 balance, your utilization is 20 percent. If you close one of those cards and your available credit drops to $2,500, your utilization jumps to 40 percent—even if your spending hasn’t changed. Higher utilization usually leads to a lower credit score.
It Might Shorten Your Credit History
The length of your credit history matters. Lenders like to see long-term, consistent use of credit accounts. Closing one of your older cards may eventually reduce your average account age, especially if it was one of your first credit cards.
That said, closed accounts usually stay on your credit report for 7 to 10 years, so the impact isn’t immediate, but it can show up later.
It Could Affect Your Credit Mix
Your credit mix—meaning the variety of accounts you have (credit cards, loans, etc.)—is a smaller factor in your credit score, but still matters. If your credit card is your only revolving account, closing it could affect that mix.
Pros of Closing an Unused Credit Card
If you’ve weighed the effects and still think closing the card is the right move, here are some real advantages:
- One less account to manage: Fewer accounts mean fewer due dates, fewer statements, and less mental clutter—especially if you’re trying to simplify your finances or reduce the chance of missed payments.
- No risk of forgotten fees or fraud: Leaving a card open, especially one you never check, could expose you to annual fees or unauthorized charges you don’t notice until it’s too late.
- Reduces the temptation to overspend: If you’re working on curbing spending or sticking to a debt payoff plan, closing unused cards may help you avoid the urge to swipe when you’re feeling stressed or impulsive.
- Avoids annual fees: If the card charges a fee you’re not getting value from (and you can’t downgrade it), closing it could save you money in the long run.
Cons of Closing an Unused Credit Card
On the flip side, keeping that unused card open might actually help your credit health, especially if you don’t have many accounts. Here are some drawbacks to consider:
- It can hurt your credit score: As mentioned earlier, closing a card lowers your total available credit and may increase your credit utilization, both of which can lead to a drop in your score.
- You lose that line of credit: Even if you’re not using it, having that extra buffer can help in emergencies. Some cards even offer benefits like fraud protection or extended warranties that apply when you use them, even occasionally.
- You might miss out on no-fee perks: If your unused card doesn’t have an annual fee and isn’t hurting anything, keeping it open (and occasionally active) may help more than it hurts.
- It can impact future loan applications: If you’re planning to apply for a car loan, mortgage, or new credit card soon, it’s often smart to avoid closing accounts until after you’re approved. Lenders review your credit report closely, and a recent closure can change the math.
Questions to Ask Yourself Before You Close the Card
Still unsure? Run through this checklist:
- Does the card charge an annual fee or a monthly maintenance fee?
- Is it one of your oldest credit accounts?
- Do you have other credit cards or loans to keep your credit mix healthy?
- Will closing the card increase your overall utilization?
- Is there any emotional or behavioral benefit to closing the account, like peace of mind or less spending temptation?
If the card doesn’t cost you anything and helps your credit profile, it might be worth keeping. If it’s costing you money or mental energy, and you have strong credit otherwise, closing it might be the better choice.
Tips for Closing a Credit Card the Smart Way
If you do decide to close your credit card, here’s how to do it without causing unnecessary harm:
- Pay off the full balance first: Make sure the card has a zero balance before you close it. Any remaining balance can still accrue interest, and some issuers won’t let you close it until it’s paid.
- Redeem any rewards: Use up cash back, points, or miles so you don’t lose them.
- Call your issuer to request closure: Ask for confirmation in writing or by email. You can also check your credit report in a few weeks to verify it shows up as “closed at consumer’s request.”
- Monitor your credit report: After closure, keep an eye out for any errors or unauthorized charges. You can check your report for free at AnnualCreditReport.com.
- Leave other accounts alone: Avoid closing multiple accounts at once. Give your credit profile time to adjust if you plan to close more than one.
One Decision, Many Factors
Closing a credit card you’re not using might seem like a no-brainer, but it’s a decision that deserves a closer look. While there are good reasons to close an account, especially if it has fees or causes stress, it’s not always the best move for your credit health.
Think about your current financial goals, your credit history, and your overall money management habits. In some cases, leaving the card open—using it once every few months and paying it off—can help keep your credit strong. In others, shutting it down can give you clarity, control, and peace of mind.
There’s no one-size-fits-all answer. But the more you understand the trade-offs, the better you’ll be able to make a choice that supports your long-term stability.
