How To Cancel a Credit Card Without Hurting Your Credit Score

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There are plenty of reasons to cancel a credit card. But canceling can have a negative impact on your credit score, so you’ll need to do more than just cut up the card and throw it out if you don’t want to ding your score in the process. The good news is you can minimize the damage or, in some cases, avoid it entirely. Here’s how to cancel a credit card without damaging your credit score.

When It Makes Sense To Cancel a Credit Card

Any number of circumstances might warrant canceling a credit card. For example:

  • Your credit card rewards aren’t worth the annual fee
  • You’re carrying a balance on a card with a high interest rate
  • You have more credit cards than you need
  • You’re ready to trade up from a store card to a bank card, or from a bare-bones bank card to a rewards card
  • Having a credit card makes it difficult to resist overspending

An online credit score simulator can help you determine what effect certain actions, including canceling a credit card, might have on your score. In addition to helping you decide whether canceling is worth a lower score, a simulator can show ways to offset the impact, such as by opening another card, increasing a credit line or paying down a balance.

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Deciding Which Credit Card To Cancel and Which To Keep

When you’re deciding which card to cancel, think about how each of your cards affects your credit score. Here are some tips to follow so you can choose the right card to cancel:

  • Don’t cancel your oldest card. Fifteen percent of your credit score is based on the length of your credit history, which includes the age of each account and the average age of all your accounts combined. Canceling your oldest card will reduce the average age. And when it eventually drops off your credit report, it’ll make your credit history appear shorter than it is and potentially damage your overall score.
  • Don’t cancel cards with the largest credit limits. Cards with larger limits help you keep a low credit utilization rate. Your utilization rate is the difference between the amount of credit you’re using and the total amount you have available, and it makes up 30% of your credit score. If, for example, you have $10,000 worth of credit across your credit lines and have total balances of $2,500, your utilization rate is 25%. Cancel a card with a $5,000 limit and your utilization rate jumps to 50%.
  • Don’t cancel a card simply because you haven’t used it. Unless having it causes a negative consequence, you’re better off keeping the card to maintain a favorable credit utilization rate. Even better, use it for a small purchase every now and then and pay off the balance the right way — unless, of course, you’re carrying a lot of debt.
  • Don’t close bank cards before retail cards. Major bank cards often have better rates, lower fees and higher credit limits than retail cards. Plus, retail cards that aren’t co-branded can only be used at a specific retail store.
  • Don’t cancel your only bank credit card unless you have other types of credit. Credit mix accounts for 10% of your credit score. In the absence of a sufficient mix of account types — such as an auto loan, a mortgage loan and a store account — canceling your bank card can reduce your credit score.


You should also avoid canceling cards when you’re planning to apply for a large loan. In the event that canceling a card negatively impacts your credit utilization rate or the length of your credit history, and therefore your score, it could make you ineligible for the loan. Wait until after you’re approved for the loan to close a card.

How To Cancel a Credit Card

Simply paying off your credit card won’t cancel the card or your account. Follow these steps to cancel a credit card correctly:

  1. Redeem any outstanding rewards before you cancel your card. Otherwise, you will likely forfeit them.
  2. Stop any automatic payments that use the card. Set up a different card or your bank account as the new payment method.
  3. Contact the credit card company to find out your pay-off amount. Although your statement shows your balance as of the date the statement was prepared, you might have accrued additional interest or fees since then.
  4. Pay off your card if possible. It’s usually possible to close an account when you have a balance, but don’t forget to continue making the credit card payments.
  5. Call the credit card company. Tell the representative that you want to close your account. Ask that the credit card company report to the credit bureaus that the account was closed at the customer’s request.
  6. Follow up your phone call with a written letter sent via certified mail. In the letter, state that you want to close the account and request that the creditor reply with written confirmation that the account was closed at your request with a $0 balance.
  7. Check your credit report to make sure the account is closed. You should do this approximately 60 days after you cancel your credit card. Verify that the report indicates that the account was closed at the consumer’s request instead of stating that it was closed by your creditor. Accounts noted as closed by a creditor can cause a negative impact on your credit.
  8. Destroy your card. You should do this once you’ve verified that it has been canceled.

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Good To Know

You can request a free credit report from each of the three major credit bureaus — Equifax, Experian and TransUnion — once a year through All three of these credit bureaus are also offering free weekly credit reports during the COVID-19 pandemic.

Other Considerations

It’s important to keep open cards that are most beneficial to you, just as it’s important to close those that aren’t. Here are some additional tips to consider before closing credit card accounts:

  • Don’t cancel cards that are valuable to your lifestyle. For example, a card with a higher annual fee might be worth keeping if it provides you with valuable rewards. If you’re in the habit of carrying a balance, a card that features a low interest rate might be worth keeping open.
  • Ask for an incentive to keep your account open. Sometimes you might want to keep a credit card account open if you could tweak the terms or fees a bit. You can call the credit card issuer and say you’re considering closing the account due to the APR or high annual fee. Many credit card companies offer a bonus offer or other incentive to get their best customers to keep their accounts open, and you might find the offer compelling enough to change your mind.
  • You can transfer a balance without closing the account. Although transferring a card’s balance to a different card with lower interest might seem like a great solution, it could ding your credit if you then close the account. Consider transferring the balance to a card you already have and keep both accounts open. Or transfer the balance to a new card, but quickly pay down the debt. This could actually boost your score by reducing your credit utilization rate.

Cynthia Measom and Michael Keenan contributed to the reporting for this article.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

About the Author

Daria Uhlig is a personal finance, real estate and travel writer and editor with over 25 years of editorial experience. Her work has been featured on The Motley Fool, MSN, AOL, Yahoo! Finance, CNBC and USA Today. Daria studied journalism at the County College of Morris and earned a degree in communications at Centenary University, both in New Jersey.

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