Cancel Credit Card: How to Do It Right and Protect Your Credit Score

When you cancel a credit card, the process of closing an active line of credit with your issuer. Also known as closing a credit account, it can help you avoid fees or simplify your finances—but it can also hurt your credit score if done wrong. Many people assume closing a card is harmless, especially if they don’t use it much. But your credit score doesn’t care about your intentions—it cares about numbers: how much credit you have, how much you’re using, and how long you’ve had it.

Here’s what actually happens when you cancel a credit card: your total available credit drops. That can spike your credit utilization, the percentage of your total credit limit you’re using. If you owe $2,000 across two cards with a $10,000 limit, your utilization is 20%. Cancel one card with a $5,000 limit, and now you’re at 40%—a red flag for lenders. Even if you pay in full every month, this ratio matters. Also, if the card you’re canceling is one of your oldest, you’re shortening your credit history, which makes up 15% of your score. That drop isn’t always obvious, but it shows up in your report. And no, paying off the balance isn’t enough—you must officially close the account with the issuer. Some people think if they stop using it, the bank will close it. That’s not true. Banks keep inactive cards open because they make money from annual fees or hope you’ll start spending again.

So when should you cancel? If the card charges a yearly fee you don’t need, or if you’re tempted to overspend on it, canceling makes sense. But don’t cancel your first card or your highest-limit card unless you have another one lined up. Always call the issuer—not just log in and click a button. Ask if they can downgrade it to a no-fee version instead. That way, you keep the account open, preserve your credit history, and avoid the utilization spike. If you must cancel, do it after paying off all balances, and wait until after you’ve applied for any major loans (like a mortgage). And never cancel multiple cards at once. Space it out. One at a time.

Below, you’ll find real advice from people who’ve been through this—whether they lost points by closing a card too soon, saved money by ditching a fee-heavy card, or fixed their credit after a mistake. These aren’t theories. These are steps, stories, and fixes that actually worked.