Many people assume closing an old credit card is a smart financial move. However, in many cases, it can actually hurt your credit score. Understanding how credit scores work helps you avoid mistakes that slow your progress.

Before you cancel an old card, it’s important to know how lenders evaluate your credit profile.

How Credit Utilization Is Affected

Your credit utilization ratio measures how much of your available credit you are using. Because this factor makes up about 30% of your credit score, it plays a major role in approvals.

When you close an old credit card, your total available credit decreases. As a result, your utilization percentage may increase—even if your spending stays the same.

For example:
If you have $10,000 in total credit and use $3,000, your utilization is 30%.
However, if you close a $5,000 card, your utilization jumps to 60%.

As a result, your credit score may drop quickly.

👉 Learn more about utilization here:
https://thecreditspecialists.com/how-paying-down-debt-improves-your-credit-score/

Closing Cards Can Shorten Your Credit History

Another important factor is credit age, which accounts for about 15% of your score.

Older accounts help show lenders that you can manage credit over time. Therefore, closing your oldest card can shorten your average account age.

In contrast, keeping older accounts open strengthens your profile and builds long-term trust with lenders.

Fewer Accounts Can Reduce Credit Mix

Credit mix refers to the variety of accounts on your credit report. While it’s a smaller factor, it still matters.

When you close accounts, you reduce the number of active trade lines. As a result, your credit profile may appear thinner to lenders.

👉 Related reading:
https://thecreditspecialists.com/fico-vs-vantagescore-what-you-must-know/

When Closing a Credit Card Does Make Sense

Although closing cards can hurt your score, there are exceptions.

You may want to close a card if:

• It has a high annual fee, but you don’t use it

• The account tempts you to overspend

• The card has poor terms and no benefits

Even then, timing matters. For example, paying down balances first can reduce the impact.

Smarter Alternatives to Closing Old Cards

Instead of closing an account, consider these options:

• Keep the card open with a zero balance

• Use it once every few months for small purchases

• Ask for a product change with the same issuer

• Pay down debt to lower utilization instead

These strategies protect your score while keeping your credit profile healthy.

Final Thoughts

In the long run, closing old credit cards can reduce your available credit, shorten your credit history, and raise your utilization. Because of this, the decision should never be automatic.

If you’re unsure what’s best for your situation, reviewing your credit report first is essential.

👉 Start with this guide:
https://thecreditspecialists.com/how-to-improve-your-credit-score-fast-complete-beginners-guide/

If errors or outdated accounts appear on your report, professional guidance can help you take the right next step.