Should You Cancel an Old Credit Card

Deciding whether to cancel an old credit card can feel tricky. Maybe you don’t use it anymore, or perhaps it has an annual fee you’d rather skip. But before you close the account, it’s important to understand how it might affect your credit score and overall financial profile. Sometimes keeping that dusty old card open quietly works in your favor.

1. How Closing a Credit Card Affects Your Credit Score

When you cancel a credit card, two key parts of your credit score can take a hit: your credit utilization ratio and your average account age. Both are crucial for maintaining a strong credit history.

• Credit utilization: Losing a card reduces your total available credit, which can make your utilization ratio spike.
• Account age: Closing an old card shortens your average account history — a factor worth about 15% of your score.
• Impact level: The damage is usually mild but can matter if you’re applying for loans soon.

2. When It Makes Sense to Keep the Card Open

In most cases, keeping an old card open (especially if it has no annual fee) is the smarter move. It continues to support your credit history, utilization ratio, and account mix — all of which lenders like to see.

• No annual fee: If the card costs nothing, there’s little downside to keeping it open.
• Oldest account: Older cards strengthen your average account age.
• Emergency backup: Even if unused, it’s an extra line of available credit for emergencies.

3. When Canceling Might Be the Better Choice

Sometimes closing an old card is reasonable — especially if it costs more than it’s worth or tempts you into poor spending habits. If a card is dragging you down financially or mentally, closing it can bring peace of mind.

• High annual fees: If you’re not using the perks, it’s not worth paying for them.
• Overspending risk: If an unused card tempts you to splurge, consider closing it.
• Inactive or unused rewards: Points or benefits that expire quickly may not justify keeping the card.

4. Smart Alternatives to Canceling

If you’re hesitant about closing your card but don’t want to keep paying for it, there are middle-ground options. These let you maintain your account history without losing money or adding risk.

• Product downgrade: Ask your issuer to switch you to a no-fee version of the same card.
• Reduce limit: If you’re worried about temptation, request a lower credit limit instead of canceling.
• Use occasionally: Make a small purchase every few months to keep the account active.

5. How to Cancel a Credit Card the Right Way

If you do decide to close your old credit card, do it carefully to avoid unnecessary complications. A well-managed closure won’t hurt your credit as much as an abrupt one.

• Pay off all balances: Make sure the card shows a $0 balance before canceling.
• Redeem rewards: Use or transfer any points or cash back before closure.
• Request written confirmation: Get proof from your issuer that the account is officially closed.
• Monitor your credit: Check your report to ensure it’s listed as “closed by consumer.”

6. How Long a Closed Card Stays on Your Report

Good news — closing a card doesn’t erase its history immediately. Closed accounts in good standing can remain on your credit report for up to 10 years, continuing to support your score until they eventually drop off.

• Positive accounts: Stay for up to a decade, maintaining your history.
• Negative accounts: Typically fall off after seven years.
• Score effect: The impact fades gradually as your newer accounts mature.

Final Thoughts

Should you cancel an old credit card? Only if it’s costing you more than it’s helping. For most people, keeping an old no-fee card open strengthens credit history and flexibility. But if it adds stress, fees, or temptation, closing it carefully can still be a smart move. The right choice depends not on the card itself — but on how it fits into your financial story.