Should I Close My Credit Card Account?

In today’s world, having a credit card is almost a necessity. Credit cards’ convenience makes them a popular choice for people looking for cashless payment methods, and you can use them to make purchases online and in-person with almost every vendor in the world. 

But the biggest reason people use credit cards is that they let you make purchases that you can repay later. For example, if your car breaks down and you don’t have the funds to afford the repair, you can use your credit card and pay for the fix when you have the money.

Credit cards offer other advantages, too, like helping you save big on everyday purchases like groceries, gas, or even your phone bill. And when you use it regularly and pay your bills on time and in full, you can build your credit score.

Although credit cards come with a wide range of perks, having more than you should or using them irresponsibly can dramatically hurt your credit and finances. If you have multiple cards but struggle to stay on top of due dates, payments, and more, then closing some of these accounts may be in your best interest.

However, before you move forward, it’s important that you understand the pros and cons of closing a credit card.

Advantages Of Closing A Credit Card

Prevents You From Accruing More Debt

For all the benefits they have to offer, credit cards often trick people into racking up mountains of debt. When you have several cards, you can accidentally spend more than you should, resulting in a hefty balance when you receive your monthly statement.

If you have multiple credit cards and have trouble paying down your debt, consider picking a couple of cards and keeping the ones that promote good credit history. To close an account, contact the card provider. Most credit card issuers’ contact details are on the bottom of the card, but you can also find this information on their website. 

When you close, you will need to submit a request and pay back the entire balance before the company cancels your account. 

It Helps Avoid Identity Theft

Just because you keep your unused credit cards in your wallet doesn’t mean they aren’t 100% secure. There are still ways that thieves can steal your information. Closing accounts you don’t use or monitor can minimize your chances of someone stealing your identity.

It Helps Lower Your Debt

Having several credit cards raises your debt-to-income ratio (DTI), which is your total amount of debt compared to your income. The higher this ratio, the higher your chances of rejection when you apply for future loans. When you close inactive credit cards, your DTI drops and can raise your chances of approval.

Disadvantages Of Closing A Credit Card

It Shortens Your Credit History

Your credit history accounts for 15% of your overall credit score. The longer your record, the better. Leaving a credit card account open, even if you don’t use it, contributes to your history. 

When you cancel a credit card, it diminishes your credit history and can hurt your credit score. Frequently opening and closing accounts can also impact your record since it shortens the average length of time you have an account.

It Lowers Your Available Credit

Of course, closing a credit card means you no longer have access to the benefits it offered. But you may not know that it can lower the amount of credit you are eligible to receive. 

Imagine you have three cards with respective credit limits of $300, $400, and $500. If you close the two cards with the $400 and $500 credit limit, your monthly credit limit drops from $1,2000 to $300. If you use your credit cards to help pay for living costs, this reduction can seriously affect your budget and expenses.

It Can Hurt Your Credit Score

Closing a credit card can benefit your credit score in a few ways, such as lowering your DTI and making it easier to pay your debt. But it can also knock points from your score. Your credit history and credit limit both impact your score, and when you cancel an account (or severL0, it raises your credit utilization ratio. 

One strategy is leaving your account open but keeping the balance at zero. This trick allows you to keep your credit limit but reduce your credit utilization ratio, leading to a better credit score.


  • Creditmantri. “Pros And Cons Of Closing A Credit Card.” CreditMantri, CreditMnatriCreditmantri, 17 Aug. 2020,