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The Points Guy believes that credit cards can transform lives, helping you leverage everyday spending for cash back or travel experiences that might otherwise be out of reach. That's why we publish a variety of editorial content and card comparisons: to help you find a great card to turn your goals into reality.
Our site may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened with our partners, and this may impact how or where these products appear. While we don't cover all available credit cards, our editorial team creates and maintains all of the analysis of these cards, and our content is not influenced nor subject to review by any credit card company, bank or partner prior to (or after) publication. Please view our advertising policy and product review methodology for more information.
Michelle Lambright Black, Founder of CreditWriter.com and HerCreditMatters.com, is a leading credit expert with over a decade and a half of experience in the credit industry. She’s an expert on credit reporting and scoring, credit cards, identity theft, budgeting and debt eradication. Michelle is also an experienced personal finance and travel writer. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).
Credit card writer Danyal Ahmed is an avid traveler, averaging about 100,000 aeronautical miles per year. He regularly applies that knowledge and his expertise in credit cards to his role as a credit card writer at TPG.
also contributed to this story
October 23, 2024 • 11 min read
The cards we feature here are from partners who compensate us when you are approved through our site, and this may impact how or where these products appear. We don't cover all available credit cards, but our analysis, reviews, and opinions are entirely from our editorial team. Terms apply to the offers listed on this page. Please view our advertising policy and product review methodology for more information.Editorial disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
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By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
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Quick summary
Canceling a credit card requires careful consideration of its impact on your credit score and rewards.
Closing an account can increase your credit utilization rate, potentially lowering your credit score and affecting your ability to qualify for new accounts.
It's important to redeem or transfer any unused rewards before closing a card, as these may be forfeited upon cancellation.
Alternatives to canceling include downgrading to a different product or seeking a retention offer to offset costs.
What to consider
Closing a card may affect your credit score by increasing your credit utilization rate and reducing the average age of your accounts.
Unused rewards in the account may be lost if not redeemed or transferred before cancellation.
Some offers mentioned in the article are no longer available.
What you'll miss from the article
A step-by-step guide to minimizing credit score impact and protecting rewards when canceling a credit card.
Generated by AI with support from our editorial team.
Update: Some offers mentioned below are no longer available. View the current offers here.
Deciding whether to cancel a credit card isn't a quick and easy decision — or at least it shouldn't be. It's best to weigh several factors to ensure that closing your account doesn't have unintended consequences.
Knowing when and how to cancel a credit card (and when to keep an account open) is critical to your long-term success as a points and miles enthusiast. This knowledge is just as necessary as learning how to take advantage of attractive new credit card offers.
While it's usually best to leave your credit cards open, if you have a reason for canceling a credit card (such as closing a joint account during a divorce or setting yourself up to potentially earn a sign-up bonus again later), the process doesn't have to be complicated. This guide outlines everything you need to know about canceling a credit card.
Does canceling a credit card hurt your credit?
Before you cancel any credit card, it's essential to ask the following questions:
Will closing this card raise your credit utilization rate?
Credit utilization describes the relationship between your credit card limits and balances. If closing a card causes your overall credit utilization to climb, your credit scores might decline. Lower credit scores could make it harder to qualify for new accounts and might lead to higher interest rates on new credit in the future.
Closing a credit card won't immediately affect your length of credit history (worth 15% of your FICO Score) by lowering your average credit age. Even after you close a positive account, it may remain on your credit for up to 10 years. Yet closing a credit card could raise your overall credit utilization rate and possibly lower your credit scores.
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To mitigate potential credit score damage, you should make a plan to keep your credit utilization rate low even after you close the account. One option is to pay off all your credit cards before closing an account, especially the one you're closing. To ensure the $0 balance is reported to the credit bureaus, paying early — a few days before your statement closing date — is best. Of course, if your overall credit utilization is already 0%, closing a card won't change that figure.
Another option is to open another credit card (if you plan to do so) before you close your other account. Let's say you close a credit card with a $15,000 limit. If you open a new account and receive the same or higher limit, your utilization shouldn't be affected negatively. However, you will have a new hard inquiry, and the new account itself may lower your average credit age. These actions might result in lower credit scores, at least temporarily, so weigh these factors in making your decision.
Canceling a credit card has implications and long-term consequences that require consideration. When you close a credit card, you effectively end your customer relationship unless you hold other cards with the same issuer.
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While it's not a bad thing, canceling a credit card can have implications for your credit report. Your overall line of credit across all credit cards is reduced, which increases your credit utilization, a major factor in determining a good credit score. If you decide to cancel a credit card that was your first card or one of your oldest, this can also decrease the average age of your overall accounts and affect your credit score.
After all these considerations, if you're still intent on canceling a credit card, here are all the steps you'll need to take.
Plan your exit strategy
If you've gone through the list above and you still want to cancel your credit card, it's time to plan your exit strategy. How to cancel a credit card is a systematic practice. You should remember two primary goals during this process — protecting your credit score and your rewards. You don't want to see your credit score plummet by just canceling cards, and you don't want to lose any points or miles you may have earned.
Protect your rewards
Once you close a credit card, any rewards you leave sitting in that account could disappear. You may be able to redeem those points you've earned first for travel and more. If you're not ready to spend the points yet, you can transfer them to an airline, hotel partner, or family member's account and buy gift cards or redeem them for cash or statement credits. But be warned — you won't get the most valuable redemptions with cash, statement credits or gift card purchases, often hitting a rate of 1 or less cent per point.
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Pay the balance
If you're a regular TPG reader, you know all about our 10 commandments for travel rewards credit cards. As such, this particular step should be easy. Since you've already been paying off your monthly balances, you get the maximum benefit from the points and miles you earn. Double-check to ensure your payment has been processed before canceling a card. Also, don't forget to use any credits on your card, such as the up to $200 annual airline fee statement credit offered by The Platinum Card® from American Express (enrollment is required).
Cancel recurring payments
Once you have decided to cancel a credit card, make sure to remove the credit card from any recurring bill payments. This is as simple as visiting the company's website or calling them to update your payment method.
Contact customer service
If you're 100% certain you want to cancel a credit card, you're ready to close your account officially. It's time to pick up the phone and call your card issuer. If your bank offers a "secure message center," there's a chance you may be able to close your account online. You can send a message asking to close a specific account, and your card issuer might handle the process electronically without you ever having to pick up the phone.
SHUTTERSTOCK
TPG director of content Summer Hull shares the following story about how she saved some time and canceled a credit card online:
I used the Citi Secure Message Center to close a card with less than 30 seconds of time invested on my end.
First, I logged into my Citi online account
Then, I went into the account I wished to close
Next, I selected the Message Center
I wrote a brief message asking to cancel my credit card ending in number XXXX
The next day, the account was closed, and I received a message back to that effect.
Summer explains that the online cancellation method worked well for her because she didn't want any retention offers and did not want to downgrade to a different account.
Dispose of your old card
Once you have successfully canceled your credit card, it's a smart practice to dispose of it properly to ensure no one will try to use it after it's been closed. If your card is made of plastic, as most cards are, then it's a smart practice to cut up the card before throwing it in the trash. If you have a metal card like the Chase Sapphire Preferred® Card (see rates and fees) or American Express® Gold Card, then request a prepaid envelope to be sent to you and mail back the canceled card for proper disposal.
Check your credit report again
Once the card is closed, rechecking your credit report is always a good idea. By law, you are entitled to a full credit report from the three major credit bureaus — Experian, Equifax and TransUnion — once a week for free. To get your complete reports, head on over to the annual credit report site and click the "Request your free credit reports" button.
Can you reopen a closed credit card?
Reopening a closed credit card varies by issuer, and the best way to know is to call the issuer. It's important to note that credit card companies are not required to open a closed account, so be prepared to hear "no."
Upon calling the customer service line, provide the issuer with your previous account number or other identifiers so they may locate your closed account. If you've changed your mind after closing the credit card, let them know you've changed your mind and explain why you wish to reopen it.
JOSE LUIS PELAEZ INC/GETTY IMAGES
You can always apply for the same card as a new applicant. It's important to note that most issuers' terms and conditions contain language regarding welcome offer eligibility, so if an insufficient amount of time has passed since the closure of your last account, you will be ineligible. This would also result in a hard inquiry on your credit report.
Now that we have covered how to cancel a credit card and its implications, the question is, should you cancel your credit card, or are there any alternatives that could benefit you?
THE POINTS GUY
Is there an annual fee on the account?
If not, there's usually little to no benefit to closing the account. On the other hand, keeping the card open might be suitable for your credit scores in the long run, especially if you manage the account responsibly.
Can you downgrade to a no-annual-fee option?
If you're closing a credit card because you're not getting enough value to offset the annual fee, consider asking the card issuer to downgrade your account. You might protect your credit by downgrading your card to a different product — such as from the Capital One Venture Rewards Credit Card down to the Capital One VentureOne Rewards Credit Card with no annual fee. Just know you'll be taking a hit when it comes to card perks.
Will the card issuer extend to you a retention offer?
Card issuers offer sign-up bonuses to attract new customers. Those same issuers may also be willing to extend a retention offer if you're considering canceling a card due to its high annual fee. If a retention offer is available, keeping a card you intended to close might make sense. A retention offer can include waiving the annual fee or a spending requirement to net you bonus points and miles.
Bottom line
Most times, canceling a card isn't a good idea because of the credit score hit, especially if it's one you've had for a long time. That card can remain on your credit report for up to 10 years, and you'll also take a hit on your credit score. However, by following the steps above, you can mitigate any effects on your credit score and report.
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
