What Happens to My Credit When I Cancel a Credit Card?

Credit Cards
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3
 Min read
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April 19, 2021

Your credit can be impacted by decisions you make such as how much money you borrow, how well you pay your bills as agreed, along with decisions on whether to open or close accounts. If you’re wondering “What happens to my credit when I cancel a credit card?”, you’ve come to the right place.

How Canceling a Credit Card Could Impact Your Credit

It might seem logical to cancel a credit card that has a zero balance that you don’t need to use immediately. You might even feel that closing the account is a good idea so that you don’t overspend. Before you rush to cancel the card, think about how it might impact your credit. 

Without the available credit on that card, your credit utilization appears higher since you have less available to borrow. Closing a revolving account can also have a negative impact on your credit score because the average age of your remaining accounts may be reduced.

Are There Good Reasons to Cancel a Credit Card?

There are some good reasons to go ahead and cancel a credit card account. Examples of these reasons include:

  • You’re paying an annual fee
  • You feel you won’t be able to resist the urge to use the available funds
  • It’s a secured card and you’re replacing it with an unsecured rewards card
  • Your needs have changed so the rewards benefits no longer appeal to you
  • You’re getting a divorce and it’s a joint account with your ex
  • You decide to cancel a credit card after fraudulent activity instead of being issued a new card 


If you’re carrying a balance, a card with a high-interest rate may be something you don’t want to keep, especially if your credit has been improving and you’re getting better offers. You’ll need to pay the balance in full before closing the account.

What to do if You Decide to Cancel the Credit Card

If canceling the card seems like the best decision for you, contact the creditor and let them know you’d like to close the account and that you’d like for them to confirm in writing that it’s been closed. Ask them to note that the account was closed at your request. 

If you’ve been paying the bill through automatic payment, be sure to cancel it. Don’t forget to destroy the card. If instead, you decide to keep the account open but not use it, store the card somewhere safe so that you won’t be tempted to use it.

Check Your Credit Report

A couple of months after you cancel a credit card, check your credit report and make sure the account is being reported as closed. If it’s not, get in touch with the credit card company and let them know that you previously requested the account be closed and that it’s reporting incorrectly.

Having a closed account report as still being open is a common error on a credit report. Any inaccuracies on your credit report should be disputed promptly. Dovly makes it as simple as possible to fix and maintain your credit using our automated credit repair engine. Contact us today to find out more.


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