How to cancel a credit card without hurting your credit score

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Maybe you hold a store credit card for a store where you no longer shop. Or the rewards on a travel credit card no longer match your lifestyle. From annual fees to high interest rates, there are many reasons you may want to cancel a credit card.

Even though canceling a credit card can temporarily reduce your credit score by reducing your available credit and the average length of your credit history, it sometimes makes sense to cancel a credit card that no longer serves you.

Think of it as making room for something better: heftier rewards, no annual fees, even a 0% introductory APR. There’s no need to let a card sit dormant in your wallet when you could be carrying something better.  But how do you cancel a card while minimizing the damage to your credit score?

  1. Close an inactive credit card ASAP

    If you’re not using a credit card, it’s probably in your best interest to close the account ASAP. Your credit card issuer will inevitably close an inactive account. Having an account closed by a creditor looks bad on your credit report and could significantly lower your credit score. It’s much better to show you are in control of your financial decisions and have your account listed as “closed at customer request.”

    Be aware that closing the oldest card in your wallet will reduce the overall length of your credit history, which will impact your credit score. Think carefully about whether you can keep your older credit cards active.

  2. Transfer any outstanding balance

    With that said, if you’re carrying a balance, you don’t want to close the card immediately. That will send your credit utilization ratio skyrocketing, which could cause your credit score to plummet. In addition, the credit card issuer may choose to raise your interest rates to the maximum allowable by law. Having already lost you as a customer, it will probably try to get as much money from you as it can.

    If you can’t pay off the balance straight away, transfer your balance to a new card. Do your research to find a card that fits with your budget and plans. Consider opening a new card with a similar credit limit to keep your credit utilization about the same. Some of today’s balance transfer cards, like Discover it® Balance Transfer, offers an intro 0% APR for up to 18 months on balance transfers (13.49% – 24.49% variable APR thereafter). Keep in mind it can take anywhere from a week to a month for a balance transfer to go through. Review the statements of your old card and your new card to ensure the transaction has been processed.

  3. Call or go online to cancel the old credit card

    Once the card balance is zero, you may be able to use the credit card company’s online messaging center to send an email and close the account. But it’s always best to call the number on the back of the card, instead. It’s possible the credit card company may extend an attractive offer that makes it worth your while to stay, like waiving the annual fee for a year, lowering your interest rate, issuing bonus rewards, or even providing perks such as special event tickets. Will the card remain dead weight in your wallet even with the added incentives? Then go ahead and cancel it.

    Whether you’ve canceled the card by phone or by mail, it’s best to follow up with a certified letter announcing that you have requested to close the account.

  4. Check your credit report

    Don’t just take the credit card company’s word for it, though. Make sure your creditor has reported your decision to the three major credit bureaus by checking your credit reports at Remember, the account should read “closed at customer request.”

    If there’s a mistake, don’t call the credit bureaus. Call the customer service number on the back of the card to request they correct the error. You may need to follow up with another certified letter.

    Keep an eye on your credit score for any sharp, sudden drops, which could indicate an error in closing the account and perhaps even fraudulent use of the card.

  5. Destroy the credit card to prevent fraud

    When you’re sure the account is closed, it’s time to get rid of that plastic once and for all. Ideally, run the card through a paper shredder that’s also designed for plastic and then throw away the pieces. If you don’t have a shredder, cut up the card with scissors and throw the pieces away in a few separate garbage bags, separating the numbers and name completely.