It can, depending on the circumstances. Closing a card reduces your total available credit, which can raise your overall utilization ratio if balances remain on other cards, and closing your oldest card can also shorten your average credit history length, both of which are commonly weighted factors in credit scoring. That said, closing a card you're not using and have no ongoing need for isn't inherently harmful either, particularly if it carries an annual fee with no offsetting benefit, so the impact depends more on your overall credit profile at the time than on card closure being universally good or bad.
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Frequently Asked Questions
Does closing my oldest card do more damage than closing a newer one?
Generally yes, since your oldest card typically contributes most to your average account age, a factor that can influence your score more than closing a newer, shorter-held card.
Should I pay off the balance before closing a card?
Yes - any outstanding balance should generally be settled first, since closing a card doesn't eliminate the obligation to repay what's owed on it.
Is there a better time to close a card to minimise impact?
Closing a card when your other cards carry low balances, rather than high ones, generally minimises any utilization impact from losing that available credit.
Does downgrading a card instead of closing it avoid this impact?
Downgrading to a no-fee version of the same card, where offered, can sometimes preserve your credit history and available limit better than a full closure.
How can I decide whether to keep or close a card I'm not using?
Use the credit card finder to compare the ongoing costs and benefits of keeping the card against the potential credit profile impact of closing it.