Will closing a paid off credit card hurt my score?
Closing unused credit cards after paying them off can lower your credit score by reducing your total available credit and increasing your credit utilization ratio. This drop can hurt your chances of getting approved for a mortgage or other loans in the near future.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1Keeping cards open to maintain available credit and improve debt-to-income ratios
- 2Evaluating whether cards serve any ongoing purpose or product change utility
- 3Consulting others on whether closing cards impacts credit scores
- 4Keeping unwanted cards open to avoid potential credit score drops
- 5Contacting the issuer to downgrade to a lower-fee or fee-free card version
- 6Opening new credit lines to maintain aggregate credit limits and utilization ratios
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“I have a Southwest Visa that I'd like to close... it's a $230 annual fee, and we don't use it. However, we would like to buy a new home in the next couple of years, and I don't want my credit score to suffer.”source ↗
“My question is whether I should close these other credit cards now that they are paid off?”source ↗
Where this came up
People with this problem also raised
- 2Why am I still getting monthly fees after closing my account?
- 2Why is it so hard to close a merchant account?
- 2Is it better to pay off credit card debt or keep cash in savings?
- 6Which paper bills and receipts actually need to be kept?
- 3Bank closed my account and kept my money
- 2Refund sent to a cancelled or expired card