Yes, closing a credit card typically hurts your credit score — it reduces your total available credit, which raises your utilization ratio, and it may lower your average account age over time, both of which are negative scoring factors. The impact is usually modest, but can be significant if the card has a high limit or is one of your oldest accounts.
Two scoring factors are directly affected when you close a credit card: credit utilization and length of credit history. Both are penalized in most FICO models when you remove an account — particularly a large-limit or old account.
If you close a card with a $5,000 limit and your other cards total $10,000 in limits, you've cut your total available credit from $15,000 to $10,000. If you carry $2,000 in balances, your utilization jumps from 13% to 20%. Utilization accounts for 30% of your FICO Score, so this shift is the primary mechanism by which closing a card hurts your score — especially if you carry any balance at all.
Closed accounts remain on your credit report for 7–10 years and continue to count toward your average account age during that time. The score impact from losing account age is often overstated — the closed account doesn't immediately disappear from your report. But once it drops off (7–10 years later), the average age of your remaining accounts will fall. Length of credit history accounts for approximately 15% of your FICO Score.
If you're planning to apply for a mortgage, auto loan, or business loan in the next 6–12 months, closing a credit card — especially a high-limit card — can lower your score enough to move you into a higher interest rate tier. The timing cost can far exceed any annual fee savings.
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