How to cancel a credit card without hurting your score

By Matt Mayerle
Modified on May 8, 2023
is cancelling a credit card bad

Many Americans struggle every year to pay off their credit cards. According to Experian, the average credit card balance for an American consumer in 2020 was $5,315. How does your credit card usage stack up against this? And if you’re struggling with debt or personal loans is cancelling a credit card bad? CreditNinja wants to help you find the answers. 

The world of credit scores can seem complicated at times. Knowing how all of your past credit and borrowing habits affect you can also be complicated. But with credit cards, it’s usually fairly simple: less credit card usage and debt is a good thing for your credit score. 

Pros and Cons of Closing a Credit Card

There’s a lot to consider when deciding whether to cancel a credit card, or leave it open. Check out the following list of pros and cons to help you decide what’s right for you:

Pros of Closing a Credit Card

  • Having less credit cards open and available to you will mean less spending.
  • If you aren’t spending money on credit cards, then you will likely have less debt overall.
  • Closing your unused credit card can help to avoid fraudulent charges in the future.
  • Closing credit cards you’re not using may help you organize your finances better, and make it easier to track spending and payments.

Cons of Closing a Credit Card

  • Keeping a credit card open but not using it will lower your “utilization ratio.” Your credit score will benefit from a credit card utilization ratio below 30%. This means you’re only using less than 30% of the credit available to you. 
  • Keeping a credit card open may help you with emergencies like a broken down vehicle, or other unexpected bills.

Leave It Open with a Zero Balance

For anyone interested in improving their credit score, there are several important things to remember. Your credit score is calculated based on a few key factors:

  • Payment history — This is how consistent you’ve been with making payments on time. 
  • Amount/debts owed — This is the total amount of debt you currently owe. 
  • Length of credit history — How long your history of borrowing and making payments is. 
  • New credit — Whether you have any new or recent loans or credit cards. 
  • Credit mix — This weighs all the different types of credit you currently have. 

Your score can be heavily influenced by how much credit you’re using, compared to how much is available to you. This is called your “credit card utilization ratio.” It’s simply the percentage of your available credit that you’re actually using. 

Having a low credit utilization ratio will help to lower your overall credit score. This means that if you have a credit card with a zero balance, keeping it open and not using it could benefit you.

Cancelling Unused Credit Cards

It makes sense that if you aren’t using a credit card, or don’t need it, that you would cancel it. This may seem like the logical choice. Why keep a credit card open if you aren’t planning to use it? But as mentioned above, there is good reason to leave it open. 

That being said, if you don’t think that you’ll be able to resist the urge to use it, then it may still be a good idea to cancel your credit card. Cancelling a credit card may be the right choice for you, at least until you are able to learn better budgeting and spending habits. 

At CreditNinja, we recommend keeping these cards open. Anything you can do to raise your credit score is usually a wise decision. But what about if you have no credit? Learn more about that here and other topics like spending, budgeting, and credit cards in the CreditNinja Dojo! 


Credit Card Debt in 2021: Balances Slightly Decline – Experian

How are FICO Scores Calculated? | myFICO

What is a Credit Utilization Rate? – Experian

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