How to Cancel a Credit Card
8 Min Read | Published: March 28, 2025
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Thinking of closing your credit card? See how to close your credit card responsibly and important considerations, like the potential impact on your credit.
At-A-Glance
- Canceling a credit card may negatively impact your credit score due to factors such as changes in your total available credit and credit history.
- If you’re thinking of canceling your card, you may want to consider alternatives like modifying your card, managing spending, or transferring balances to protect your credit score.
- If you choose to close a credit card, be sure to pay off your balance first, redeem any rewards, and confirm that your credit report correctly reflects the closure.
Increasing interest rates or higher fees might have you rethinking your credit card. Likewise, the temptation to overspend may be causing financial anxiety. Whatever your reasons, you may have a credit card that you’re thinking of canceling. But closing a credit card could have unintended consequences and may not be the right solution for every situation. Let’s explore how to close a credit card responsibly and the alternatives that may protect your credit.
Should You Cancel a Credit Card?
The right choice will depend on your situation. Consider one major aspect of your credit score: your credit utilization ratio, or how much of your credit you’re using as a percentage of your available credit.1 Having a credit card open means your total credit limit is higher which could benefit your overall credit utilization ratio.
For example, if you have a card with a $10,000 limit and carry a $7,500 balance, your credit utilization rate for that card is 75%. Later, your rate may be even higher if you carry other balances elsewhere. Lowering your overall balance to $100 or less may positively impact your score since, according to Experian, a credit utilization ratio in the single digits may be ideal.2
If you cancel one card and cut your credit limit to $5,000 while keeping a $4,600 balance, your credit utilization rate rises over 90%, which may negatively impact your credit score. Keeping cards open, even with $0 balances, may help maintain a lower credit utilization rate.
Even keeping this in mind, knowing how to close a credit card makes sense. For example, if your card issuer increases fees and the new terms are too expensive, canceling may be a good option.
Alternatives to Canceling a Credit Card
Deciding when and how to close a credit card without significantly impacting your credit score isn’t always straightforward. Understanding these alternatives for canceling a credit card account may help:
- Modify Your Card
If you need a card with better benefits, upgrading is an option. If high annual fees are the problem, your issuer have a no-fee or lower-fee version of your card. Both options keep your account open and help keep your credit utilization rate low. - Consider a Balance Transfer
Transferring your balance to a card with lower interest rates may help without creating a sudden jump in your credit utilization ratio. But balance transfers often come with fees, so weigh the cost against the potential savings. If a balance transfer isn’t an option, choosing a new card to open before canceling might keep your credit utilization rate intact as well.
If you’re still thinking about how to cancel a credit card account, take some time to weigh your options carefully. If you’ve decided that closing your card is the best move, there are some steps you’ll want to take to go about doing so responsibly.
How to Close a Credit Card in 6 Steps
These six steps may help avoid negative impacts to your credit score while making sure you’re not leaving any rewards or balances behind.
- Pay Off Your Balance
Pay off the balance in full before canceling to help avoid interest charges, fees, or less forgiving payment schedules. - Redeem Leftover Rewards
Redeem any remaining points, cash back, or miles. You can also read over the card’s terms to see if there’s an option to transfer rewards to another loyalty program or a linked bank account. - Cancel Automated Payments
Add a new payment method to any monthly subscriptions or automated charges attached to your card to avoid service interruptions or potential billing fees. - Call Your Credit Card Issuer
Call the number on the back of your card or check your issuer’s website to learn how to cancel a credit card online. Confirm the balance is $0, request that your credit report reflects that you closed the account, and note the date, time, and representative’s name for your records. - Safely Dispose of the Canceled Card
Shred your plastic card or cut it into the smallest pieces possible once you close the account. Your issuer may also send a prepaid envelope for you to return and have your card properly destroyed. - Check Your Credit Score
Check your credit score with credit reporting tools after closing your card. You may want to confirm that your credit report lists that you closed the account.
Finally, if you’re thinking of closing a credit card, but aren’t sure which one to close, you may want to opt to close the newer card rather than an older account you’ve managed well. Older credit cards with on-time payments and low balances may complement your credit profile more, so closing them might have a greater negative impact than a newer card cancelation would.
You can also learn how to remove closed accounts from your credit report so that closures don’t affect your credit standing for longer than necessary.
Frequently Asked Questions
If you can make regular payments and keep your balances low, then keeping unused credit cards may be better for your overall credit profile. Carefully consider the pros and cons of keeping your specific card open when making your choice.
It can be difficult to predict the exact drop your credit score will experience if you cancel a card. You may experience no significant changes at all, while other times, you may notice a sizable change.
Lenders may view card issuer-closed accounts as more concerning than those you close yourself, so it may be best to close your card yourself. For this reason, you’ll want to check that your credit report accurately reflects closures, specifying that you initiated the closer and not your card issuer.
The Takeaway
Your actions shape your credit score, so whether you cancel or keep your card, use the opportunity to build better credit habits, protect your score, and recover from any dips along the way.
1 “What Is a Credit Utilization Rate?,” Experian
2 “What Is the Best Credit Utilization Ratio?,” Experian
Liv Gillespie is a Philadelphia-based writer with a double M.A. in English Linguistics & Literature and Secondary Education. Her work focuses on personal finance.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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