How to close a credit card without hurting your score

Closing a credit card is typically a quick process, but there are some things to consider before you take that step. And if you’re thinking of closing a credit card account so you can open a new one, it’s important to take the right steps to make sure you get the right card for you.

How to close a credit card safely

There are many reasons to consider closing a credit card. For some, it may be the desire to avoid debt and high-interest rates, but other potential reasons include:

• Your credit score has improved, or your preferences have changed, and you want a better card.
• It’s a secured credit card, and you want your security deposit back.
• It has an annual fee, and you’re not getting enough value to make the cost worth it.

Depending on the card issuer, you may be able to close a credit card account by calling customer service, sending a secure message through your online account or even via live chat.

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Before you reach out, make sure the card has a zero balance and you won’t have any recurring transactions come off the account after you close it. While a closed account shouldn't approve any transactions, it is possible for one to sneak through without your knowledge.

If it’s a reward credit card, redeem your remaining rewards balance—though this isn’t necessary with airline and hotel credit cards because points and miles are managed by the airline or hotel chain, not the card issuer.

In some cases, the card issuer may offer something to stop you from canceling, such as a waived annual fee or a rewards bonus if you keep the card and spend a certain amount. Consider the offer, but if you’re determined to cancel, don’t let it sway your decision.

How to open a new credit card account

If you’re closing an old credit card account to open a new one, start by using a service to check your FICO credit score for free. Most rewards credit cards require good or excellent credit, which starts at a score of 670, so it’s important to know where you stand.

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Next, take some time to shop around and compare several credit cards to find the right fit. Think about which features are most important to you, such as interest rates, rewards, sign-up bonuses, and perks. Also, take some time to read customer reviews of the cards and the banks that issue them to make sure you’ll have a good overall experience.

Finally, if you have credit card debt and are looking for a new card to transfer it to, consider whether a personal loan may be a better way to consolidate your debt.

What to consider before you close a credit card

If you’re planning to close your account, weigh the potential drawbacks against the benefits before you take the next step.

Most importantly, closing a card will reduce your available credit, which can increase your credit utilization rate—how much you owe across all of your credit cards relative to your total available credit. High utilization rates can hurt your credit score, so if you have a high balance on one or more other cards, it may be better to work on paying down those accounts before you close one.

If that’s not the case or you’re planning on applying for a new card to replace the current one, it may not impact your score much.

Closing a card will also prevent that account from helping your credit score going forward, especially if you maintain a positive payment history. But as long as you pay your bills on time with other credit accounts, it won’t make much of a difference.