Should You Close Old Credit Cards You Don't Use?

Usually, No

Closing a credit card you don't use feels tidy. But in credit scoring, it usually hurts. Here's why:

It raises your utilization ratio. When you close a card, that credit limit disappears from your total available credit. If you have $10,000 in limits across three cards and close one with a $5,000 limit, your available credit drops to $5,000. Any existing balances now represent a much higher utilization percentage. Since utilization is 30% of your score, this can cause an immediate drop.

It can reduce your average account age. Length of credit history is 15% of your FICO score. Closing your oldest card can lower your average age. The closed account stays on your report for 10 years, but once it drops off, your average age may take a hit.

When It's Okay to Close

The card has an annual fee you can't justify. If you're paying $95-$550/year for a card you don't use and the issuer won't waive the fee or downgrade to a no-fee card, closing makes financial sense.

The card enables bad spending habits. If having available credit leads to debt you can't manage, closing the card protects you from yourself. Your financial health matters more than a few score points.

You're a victim of fraud on that account. Close it and open a new one.

Better Alternatives

Product change / downgrade. Most issuers let you switch to a no-fee version of the same card. You keep the credit limit, the account age, and pay nothing. Call and ask.

Sock-drawer it. Make one small purchase every 6 months to keep the card active, set up autopay, and forget about it. Some issuers will close inactive cards after 12-24 months of no activity, so a tiny recurring charge keeps it alive.

Use it for a single subscription. Put a streaming service or small recurring bill on the card with autopay. The card stays active with zero effort from you.