The credit card has been sitting in your drawer for three years. You never use it. The rewards are mediocre. It takes up space in your wallet when you do carry it.
Why not just close it and simplify your financial life?
A Common Mistake
This line of thinking leads thousands of people to make a decision that quietly damages their credit scores. What feels like responsible decluttering is often a costly mistake.
Closing old credit cards can hurt your credit score in three distinct ways:
- Credit utilization — Your utilization ratio spikes immediately
- Credit history — You eventually lose years of positive history
- Credit mix — Your profile becomes less diverse
The Irony of "Doing the Right Thing"
Many people close unused cards because they think:
- "I should only have credit I'm using"
- "Fewer cards means less risk"
- "It will simplify my finances"
These instincts make sense in everyday life. But credit scoring doesn't work on intuition—it works on math.
An unused credit card with a zero balance isn't a liability. It's actually an asset that's quietly working in your favor every single month.
What You'll Learn
In this course, we'll break down:
- Exactly how closing a card affects your utilization ratio
- The delayed impact on your credit history (and why it catches people off guard)
- How credit mix factors into the equation
- When closing a card actually makes sense
- Alternatives that let you simplify without hurting your score
By the end, you'll be able to make informed decisions about which cards to keep and which to close—and avoid the common mistakes that cost people points they've spent years building.
Key Takeaway
Closing unused credit cards often feels like the responsible choice, but it can hurt your credit score in multiple ways. Understanding the mechanics before you act can save you from an unnecessary score drop.