Can we stop with the "closing a credit card tanks your score" myth

I see this advice constantly on this forum and elsewhere: "Don't close old credit cards because it'll tank your credit score!" And people treat it like gospel. Can we actually talk about what happens?

Closing a credit card CAN affect your score in two ways:
1. It reduces your total available credit, which increases your utilization ratio
2. Eventually (after ~10 years) it falls off your report and could reduce your average age of accounts

But here's what people miss: if you have zero or low balances on your other cards, the utilization impact is minimal. And the closed account stays on your report for up to 10 YEARS. Your average age of accounts doesn't change overnight.

I closed 3 cards last year that I wasn't using. My score went from 812 to 806. That's it. Six points. And it recovered within two months.

Stop hoarding credit cards you don't use because some Reddit post told you it would destroy your credit. If you have 2-3 cards with good limits and you pay them off monthly, you're fine.

I mostly agree with you but I think you're oversimplifying a bit. The impact of closing a card depends heavily on your overall credit profile.

Scenario A: You have 5 cards, total limit $50,000, carrying $2,000 balance. You close a card with a $5,000 limit. Your utilization goes from 4% to 4.4%. Basically nothing.

Scenario B: You have 2 cards, total limit $8,000, carrying $3,000 balance. You close a card with a $3,000 limit. Your utilization goes from 37.5% to 60%. That WILL hurt.

So the advice to "not close cards" isn't a myth per se -- it's oversimplified advice that's correct for some people and irrelevant for others. The nuance is what matters.

The bigger point is that credit scores are way less important than people think unless you're about to apply for a mortgage. If your score is above 750, whether it's 780 or 812 makes zero practical difference.

Accountant perspective here. Both of you are right to some degree.

The "never close a credit card" advice is overly cautious blanket advice that financial media repeats because it's simple and safe to recommend. In reality, closing a card you don't use is usually fine if:
- You have other cards with decent limits
- You're not carrying high balances relative to your limits
- You're not planning to apply for a mortgage in the next 6 months
- The card has an annual fee you don't want to pay

The part people don't talk about: having too many open cards can be its own hassle. Each one is a potential fraud vector. Each one needs to be monitored. If you have 8 cards and only use 2, that's 6 accounts you need to check for unauthorized charges.

I'd rather have 3 cards I actually use than 7 cards where 4 are sitting in a drawer "building credit."

i closed a card a few years ago and my score dropped like 30 points. so its not always just 6 points lol. but I also only had 2 cards at the time and the one I closed was my older one, so that was probably dumb in hindsight

it came back eventually tho. took like 4-5 months

I'll add one thing nobody mentioned -- if the card has no annual fee, there's really no reason to close it. Just throw it in a drawer and let it sit. Some banks will close it for inactivity after 12-24 months anyway, but until then it's free available credit sitting there helping your utilization ratio.

If it HAS an annual fee, that changes the calculation. I'm not paying $95/year for a card I don't use just to protect a credit score I don't need. Close it.

Bigger picture: Americans obsess over credit scores way too much. Your score matters when you borrow money. If you're not planning to take on new debt in the near future, whether your score is 780 or 815 is irrelevant. It's like obsessing over your GPA after you've graduated college.

This thread is really helpful actually. I've been holding onto a Citi card I never use because I was scared to close it. No annual fee so I guess there's no rush, but its good to know it wouldn't be the end of the world.

This is so true and I wish more people understood it. My husband and I bought our house 2 years ago and that's the only time our credit scores actually mattered for anything meaningful. Since then who cares if it's 790 or 810.

I think the credit score obsession comes from Credit Karma and similar apps constantly sending you alerts about score changes. Like yes thank you for telling me my score dropped 3 points, that is not useful information.