What happens to your credit when you close a card?

Closing a credit card can hurt your credit score in a couple of ways. First, it reduces your total available credit, which increases your credit utilization ratio if you carry balances on other cards. For example, if you had $10,000 in total credit and close a card with a $3,000 limit, your available credit drops to $7,000, making any existing balances look larger proportionally. Second, if the closed card was one of your older accounts, it can eventually shorten your average account age once it drops off your credit report, typically after 10 years. The impact varies depending on your overall credit profile, but closing cards generally does more harm than simply leaving them open with no balance.