The Game-Changing Reason To Avoid Closing An Old Credit Card

Making a purchase or payment with a credit card is a common American practice. With elite perks like travel insurance and access to airport lounges, many contemporary credit cards offer more than just credit. The allure of these added benefits may inform why, per Experian, Americans had an average of more than seven credit cards each in 2025. While managing that many active cards at once may sound overwhelming, opening and closing credit card accounts at random to suit your immediate needs can be pretty harmful to your finances — especially if you close an older card. In fact, doing this can tank your credit score. If you keep that old card active, though, it can boost your overall credit score by maximizing your credit history and keeping your credit utilization — the amount of credit you have used out of the total credit you have available — in check.

A good credit score helps lenders and credit agencies recognize your ability to handle debt, and those with a moderate-to-high credit score are likely to unlock credit at cheaper interest rates. Having a good credit score also means you can get approved for cheaper home loans, or low-interest private student loans. Together, credit history and credit utilization can account for nearly half the forces that inform your credit score. Although creditors weigh many additional factors when assessing a borrower's risk potential, keeping an older card active can illustrate your long-term dependability as a borrower and heavily impact the types of loans you'll be offered.

Closing old credit cards can drop down your average account age. A longer credit age acts as proof of your experience in managing debt and can make up around 15% of your FICO score. So, closing an old account can lower the overall score. 

Your credit utilization, on the other hand, is often reported to account for 30% of your FICO score. When you cancel an old credit card, you're essentially reducing your total available credit and increasing your credit utilization percentage. For instance, if you have two credit cards with a $1,000 credit limit each, and you have used $500 on one of them, your credit utilization stands at 25%. But when you close one of the cards, your total available credit amount reduces to $1,000 and your credit utilization spikes to 50%.

A preferable alternative to closing old cards can be to keep using them by making a small purchase every month and automating payments. This would help avoid late payments ruining your score, while keeping the benefits of a good credit history as well. Keep in mind that there can be instances when canceling an old card can still be a sound decision — such as when it charges a high annual fee or if the card is brand new. In other cases, however, keeping the old card active is one of the easiest ways to raise your credit score.