Does Cancelling a Credit Card Hurt Your Credit Score? It Might.

If you’ve recently paid off a credit card you might be looking forward to officially closing your account. But cancelling a credit card can hurt your credit score, even if you’ve successfully paid off the balance. A better approach would be to keep your credit card in a safe place at home. No need to keep using it, but canceling it hurts your credit score by decreasing your available credit and reducing your average credit history. The exception to this rule would be if your credit card has an annual fee. In that case, you’re better off cutting your losses and canceling your credit card. If you have an old credit card with no annual fee, your credit score will benefit from leaving it open.