Before you close an unused credit card, check what it costs you. A card with no annual fee costs nothing to keep and still helps your credit, so leave it open. Downgrade or close only the cards that charge a fee you don’t earn back or tempt you to overspend.
How much you use a card is the wrong test for closing it. The card you never touch is often the no-fee card you opened first.
That card is worth keeping open. Its limit adds to your total credit limit, which keeps down your credit utilization, the share of that total you’re using. And as it ages, it keeps lengthening your credit history.
A card with an annual fee charges you every year, used or not, so a $95 card you’ve stopped using costs $95 a year for nothing. A card that tempts you into extra spending costs money too, even with no fee. Those costs, not how rarely you use a card, are the reason to close one.
Sort each card by its annual fee, its age, its limit, and whether it tempts you. Then make one of three moves.
- Keep a no-fee card that doesn’t tempt you, and put one small recurring charge on it so the issuer doesn’t close it for sitting unused.
- Call about a fee card before closing it. Ask for a retention offer, such as a statement credit for staying, or a switch to a no-fee card on the same account.
- Take a card that tempts you out of your wallet and off the sites that save it, and close it only if you keep using it anyway.
If a card still has to go, close the newest one with the smallest limit. That removes the least from your total limit and leaves your oldest accounts open. Redeem its rewards first, since you can lose them when the account closes.
Say you have five cards. You’d keep the three oldest no-fee cards on small recurring charges and switch the $95 travel card you stopped using to a no-fee card. The store card you opened last year still tempts you after you put it away, and it has your smallest limit, so you’d redeem its rewards and close it.
Pull out every card this week and sort it before you cancel any of them.
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