Closing a credit card that is no longer used feels like tidying up. It removes two things a scoring model treats as positive, and the effect can be immediate.
Available limit disappears with the account
Scoring models look at balances relative to total available credit. Closing an account removes its limit from that total while leaving any balances on other cards unchanged.
The same spending therefore represents a higher proportion of a smaller total, and the ratio worsens without the borrower spending anything additional.
The effect is largest where the closed card carried a substantial limit relative to the rest, which is often true of an older account.
Age of accounts is a separate factor
Models consider how long accounts have been open, and a long history of managed credit is generally treated favourably. An old card contributes to that measure simply by existing.
Closure removes the account from the active set, though closed accounts in good standing typically remain on the file for a period before dropping off entirely.
When they do drop off, the average age of remaining accounts falls, which can produce a delayed effect long after the decision was made.
The mix of credit types also counts
Holding a combination of revolving and instalment credit is usually scored better than holding only one type, on the basis that it demonstrates a broader repayment record.
Closing the last revolving account leaves only instalment debt, which narrows the mix. The effect is modest but works in the same direction as the others.
None of these factors is decisive alone, but closures often trigger several simultaneously.
When closing is still the right call
An annual fee that is no longer earning its keep is a real cost, and paying it to protect a score is rarely worthwhile in itself.
Where a card presents a genuine temptation to spend, removing it addresses a behavioural problem that outweighs a scoring consideration.
Fraud risk on a dormant account that is not being monitored is a further reason, particularly where the details have been stored with merchants.
Alternatives that keep the limit
Downgrading to a version of the card without an annual fee usually preserves the account and its history, since the account number and opening date are often retained.
Keeping the card active with a small recurring charge paid in full prevents closure by the issuer for inactivity, which is a common outcome for unused accounts.
Where several cards are being closed, spacing the closures rather than doing them together limits how much available limit is removed at once.