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Closing a Credit Card With Zero Balance

6 min read

Published April 2, 2025

Table of contents

Key Takeaways

Closing a credit card with a zero balance may increase your credit utilization ratio, decreasing your credit score.
In some situations, closing a credit card may still be the right choice for your financial well-being.
Before closing a credit card, try to take advantage of rewards, double-check your zero balance, and update payment methods.

There are plenty of reasons to move on from a credit card that has a zero balance. Maybe your credit card’s features no longer meet your needs or you’ve just finally paid off a card after months of hard work, for example. But closing your credit card account isn’t always the wisest choice, because it might negatively affect your credit score.

We’ll discuss when you may want to close a credit card with a zero balance, how to close your card, and some alternatives that might better serve your financial needs.

Decide if you should close a credit card with a zero balance

If you no longer want to use a credit card after you’ve repaid the balance, you may not want to rush to close it. Closing a credit card account with a zero balance might hurt your credit score by increasing your credit utilization ratio or decreasing the average age of your accounts. But that doesn’t mean there’s never a good reason to close your credit card. Consider the following scenarios:

You want to reduce your spending

If you’ve recently paid off credit card debt, you may want to avoid using your credit card to prevent overspending. Some strategies for limiting access to your card without closing the account include storing your card somewhere that’s difficult to access (like a safe with a combination held by a trusted loved one) or cutting your card up.

By making it hard to reach for your card, you may still benefit from perks like rewards and positive impacts on your credit score without as much risk of spending. If you choose this option, remove your card information from any virtual wallets.

Of course, keeping the account open may still pose too much temptation. In that case, there’s nothing wrong with closing your account to protect your financial well-being, even if your score dips a few points.

You don’t want to pay the annual fee

While some perks may seem great in theory, they’re not always worth a high fee.

If you find that your credit card’s rewards and features don’t add enough value to offset the annual fee, you may want to cancel your credit card. You don’t necessarily have to pay a fee to earn great rewards. Every Discover Card lets you earn rewards on every purchase, with no annual fee.

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You’re carrying a balance on another credit card

If you have high balances on multiple cards, you might consider closing your account with a zero balance to focus on paying off your other debts. However, this isn’t always the best move.

Your credit utilization ratio, the total portion of your available credit in use at a given time, accounts for about 30% of your FICO^® Score.¹ When you close a credit card account, your total available credit shrinks. If you’re carrying a balance, reducing your total available credit increases your credit utilization, which may hurt your score.

You need to dissolve a joint account

Sharing a credit card account with someone you no longer want to share an account with may be a recipe for disaster. If you have a joint account with an ex-partner or family member and no longer wish to be liable for their credit card activity, it’s often best to cancel the account.

You want a higher credit limit

Maybe you like your card, but you just need a little more wiggle room when it comes to your spending limit. In that case, you might not want to close your account right away. Instead, try requesting a higher credit limit from your credit card issuer.

If your income has increased, you’ve paid down debts, or you’ve managed your card responsibly for a while, you may qualify for a higher limit. Keep in mind that your credit card company may conduct a hard credit check, which might knock your score down a couple of points.

You plan on applying for a new credit card

If your credit card no longer meets your needs for any reason—maybe you want to earn more rewards or need a card without a foreign transaction fee—you might want to trade it for a better fit. You may want to wait until you’ve received your new credit card before closing your old account. By waiting, you can delay any reduction in your credit score from closing the card that might hurt your eligibility for a new card.

Did you know?

You may want to consider a new credit card with perks for new cardmembers. With Discover, we’ll automatically match all the cash back you’ve earned at the end of your first year. There's no limit to how much we’ll match.²

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Steps for closing a credit card with a zero balance

If closing your credit card seems like the best option, these steps can help you tie up all your loose ends and close the account.

Switch payment methods for any recurring costs. If you use your credit card to pay for a subscription, like a streaming service, or any monthly bills, make sure you update the payment method to a different credit or debit card. You may want to review previous account statements to make sure nothing slips through the cracks.
Redeem all unused rewards. Some credit card issuers may give you a few months to use your rewards after you close your account, but otherwise, you might lose them. If possible, try to make the most of the rewards and perks you’ve earned.
Double-check your balance. You can technically close a credit card account without paying it off. However, you remain responsible for the balance and the growing interest. Before you close your account, it’s a good idea to contact your issuer or check online to the outstanding balance.
Close your account. You may be able to close your credit card account online, through your credit card company’s mobile banking app, over the phone, or in person. As an extra safety precaution, request confirmation that your account has been closed.
Get rid of your card. Cutting up your credit card and distributing the pieces in different trash cans may keep your personal information safe. If you have a metal card, your card issuer may allow you to mail it back to the company for disposal.
Check your credit reports. A closed credit card account may remain on your credit report for up to 10 years. However, your reports should show that you’ve closed the account. You may dispute the error if they don’t reflect the change after a month or so.

Is it better to close credit cards with zero balance?

Closing credit cards with zero balance may be the right call in certain circumstances, like if you need to eliminate the temptation to spend or get out of a joint account. However, it’s not without consequences for your credit score. Ultimately, the best choice comes down to your priorities and unique financial needs.

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