Closing a new credit card account

Submitted by garcia.carlos86 on Fri, 10/05/2007 - 00:26

I recently just opened a new credit card account. I have not received my new card in the mail yet and I am already deciding that i want to close the account. Will closing this account hurt my score?

Hi Garcia,

Closing down your account might hurt your score. However you can go for it if you have an existing good score. Around 20 points drop might happen to your score if you close down an account.

Fri, 10/05/2007 - 06:09 Permalink

Can you guys explain why closing it would drop a credit score that much? I am curious as to why it would drop it at all, I am new to credit rebuilding and have alot to learn. thanks for your insight.

Sat, 11/03/2007 - 11:50 Permalink

Score should only drop if you close an old account. For new accounts, closing them before actually using them should have no impact. Be sure to send letter CMRR. Letter should read something like the following:

Your Name
City, State, Zip


Credit Card Company
City, State, Zip

Certified Mail# xxxx xxxx xxxx xxxx xxxx – Return Receipt

RE: Account #: xxxxxxxxxxxxxxxx

To Whom It May Concern:

Please close the above referenced account effective immediately. My records indicate the above account has never been activated. Therefore, this account cannot and has not ever been used and has a “zero” balance.

Please send me written confirmation that this account has been closed and the date the account was closed. Also, include proof that you've complied with section 623(a)(4) of the Fair Credit Reporting Act by reporting this account as "closed by consumer" to the national credit bureaus.

Please also be advised that I wish to communicate solely in writing. I can be contacted at the address listed above. Do not call me at any time or place.

I have sent this letter certified mail/return receipt to ensure that you receive this letter.

Your Name

Sat, 11/03/2007 - 20:15 Permalink

You would think if you did not use it and you close it they would have no activity to report. This is very odd to me that it would have any affect at all. I have never done this, I was always foolish and used the cards. I don't have any today, I paid two past ones off this year and working on the last one currently. I don't think I will ever apply for another card as long as I live. My bad experience has been my own fault, but I don't need the temptation.

Sun, 11/04/2007 - 00:42 Permalink

I have closed new accounts before, never thinking it would impact my credit. Gosh in college I didn't even apply for cards and I got them in the mail, some of them i activated and used, some of them i didn't activate at all and shredded them, then some I activated then never used and canceled. I wouldn't think this would have little if any affect on credit score. very interesting how this all works. Dwarfess, thanks so much for that letter!

Sun, 11/04/2007 - 00:56 Permalink

debtstinker, I found it odd that it would affect it at all if you didn't use it and cancelled out. I thought alot of cards have a time frame where you can cancel without any hassle but never thought it would be credit reporting issue at all.

Sun, 11/04/2007 - 01:05 Permalink

Yeah I thought so too good...they usually do give you a short time frame to cancel after activation and like so many have said it should not affect your credit if you never used it. the only thing i can think of is that when you activate your card, you're allowing your report to know that you have more available credit to use. kinda wish someone who works for a cc company could shed some light. i mean there are so many college kids who just get cards in the mail without ever signing up for them. at least that was my experience about 10 years ago. shoot, and this is no joke, we got a credit card in my dogs name and NEVER applied. i think the credit card companies have a tighter grip now who they allow to have them. bizarre! i guess its a blessing that with my low credit score i can't have many cards. i only have two and my available balances shot up an amazing amount after i proved that i was credit worthy and paid off the balances in full for 6 months. ironically i just applied for a card and was turned down. so you just never know how they work. i'm just glad ihave the 2 for emergencies and such. i never go beyond the 50% mark of my available balance as that can hurt your credit and try to pay them in full every month.

Sun, 11/04/2007 - 11:17 Permalink

I haven't had a credit card in years, don't plan on ever getting another one. This issue just really surprised me. I would not have given it a second thought if I was going to get a card.

Sun, 11/04/2007 - 12:42 Permalink

Yeah credit can be very tricky...good for you for not having that plastic...for our family it's a necessary evil, we really try to only use it for groceries which we pay off as soon as hubby gets paid, and emergencies. we don't use it for retail use at all. we just had to plop down $1000 to fix our jeep because it didn't pass pa inspection. if it weren't for my credit card (hubby's doesn't have enough credit) then we couldn't have paid for our jeep. so they're good and bad

Sun, 11/04/2007 - 21:45 Permalink

I know what you are saying good and bad, see I am not disciplined enough to let a card sit idol, I would be buying something and then be irritated when a month went by and it wasn't paid off. Sorry to hear you had to shell out that much to get your jeep fixed, that is another necessary evil, car repairs, car insurance, gas for the car, etc, etc, etc.

We don't have public transportation living in the sticks so I know what you are talking about. I could never live in the city anyway. I went to town today to buy the kid some much needed winter clothes, all those people drove me insane, after about an hour I had enough. I got alot of good deals, she is ready for winter.

Mon, 11/05/2007 - 00:19 Permalink

i'm just glad ihave the 2 for emergencies and such. i never go beyond the 50% mark of my available balance as that can hurt your credit and try to pay them in full every month.

Try to keep the balance at a 25% level. That really helps.

Actually your credit history adds to 15% of your total credit score. So closing an account shortens your history as well. If you have an old account paid in full let it stay because that will prove to be a good one for your report. If you have a closed account with derogatories then its wise to keep disputing it because it adds to your discredit.

Try not to apply for too many cards at the same time. That has a real negative impact on your score.

Mon, 11/05/2007 - 04:58 Permalink

good advice, I knew too many credit inquiries can drop your score, Laura, do you know if the when the derogatory ones fall off it raises your score, but what happens when the positives drop off, does your score go down?

Mon, 11/05/2007 - 11:48 Permalink

The reason to close new, unused and/or inactive credit cards is that although there is no activity, the credit is still available to you to use whenever you choose. Thus, not only are inactivated cc's included in determining your credit score, but also the number of open accounts (inactive cc's are considered open).

A prospective creditor could deny your application because the sum total of all of your credit limits (this is your available credit) is too high. What that point is, is a mystery . . . my score took a hit (815 to 796) when I went over 60k in available credit even though I have no lates (ever), and the sum total of all my debts is less than 5% of my available credit and .

Mon, 11/05/2007 - 16:01 Permalink
Anonymous (not verified)

that makes sense's good to close new accounts if they're not going to be used and sometimes it's good to close them if you have too many cards/credit already!

Mon, 11/05/2007 - 23:51 Permalink

Wow, that is a significant drop, and your credit has been good, this seems unfair. Wonder who came up with this wonderful system.

Tue, 11/06/2007 - 03:04 Permalink

Hi Dwarfess,

I really appreciate your information. I was never sure whether inactive cc's are considered open accounts or not. This is again a learning for me. :)


If a closed account is in good standing it will reflect on your report for nearly 10 years. However the drop of this account wont lead to drop in your score unless you have a derogatory on the report. A clean report is what we want so it should be our trial to keep all the accounts in good standing. :)

Tue, 11/06/2007 - 03:34 Permalink

Now I get it! if you're in good standing when you close your account that can be good, however, if through your time with the creditor you did not have a good account and close it that will affect you. a little confusing, thank you Laura and Dwarfess

Tue, 11/06/2007 - 19:30 Permalink

Hi Laura,

Found out the hard way about having too many open accounts. Since I have good credit, I can get any card I want. Decided to get one to use for upcoming college expenses for my youngest daughter. Chase issued with 10k limit and I was shocked to see my score drop so much.

Now I'm making sure I close newer accounts first. History is good, if its good! Better to keep open old accounts with good history, than startup new stuff.

I had a Discover Card account that hadn't been used in 5 yrs. Since it was issued in 1993, I closed the new Chase account and activated the Discover Card again.

Now...if only I could get my oldest daughter's credit cleaned up. There's a whole other world out there when it comes to credit repair. CA's are driving me nuts!

Wed, 11/07/2007 - 04:42 Permalink

As far as CA's are concerned you need to know the FDCPA well. Just being informed can save you from the dilemma. :)

Wed, 11/07/2007 - 05:05 Permalink

This is the truth, but it is like reading tax information, unless you are in a crisis most people don't read up on it, after it is too late. I got to know it only because I had a problem.

Sat, 11/10/2007 - 12:59 Permalink

Thats why we try to warn people here on the forum. But alas they come only once they are into trouble.

Wed, 11/14/2007 - 09:27 Permalink
WST (not verified)

How long does closing an account have a negative impact on your credit worthiness? Thanks. Great website...

Thu, 02/07/2008 - 10:38 Permalink

what i know is when you do close an account, it definitely hurts your credit score... but i never heard of a case such as this.. being that you want to close an account even before starting to use it.. thanks for enlightening dwarfess

"Score should only drop if you close an old account. For new accounts, closing them before actually using them should have no impact. Be sure to send letter CMRR. Letter should read something like the following"

Fri, 06/06/2008 - 17:52 Permalink

dwarfess is correct in the sense that if you have too many accounts it is better to close the new once than to close the old ones that has good credit history. Even if you have not used your old credit card yet, still it is better to keep the old card and start using it, at least to pay your monthly utility bills, but make sure that you repay the bills on time. This way you can have a good credit history built and you will be able to increase your credit score.

Sat, 06/07/2008 - 11:39 Permalink

I agree with anthony I will point out that you do want to make sure you dont put to much on the CC as your debt to credit ratio effects your fico

Sun, 06/08/2008 - 05:20 Permalink
Anonymous (not verified)

I don't have a clear idea of debt to credit ratio. can anybody explain it??

Mon, 06/09/2008 - 05:12 Permalink

You are correct CMBV. A better knowledge of the debt to credit ratio helps us to maintain your credit score better. However closing a paid off account implies closing a good credit history of your account and secondly lowering your credit score.

The debt to credit ratio is calculated on the basis of credit history. This ratio calculates your FICO score. The higher is your ratio, the lower is your score and lower is the possibility of getting credit at lower rates.

Mon, 06/09/2008 - 05:31 Permalink
marjorie (not verified)

I had my credit card for neally fourty years i hardly used it an still the balance not coming down i wanted to close it but i was told i get a bad credit i never ever had a bad credit in my life looks like its gonna take westpac to give me a bad credit, has anyone got any idea to what i should do, shall i cancel, i dont have a job cause of health reasons i had to finish work,

Tue, 07/29/2008 - 05:20 Permalink had a credit card for that long and the balance is NOT coming down? WOW!! What kind of card is it? I recently fell behind, on payments, on a credit card I had. I called several times to have them take payments from my account for the MISSING monthly payments. make a long story short, a few months went buy and no payments were debited from my account. Everytime I called them, it seemed no one could understand what I was trying to say or just transfered me to another department ( which i was disconnected..). I received a letter from them stating a judgement will appear, on my credit, from this CC . I called them after I received this letter. According to the rep I spoke to, there is no record of my account in their system. God..what a nightmare. How am I suppose to take care of this, if they have no record now?

Wed, 07/30/2008 - 09:46 Permalink


I have an atricle on my website that explains why it can take years and years to pay off balances and get out of credit card debt. YOu might want to read it *it's free, I dont even want your email address*

Anyway, you might consider transfering your balance to a card that has a lower or o% APR so that as much of your $$$ as possible goes to the prinicpal

Wed, 07/30/2008 - 20:20 Permalink
Dosie (not verified)

We have over 60K in credit card debt. One card alone as 31K on it. I was thinking of calling the company and negotiating a settlement even if it means closing this account. I know my credit score will drop temporarliy, but how can I get back up again after that?

Fri, 09/26/2008 - 14:27 Permalink

I have never seen them negotiate unless the debt was in the collection end of things. They may though, hang out for more answers on this.

Sat, 09/27/2008 - 03:49 Permalink

I think that they use settlement offers as a bargaining tools for a way to get their money back.

Sat, 09/27/2008 - 23:00 Permalink

Thats my belief too. I do not think they even try to settle a debt unless it is in collections just in case they can recover the full amount.

Sun, 09/28/2008 - 14:36 Permalink

What I think is that more and more credit cards would mean that although you have not maxed out your credit limit, you have more and more credit available for use. Now a prospective creditor will not consider you safe to offer a new line of credit because it may happen that after you have been given a new credit, you may also use and max out your existing credit limit on your cards too. Now doing this, you may not be able to keep track of your payments and become delinquent. So you should not apply for new credit cards if you already have one of two. Moreover, if you need to close any credit card accounts, it is always better to close the new ones, rather than closing the older ones, because older ones add up to your credit score.

Mon, 09/29/2008 - 09:55 Permalink

ERB how the heck do you get a -31 points on your magic points?
I would try to keep up all my payments and make them on time with my existing cards and forget about any new ones. Maybe you could even roll tehm over to one card with a zero percent interest rate and still make the payments you were so it would et paid off quicker. Once that card goes to lose its 0 percent try to find another until you can get them paid down.

Fri, 10/03/2008 - 02:07 Permalink


With all due respect you are fundamentally wrong. Available credit does not equal to debt. If person has a lot of credit it does not automatically mean that that person has more chances to be deliquent.

Indeed, some lenders, state "sufficient credit to income" as a reason to deny new credit, but usually when you call to credit analyst for reconsideration, you get new line of credit.

Sometimes, the same reasoning as yours is used by some subprime morgage lenders. In this case, just go away and use "good lenders" (big, national banks or CU's).

Now, how much debt is too much? Nobody knows.

I have choosen to have a lot of credit and my util. is less than 1%. Am I less creditworthy than person with fewer cards and /or less available credit.

I believe, in today financial enviroment, a consumer must have a lot of credit, only because lenders are scary and try to decrease their exposure. You never know when and by whom you are going to be AA'ed.

Fri, 10/03/2008 - 02:35 Permalink

Hi 1002543
I think you have misunderstood my post. I have never said that available credit is equal to your debt, but the fact that if you have more and more of available credit, there is a chance that you may avail that credit in future due to some reason or the other, after you opt for a new line of credit. Now with so much credit you may not keep track of the debt and may become delinquent (I have not said that you will be delinquent). That is the main reason why "sufficient credit to income" is one of the cause for denying new credit. Now as you said, some creditors still provide a new line of credit even with "sufficient credit to income" borrowers, but they provide it at a very high rates of interest.

Fri, 10/03/2008 - 03:36 Permalink
Jeff (not verified)

I applied for a credit card with a $90 annual fee. I received the card but did not activate it and intend to cancel it, because I believe I was mislead. Am I liable for the $90 annual fee?

Wed, 11/05/2008 - 16:25 Permalink

First of all that is a really high annual fee and I would stay away from those types of cards. If you did not activate the card then I would personally say you are not liable. I would call the credit card company and state to them you do not want this card and did not activate it. Tell them you were advised you are not responsible for the fee sue to nonactivation of the card and ask them to make sure you are not billed. If you do recieve a bill in the mail contact them again although I feel you will not recieve anything from them except for letters trying to change your mind about the opening of this card. To be on the safe side in a month or two pull your credit report and just ne sure they are not listed on there anywhere. Better safe than sorry. you will more than likely get more than one response here so check back because there will be more advice to come.

Wed, 11/05/2008 - 17:37 Permalink
JackieGG (not verified)

Does it hurt your credit score if the credit card company closes your account due to no activity?

Mon, 11/24/2008 - 00:39 Permalink

Hi Jackie
Yes, if your credit card is closed for not using it for a long time, your credit score will be affected. This is because credit score is largely dependent on your payment history which constitutes 35% in your score. Again length of the credit history constitutes 15% in your score. So if you have a good repayment history on your card, your credit score will get lowered. However, if you find that it is listed as "closed" in your credit report, ask the bureaus to change the status of the listing to "closed by grantor".

Mon, 11/24/2008 - 07:04 Permalink

Carol, How would one go about asking the credit bureaus to change the listing from closed to closed by grantor? Does this mean the issuer of the card like Discover closed the card and not the person theirself? How does this help if it shows the creditor closed the account? I would think it would have a negative effect in showing that they closed the card. It would make it look as if the debtor was not holding up to their end or not making timely payment..

Sun, 11/30/2008 - 04:46 Permalink

HI fireyone
You can always find the listing in the credit report whether it is listed as "closed" or "closed by grantor". If it is only listed as closed, then it may be that either you or the creditor has closed the account. But if it is listed as "closed by grantor", it means that you have not closed the account from your end and so the credit score will fall, but not much. Moreover, whether the account is closed for non payment or non utilization of your credit card will be reflected from your credit report itself.

Mon, 12/01/2008 - 10:02 Permalink
sharon smith (not verified)

I have paid off 3 of my 5 credit cards and dont know if to close them or leave them active, i dont intend to ever use them again, but have been told its not good to close them, why?

Mon, 01/19/2009 - 14:29 Permalink

Hi Sharon
Never close an existing credit card if it has a good credit history. If you close down a credit card, the entire credit history will be lost and since the credit history contributes about 35% in your FICO score, your score will also get reduced. However, if the credit history is not good in your cards and you are default on the cards which is reflected in your report, you should close them down. Moreover, if the credit cards have annual charges and you do not wish to use them any more, you should definitely close them down.

Tue, 01/20/2009 - 11:43 Permalink
Maxine (not verified)

I think this is bad business. What if you don't owe anything and don't want the libility of having a idenity theft happen? I am sorry. I do not agree and I want the Credit Reporting Companies to explain why this would happen.

Sun, 09/06/2009 - 18:43 Permalink

I agree that if you close them your credit score will definately suffer, but then again you will have to pay fees associated with keeping them open. So either way the decision is up to you. Do you want to lower your score or do you want to pay the fees if there are any?

Sun, 09/06/2009 - 19:44 Permalink