I Let My Oldest Credit Card Die. I Was Shocked My Credit Score Didn’t Die With It

I accidentally let my oldest credit card die, and I survived to tell the tale. 

Don’t get me wrong. I was stressed when I realized I dropped the ball. In my years covering personal finance, I’ve always heard experts warn that closing a credit card can hurt your credit score. But I was pleased to discover nothing bad happened: My credit score didn’t drop by a single point. 

Closing or canceling a credit account could potentially damage your credit score because you’re losing a form of credit and increasing your credit utilization rate. Still, saying goodbye to a credit card can make financial sense in some scenarios, like if your card has a high annual fee or you need to separate from a partner with a joint account. 

It pays to know the potential risks and benefits of closing a credit account, whether or not you do so on purpose or by accident. Here’s what I learned from letting my oldest credit card close. 

What happened when I let my oldest credit card close

Seven years ago, I applied for the Discover it® Cash Back* card and was promptly approved with a $1,200 credit limit. It was my first credit card, and I used it religiously to build credit during college. 

Over the years, however, I’ve upgraded my credit portfolio and leaned more heavily on cards that better align with my spending habits. I tucked away my Discover card in a place where credit cards go to perish: the depths of my sock drawer. 

I forgot about the card for an entire year, and after sending me a notice in the mail, Discover closed my account due to inactivity. Some might call this irresponsible on my part, but I prefer to call it blissful avoidance.

There’s a handful of reasons why this turned out to be OK. Even though having a longer credit history and a mix of different types of credit can help boost your credit score, I already had a combination of student loans and other credit cards. And because the credit limit on my Discover account was low compared to my other cards, my overall credit utilization ratio didn’t go up. Finally, paying the balances on my other cards helped my payment history, which is the largest contributing factor to a credit score. 

I’ll break down below why all that matters. 

How canceling a credit card affects your credit score

When you close a credit account, it can affect a number of factors that contribute to your credit score, including your credit mix and credit usage, also known as your credit utilization ratio. Increasing your credit utilization ratio will potentially have the biggest impact on your FICO credit score. 

Your credit utilization ratio is the percentage of your total revolving credit you’re using at any given time, and it makes up 30% of your FICO credit score. If you’re using most of your available credit, that could mean you’re relying on your cards too much and can’t pay your balances. If you only use a small portion of your available credit, that generally indicates you’re keeping up with your monthly payments and can cover your expenses. 

When you close a credit card, your available credit decreases by the amount of that card’s credit limit, thereby increasing your overall utilization. How much of an impact depends on the rest of your available credit and how much you use of it.

Let’s say you have two credit cards, one with a limit of $10,000 and the other with a limit of $1,000. Closing the first card would likely have a much bigger impact on your credit score, because you’d reduce your available credit significantly. But if your balances are paid off and your credit limits are high, losing a card shouldn’t make a difference. 

Myth or fact: Does closing a credit card impact your credit history?

It’s a common myth that closing a credit card immediately hurts your credit score by shortening the length of your credit history. If your account is in good standing and your balances are paid off when your card closes, it will remain on your credit report for 10 years. So long as you have other lines of credit that you continue to pay on time and in full every month, you should have established enough positive credit history that closing one card should not make a huge impact down the road. 

Read more: Ask the Experts: Is It True You Should Never Close a Credit Card?

Alternatives to closing a credit card

If you have an old credit card you don’t use or a card with an annual fee you can’t justify anymore, you don’t have to cancel the account. Here’s what you can do instead: 

• Ask for a product change: If you want to cancel a credit card because it has a costly annual fee, ask the issuer to swap your card for one with no annual fee. Make sure you understand the terms and conditions for the new card and any potential changes to your credit limit.
• Upgrade your credit card: Alternatively, if your card has a barebones rewards structure and you want something with more pizzazz, ask your issuer about an upgrade to earn more rewards and perks. If the card charges an annual fee, make sure the card offers enough value to justify the expense.
• Keep the card open and make small recurring payments: If you have a credit card you don’t use (like me), keep the account open by putting a recurring charge on it monthly and setting up automatic payments. That way, your credit card issuer won’t close your account due to inactivity, and your streaming subscriptions get set on autopilot. 

If your credit card issuer closes your card due to inactivity, like it did in my case, you can call them and ask them to reopen the closed account. 

My credit score survived my mistake, so now what?

I had every intention of letting my Discover card stay open forever, but losing it isn’t keeping me up at night. I was able to offset any impact by being a cautious credit card user, with low balances on my existing lines of credit. My credit score didn’t drop because my finances were overall in good shape. 

Closing a credit card under the wrong circumstances can ding your credit score, but will it damage your score drastically? Probably not. Still, if you don’t want to take the risk, learn from my mistake and make your financial decisions consciously. Monitor your credit report regularly so you can see how it’s being affected and take measures to get your credit score back on track.

And read your mail, even if it’s from a credit card you were ignoring. 

*All information about the Discover it Cash Back has been collected independently by CNET and has not been reviewed by the issuer.