this post was submitted on 25 Jul 2026
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Part of the credit score algorithms are the amount of unused credit you have.
This makes some sense: other companies have been willing to extend you credit, and you're not using it. Therefore your less likely to default (because you have more of a buffer if you need to spend), plus if you do, there are more lenders to shoulder the pain.
So when you close a card, you're doing the opposite: you're reducing the amount of unused credit you have. So your score goes down.
Footnote 1: you can offset the hit to your credit score if you can convince another card to raise its limit.
Footnote 2: if you have NO credit cards after closing your last card, then they have no insight (or at least far less) about how your finances are going because they can't see that you're regularly paying some other company. Additionally another part of the algorithm is how old your oldest account is if you have none than that part of the score is zero.
"Fun" aside: when I left for college, my father added me to his Amex (for emergencies) and that started my credit history. But he'd had the card since before I was born. For the next several years I carried a credit card that said "Member Since" a date well before I was born (and a credit history that said the same too).