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Will American Express Card Cancellation Hurt My Credit Score?

In many cases, closing a credit card account will lower your credit score. American Express generally advises against canceling credit cards with a low or zero balance because it can negatively impact your credit score in a few different ways. Among them, it can raise your credit utilization ratio, shorten your credit history, and reduce your credit mix. 

But there may also be a few good reasons to cancel a credit card, especially if you are paying a high annual fee for a card you aren’t using or you need to take additional steps to reign in your spending.

If this does describe your situation, you may want to consider taking a few extra steps to ensure that the negative impact on your credit score is minimal. We’ll get to those steps in a bit. 

If you’d like to learn a bit more about the kinds of factors that can impact your credit score, check out our article, which asks the all-important question–why did my credit score go down?

Otherwise, read on to find out what can happen when you cancel an American Express Credit Card and how you can limit the damage.

How Cancellation Can Raise Your Credit Utilization Ratio

While it is generally advisable to avoid carrying a balance on your credit card(s), sometimes it may not be possible to pay off your full balance in a single month. In some cases, it may actually be preferable to carry a balance. For instance, if you are enjoying a 0% APR promotional period, this may allow you to pay off a major purchase in monthly installments. 

That said, carrying a balance will raise your credit utilization ratio, which is the amount of credit card debt you are carrying relative to your overall credit limit. Financial advisors will generally recommend a utilization ratio of 30% or less. Anything higher may hurt your credit score.

This is important to bear in mind if you’re thinking of canceling a credit card. When you cancel a credit card, this will reduce your overall credit limit. This, in turn, can raise your credit utilization ratio. If you are carrying an outstanding balance on your American Express credit cards, cancellation could lower your credit score.

How Cancellation Can Shorten Your Credit History

Credit history is another factor in your credit report that figures into your credit score. In short, the longer your credit history, the better. Lenders generally believe that a longer credit history makes a better sample size for evaluating the suitability of a borrower. 

But what determines the length of that credit history?

This number is based on the average age of your open accounts. If you close an account, it will no longer appear as part of this history. So in this respect, canceling an older credit card, according to an article from American Express, could “hurt your score by reducing the average age of all credit accounts on your credit report, which ultimately affects the ‘length of credit history’ portion of your FICO score. The impact is lower than that of your credit utilization ratio, but you will likely still see a dip in your credit score if you close an account that you’ve had open for several years.”

For this reason, it is usually advisable to hold on to those open accounts, even if you don’t really use the card anymore.

How Cancellation Can Diminish Your Credit Mix

Another factor that usually goes into determining your credit score is your credit mix. Lenders like to see that you have already managed a wide range of account types responsibly. So the variety of business credit cards, rewards credit cards, travel cards, and other credit cards in your wallet can improve your credit score. 

Naturally, account closure would reduce the variety reflected in your credit mix. For this reason, it is generally more advisable to keep your unused card accounts open and in good standing.

For a few more helpful tips on how to keep your accounts in order, check out our good credit checklist.

How to Cancel an AmEx Card With Minimal Negative Impact On Your Credit Score

In spite of the negative impacts outlined above, we recognize that there are some cases in which closing a credit card account may simply be the best option for your personal finance outlook. This may be especially true if you are paying a high annual fee without making the most of the membership rewards points and perks. For instance, the American Express Platinum Card offers amazing benefits, but you will pay an annual fee of $695 to access these opportunities.

If you aren’t using your American Express membership to access these rewards, the AmEx Platinum may be costing you more than it’s saving. If this describes your situation, there are a few things you can do to limit the negative impact of card cancellation:

1. Pay off other credit cards first

Before canceling an unused account, make sure you are carrying as low a balance as possible across other cards. It’s always recommended that you keep low balances (or zero balances) in order to avoid incurring interest charges. However, if you are carrying credit card debt, now is a good time to pay off some of your balances more aggressively. This tactic may be used to offset any changes to your credit utilization ratio.

2. Avoid Canceling Older Credit Cards

If you must cancel a credit card, it’s best to choose an account that is not as old. The older credit cards on your report help to raise the average age of your accounts, which is good for your credit score. Before canceling a card, take a closer look at the start date. If you are torn between a few cards, always cancel the account with the shortest history.

3. Consider Applying for a Credit Card with No Annual Fee

If it’s the annual fee that has you considering cancellation, you may wish to add a new credit card to the mix that comes with no annual fee as a replacement. This way, when you cancel the existing American Express credit card account, you won’t be diminishing your credit mix.

Not sure where to start? Check out our look at the very best 0% APR, no-fee credit cards, especially if you’re planning to make a balance transfer.


Looking for a better way to control your spending–one that won’t hurt your credit score? Consider getting yourself a spending and budgeting app. Check out our look at some of the best money apps for your smartphone or tablet.