If you’re managing several major credit cards along with department store credit cards and wondering if you should start closing a few, you’re not alone. Many consumers want to streamline their credit without negatively impacting their FICO score—especially if they’re in the 700–720 range.
So, can you close a department store credit card without hurting your FICO score?
Why Closing Credit Cards Can Be Risky
Closing credit cards—even store cards—can potentially lower your credit score. That’s because it affects two critical components of the FICO scoring model:
1. Your Credit Utilization Ratio (30% of your score)
Credit utilization refers to the amount of credit you’re using compared to your total available credit. Closing any card reduces your total credit limit, which can increase your utilization ratio—and that may cause your score to drop.
2. Length of Credit History (15% of your score)
Your credit score favors long-standing credit accounts. Closing older cards—especially those with years of positive history—can shorten your average credit age and negatively impact your score over time.
What If the Cards Are Costing You Money?
If certain cards—particularly major credit cards—come with high annual fees, and you’re not using them, it may make sense to close them gradually over a 12–24 month period. But if the cards aren’t costing you anything, the smartest move may be to simply stop using them while keeping the accounts open.
Department Store Cards: Keep or Close?
Department store cards typically have lower limits and higher interest rates. However, they still contribute to your total available credit and credit mix—two elements that impact your score.
Unless the card carries a fee or you’re at risk of mismanaging it, keep it open. An inactive account in good standing still helps maintain your credit utilization ratio and credit history.
How Your FICO Score Is Calculated
Understanding the five main components of your FICO score can help guide your decision:
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Payment History (35%)
Consistently paying your bills on time is the most important factor. One missed payment can hurt your score significantly. -
Amounts Owed (30%)
This includes your overall credit utilization. Try to keep your balances below 30% of your total available credit. -
Length of Credit History (15%)
The older your credit accounts, the better. Closing older cards can reduce the average age of your accounts. -
New Credit (10%)
Opening too many new accounts in a short time can hurt your score. -
Types of Credit Used (10%)
Having a mix of credit types—credit cards, auto loans, mortgages—can boost your score slightly.
Smart Tips to Maintain or Improve Your FICO Score
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Always pay your bills on time. Even minimum payments protect your score.
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Keep your credit utilization low. Avoid maxing out any one card.
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Don’t close old accounts unless necessary. Especially those with a strong, positive history.
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Distribute balances across cards instead of loading one card heavily.
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Be cautious with new credit. Too many inquiries can signal financial instability.
FAQs:
Will closing a department store card hurt my credit score?
It can, especially if the card contributes to your total available credit or is one of your older accounts. Closing it may increase your utilization rate or shorten your credit history.
Which cards should I close first if I must?
Start with cards that are newer and carry high annual fees. Avoid closing older accounts that are helping your credit history.
Does having multiple unused credit cards hurt your FICO score?
Not necessarily. In fact, unused cards can improve your utilization ratio as long as they’re in good standing.
How can I reduce credit cards without damaging my score?
Gradually close newer, unused cards—no more than one every 6 to 12 months. Monitor your credit utilization as you do this.
Can I improve my credit score without closing cards?
Yes. Focus on timely payments, keeping balances low, and keeping older accounts open to maintain a strong score.
