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Are you having second thoughts about your new credit card? Wondering whether you should cancel it or keep it on? Read on to find the answer.

Whether you close your card immediately after opening it or after a few years, terminating a credit card account impacts your credit score negatively. Here’s what happens to your credit score, when you close a credit card immediately after opening it.

  • Your credit utilisation ratio increases - When you close a credit card, the associated credit limit is eliminated from your overall available credit limit. This can cause your credit utilisation ratio to increase, leading to a drop in credit score.
  • Multiple Hard Inquiries - When you open a credit card, it triggers a hard inquiry on your credit report. Closing a card immediately after opening it and reopening another card leads to two hard inquiries on your report within a short time. This can lead to your credit score dropping further.

So, should you keep it open or cancel it? 

It depends. If you’re not satisfied with the card (high interest rates, steep annual charges), then you can cancel it. It may cause your credit score to drop temporarily. But, don’t panic. By making timely payments on your other accounts, and lowering your credit utilisation ratio, you can rebuild your credit score. However, it’s highly recommended that you wait for at least six months before applying for your next credit card. This way, there aren’t multiple hard inquiries on your account within a short timespan, preventing further drop in your credit score.

On the other hand, if you decide to keep it, you can use it sparingly or not use it at all. Having a credit card with zero balance is helpful to build your credit history and score. Use other credit cards that come with the features that you desire, for your regular expenses.

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CreditMantri Finserv Private Limited

CIN No

U72100TN2012PTC085154

IRDAI Registration Number

CA0665

Valid Till

01-Aug-2025

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CreditMantri Finserve Private Limited Unit No. B2, No 769, Phase-1, Lower Ground Floor, Spencer Plaza, Anna Salai, Chennai - 600002

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