Closing a card that is no longer used feels like tidying up. It removes a small risk and can also reduce a credit score through two separate mechanisms.
Available limit disappears with the account
Utilisation compares balances against total available limit. Closing an account removes its limit from the denominator while balances elsewhere stay the same.
A borrower carrying a modest balance across several cards can therefore see utilisation jump sharply the moment an unused limit is withdrawn.
The effect is immediate and can be large, because utilisation is among the most heavily weighted inputs in common scoring models.
Account age is affected on a delay
Length of history counts, and an old account contributes to it. Closed accounts in good standing generally remain on file for years and continue contributing during that period.
The loss arrives when the closed account eventually drops off entirely. At that point the average age of accounts can fall abruptly.
Because the delay is measured in years, the cause is rarely connected to the effect, and the score movement appears to come from nowhere.
Why the card mix matters too
Scoring models give some weight to holding different types of credit, and revolving accounts are one of those types.
Closing the only remaining card leaves a file composed entirely of instalment loans, which is a thinner picture than a mixed one.
The weight given to mix is modest, so it rarely dominates, but it compounds the other two effects rather than offsetting them.
When closing is still the right move
An annual fee on a card that is not used is a certain cost against an uncertain scoring benefit, and the arithmetic usually favours closing it.
Cards that create a genuine temptation to spend, or that sit in a joint arrangement someone wants to exit, are worth closing regardless of scoring effects.
Security is another legitimate reason, since a dormant account with stored details is a standing exposure that nobody is monitoring.
How to reduce the impact
Timing matters. Closing an account well before a significant application avoids the period when utilisation and file changes are being examined.
Paying balances down first means the lost limit has less effect, because utilisation is already low when the denominator shrinks.
Where the objection is an annual fee, asking to move to a no-fee product on the same account can retain the history and the limit without the cost.