July 3, 2025 · 10 mins read
Santhosh Kumar
The decision to close old credit card accounts after obtaining a new one is a common challenge many Indians face as they build credit, earn rewards, and manage multiple credit cards. On the one hand, it appears sensible to close down unused accounts; why keep a card with zero adjustment sitting in your drawer? However, on the other hand, your credit score and long-term borrowing capacity can be affected.
1. To Avoid Yearly Fees: Every credit card regularly has a yearly or recharging expense. If you're not utilizing a card, paying ₹499–₹2,999 each year might make little sense—a programmed trigger to close an old credit card.
2. To Reduce temptation and Debt: Unused cards may entice incautious spending. Closing them restrains temptation and keeps credit limits in check.
3. Simplify Finances: Less printed material, less articulations, less rules. An incline wallet is simpler to manage.
4. Security Reasons: Old cards, indeed inert, confront extortion dangers. Reasons such as information theft or misfortune cause people to close dormant cards.
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Credit bureaus like CIBIL, Experian, and CRIF maintain records of all accounts, open or closed, for up to 7 years. In any case, occasional scoring models may consider the average age of accounts—including your oldest credit card. If you close your oldest one, the normal age range drops, which may cause a slight decline in your score. So, the key question is: can I close my oldest credit card without harming my credit well-being? It depends on your general profile. If the card in address boosts age altogether and your portfolio is lean, closing may backfire.
Your credit usage proportion is calculated by adding up to exceptional obligation and then dividing by the credit limit. Keeping an old card open—even with zero usage—adds to your restraint and keeps the proportion low. If you close old credit cards, you decrease access to available credit, which may increase your usage proportion and harm your scores.
Sometimes, old credit cards still carry dormant remunerative focuses or unexpired miles. Canceling them without recovering implies misfortune. If you're mid‑way to a point of reference compensation, it may pay to keep it open.
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1. Annual Expense vs Benefit
1: Are you paying ₹999 but getting ₹2,500 in points or cashback? Possibly, it's worth staying.
2: Once you close an old credit card, reactivating it is uncommon, and the same expense waiver or connection offers may not be available again.
2. Age of the Account: A decade‑old card boosts “length of credit history.” Its nonattendance might drop your score by ~10‑20 points.
3. Credit Use Ratio: For example, you have ₹5 lakh outstanding on cards; you owe ₹1 lakh. With use at 20%, you're Alright. Expel a ₹1 lakh limit, and your proportion hops to ~25%.
4. Card Highlights & Lifestyle: Does the old card offer outside benefits, relaxation, and wide acknowledgment? If yes, weigh that.
5. Annual Charge Waiver Threshold: Many banks postpone reestablishment charges if you spend ₹1 lakh per year. Can you hit that? If not, the charge may not be justified.
6. Balance transfer Offers: Some old cards offer transfers at 0% interest or a specific rate. It might be convenient in emergencies.
If it's a generic vanilla fee‑only card without cashback, relaxation, or travel advantage, and it costs you ₹500/year, that's ₹2,500 each five years—worth terminating.
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Some banks issue loans to seniors, typically up to 70. If you've crossed the working age and no longer face recharging challenges, consider closing one of them.
A superior card is accessible (e.g., HDFC Coffeeshops Dark from existing HDFC card). Use an item alter or a new setup; close the old one after the update is confirmed.
If It's Your Oldest Credit Card: Rarely close your oldest dynamic card unless you have numerous older ones or the charge is absurd.
If It Keeps Your Utilisation Low: Ratios over 30% seem terrible. Closing seems to hurt.
You Have a Few Other Accounts: You ideally need 3–4 credit lines. Additionally, a few bureaus may assign low trust.
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1. Check Exceptional Dues: Settle all pending equalizations and reward‑point disputes.
2. Redeem All Rewards: Switch to vouchers or miles recently; never leave them unused.
3. Inform Repeating Payments: Switch to DTH, utility, and memberships first. Clearing them avoids bounce and bounced fees later.
4. Plan Your Credit Utilisation: If you're adding up to ₹5 lakhs and owe ₹1 lakh, guaranteeing the evacuation of the card doesn't skyrocket utilization.
5. Wait for the Statement Cycle: Post‑closing, get a closure letter or mail from the bank. Keep official mail for 7 years.
6. Track Credit Score: Cross‑check CIBIL or Experian 30–45 days afterward. The score may decline slightly, but It Should recoup in 3–6 months.
7. Avoid More Closures: Don't close more than one card at a time; keep at least 3–4 cards open for solid credit.
8. Consider Downgrading: A few banks offer a lower-fee version of your old card—not a closure, but a way to dodge the yearly cost.
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Rahul, 27, has Axis Emerald (₹1 lakh limit) and Axis Neo (₹ 50,000 limit), as well as a late auto-approved Axis Magnus with a ₹2 lakh restraint. The Emerald costs ₹600 per year, but Rahul uses it for work travel. The Neo has been unused for a long time. Closing Neo appears self-evident: no charge, no utilization, and no effect on age (he has Magnus, who is older than Neo). He Should close the old credit card Neo promptly.
Anita, 45, got Citi PremierMiles in 2010. Nowadays, she has two more cards: HDFC Millennia and ICICI Sapphiro. PremierMiles stands as the oldest with a high limit and no charge waiver. Suppose Anita closes her old PremierMiles credit card; her normal age drops. Alternatively, she can inquire about a lower-fee option or pay the charge and proceed with minimal usage (₹1,000 per year) to maintain the history.
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Prakash, 35, has an American Express Platinum card that offers ₹2,000 relaxation and access to universal benefits—not utilized in India but profitable overseas. He included an unused Amex charge card with ₹3,000 yearly expenses. Which to keep? His oldest is Save (2016), but it's expensive. He can let Save lie outside India but keep it open to protect the credit age. His new card offers a break-even with residential esteem. So, can I close my oldest credit card? Reply: no, keep Safe active.
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1: Keep a little yearly spend on at slightest one zero-expense card to keep it active.
2: Auto‑credit ₹500 charge or Amazon payments
3: Avoid closing any card within 6 months of a huge advance application (home/auto)
4: Monitor CIBIL every week, if possible—new biological system administrations permit it.
5: Keep crisis limit low but keep alive
1: Closing a card can drop your score by ~5–15 points
2: But check use: a 5% increment in proportion may thump off 7–10 points.
3: If your normal score is 760+, a little plunge may not matter; underneath 700, you must be cautious.
4: Closed accounts age out of reports for 7 a long time, but banks consider closed+old accounts indeed after
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Top Indian banks, such as HDFC, Axis Bank, ICICI, and SBI, regularly recommend that people maintain at least 3 to 4 dynamic credit cards with a mix of card types and varied ages. This Methodology makes a difference in building a solid, different credit profile and illustrates dependable credit utilization over time. Banks inclined toward clients with steady reimbursement history changed credit sorts (fuel, travel, way of life, rewards) and a reasonable number of open accounts. Holding numerous premium cards with high annual fees is satisfactory, but essentially, the cardholder frequently uses them and earns rewards through benefits like lounge access, cash back, or frequent flyer miles.
However, banks also closely track your account movements using internal credit scoring algorithms—especially after the introduction of risk-based scoring. If you suddenly close old credit card accounts, especially different ones, within a brief span, it might raise questions about financial precariousness or over-leveraging. This appears to influence future endorsements or, indeed, credit limit enhancements.
Tier-2 and smaller banks, such as IDFC Bank, tend to be more adaptable. They regularly center on extending the client base and may not punish closures cruelly. But with huge players, credit maturity—a long, unfaltering relationship with steady credit management—is a noteworthy belief flag.
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1. BSNL or SBI limited linkage: A few public‑sector bank credit cards are auto‑linked to older accounts. Closing may lead to account closure.
2. Secured cards: These are sponsored by settled stores in NBFCs; closure may trigger an early closure penalty.
3. Co‑branded cards: Close ones with destitute co-partners, but inquire if they focus.
4. Digital First cards: They auto‑renew carefully, with an ostensible fee—low hazard to hold.
If a card has ₹0 yearly expense, no recharging, and no least spend, there's no genuine drawback. Keep it for credit age and usage change. As it were close, if the bank fixes rules, or there's no future benefit.
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Closing can Reduce the "average age of accounts" and lower add up to credit restrain. Both can drop your score by ~5–15 focuses, depending on your profile.
Regularly, 3–4 dynamic cards give a great spread over categories (travel, fuel, cashback) and keep up credit history and utilization.
Yes, but you'd be required to open other cards or advances, keep up low use (<30%), and establish age through time.
Not promptly. Hold up 3–6 months after an unused card is dynamic, guarantee explanations post, and utilization history is visible.
Yes, for up to 7 a long time on CIBIL/Experian. But closed accounts do not number toward the age of dynamic lines.
Mostly no. Adjustment: item changes or minimization may be conceivable; full restoration is rare.
Absolutely. It boosts constrain and age as it were near the bank, all of a sudden charges or stops issuing.
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