Closing a paid-off credit card usually drops your score 10 to 30 points temporarily, mainly because of the utilization and credit-history-length effects. The drop is rarely catastrophic, and the score typically recovers in 3 to 6 months as your other balances decline. But if you have only one or two cards, or if you are about to apply for a mortgage or auto loan, do not close the account.
Why closing hurts the score. Two of FICO's five factors are affected. Credit utilization (the percentage of available credit you are using) goes up because your total available credit shrinks while your other balances stay the same. A $2,000 balance on $10,000 of available credit is 20% utilization; close a $5,000 card and the same balance jumps to 40%. Length of credit history is also affected because closed accounts eventually fall off your report after 10 years, removing a positive trade line.
When closing is fine. If you have many cards (5+), closing one will not move utilization much and the credit-history hit is delayed by a decade. Closing a card with a high annual fee that you no longer use makes sense if you do not need the credit. Closing a card with a recent fraud history or one you do not trust yourself to use also makes sense; the score impact is usually worth the behavioral protection.
When closing is dangerous. If you are inside the 12 months before applying for a mortgage, do not close any account. Lenders want to see stable utilization and a long average account age. If you only have two cards and close the older one, your average age of accounts can drop sharply. If your utilization is already high (40%+ across all cards), closing a card pushes it higher and can drop your score 40-60 points.
The hardship-program exception. Most credit card hardship programs and almost all debt management plans require closing the account as a condition. In those cases the score hit is unavoidable, and the savings (lower APR, structured payoff) usually outweigh the temporary credit damage. The score generally recovers within a year of completing the plan.
Alternative: keep the card open and stop using it. If your only goal is to avoid the temptation to spend, freeze the card, leave it in a drawer, or remove it from your digital wallets. The card stays on your report, contributes to utilization math (zero balance = 0% utilization on that card), and protects your average age of accounts. Some issuers will close inactive accounts after 12-24 months of zero use; a small charge once or twice a year (a $5 streaming subscription) keeps it active.
Recovery timeline. If you do close a card and your score drops, the recovery happens as you pay down balances on other cards (lowering total utilization) and as time passes (the closed account stays on your report for up to 10 years as a positive entry). Most consumers see full recovery within 3-6 months unless they are also adding new debt.