Closing your Discover card can impact your credit score. This guide walks you through options to consider and how to close your account.
Although Discover offers a suite of great credit card options, you may find that your current card no longer matches your needs and want to close your Discover credit card. Whether your wallet is getting fat with too many cards or you have another reason, closing your account is a simple process. However, there are a few things to consider first.
The following guide will help you decide whether or not to close your Discover card, explain how to go about it, and offer some alternatives if you choose not to.
Should I close my Discover credit card?
If you’re on the fence, here are the pros and cons.
While pairing cards for a personalized rewards strategy is a great option, sometimes you find yourself needing to reduce your number of cards. Additionally, if you’re spending excessively or are carrying a high balance on the card, shutting the account might be what your finances need right now. (You can also temporarily deactivate your Discover card for a specific time period.) Or maybe you found a different card that fits your spending habits better with different categories of cash back or points than your current Discover card.
There are plenty of good reasons to close an account. However, before you jump into closing your Discover card, consider how your credit score may be impacted. The two primary ways this can negatively impact your score: if it has a high credit limit or if it’s your oldest credit card.
Closing a card account can harm your credit score by increasing your credit utilization ratio if you have other credit cards open with balances. Your credit utilization ratio is how much credit you’re using (on a card, that’s your account balance) divided by your credit limit. Generally, the lower that ratio is, the better your score – and the impact of this ratio makes up 30% of your credit score. So, if you’ve got your card paid off and you just want to close it, it might not do your score any favors.
Additionally, if your Discover card is your oldest credit card, you might want to think twice before closing it. An older credit card can increase the average length of your credit history, which has a 15% impact on your credit score. If you haven’t had the card long and you have other older cards, it may not affect this too much.
The final thing to consider is how likely it is that you would ever want to reopen your Discover card. “Can you reopen a closed Discover credit card?” is a commonly asked question, and the answer is a firm no. Once the card is closed, you must apply for a new account if you want a Discover card again.
Options to consider instead of closing your credit card
If you’re debating whether or not to close your card, you have a few options to consider. Discover credit cards carry no annual fees, so it doesn’t cost you anything to keep the account open. If you want to keep it open for the sake of your credit utilization ratio or length of credit history, for example, you can put a recurring autopayment on the card or just remember to make a purchase at least once a year to make sure it’s not closed due to inactivity.
Additionally, Discover offers many card options, and you can request a product change instead of getting rid of your current card. For example, if you want to upgrade your card game to a different rewards system, you can request a Discover product switch. For example, you might not be interested in earning miles anymore and want to switch to a card that earns cash back instead. The Discover it® Cash Back card, for example, is a solid option for earning cash back – you get 1% back on general purchases, plus 5% cash back on up to $1,500 in purchases each quarter in various categories throughout the year (quarterly enrollment required).
Before closing your Discover account
There are a few housekeeping tasks to complete to cancel a credit card without negatively impacting your credit score.
Transfer your credit limit
Some issuers allow you to transfer your credit limit (how much you’re able to spend on a credit card at a time before paying it off) to another card from the same issuer. This can help preserve your credit utilization ratio. Check out this guide to learn how to transfer your credit limit between Discover cards.
Clear the balance
If the account has a balance, you need to pay it off or transfer it. Of course, choosing to pay off the balance is ideal, but, if you can’t pay it all off right now, look for a card that offers an introductory 0% APR on balance transfers to give yourself a little extra time to pay down your card debt without accruing more interest.
Redeem your points or cash back
While you don’t have to redeem your points or cash back before closing your Discover credit card, it is a good idea to check the balance so you don’t miss out on redeeming rewards you’ve earned.
Plot the effect on your credit score
Finally, be sure you plan the right time to close your credit card. If you are applying for a car loan or an apartment, for example, you’ll want to wait to close your Discover card until after you are approved so any potential impact on your score doesn’t hurt your chances of getting approved. Remember, your credit utilization makes up a chunk of your credit score, so if you close a card with a high credit limit, it’ll drop your utilization ratio and subsequently your overall credit score.
How to close a Discover account
It’s very simple to close a Discover account. If you have your card handy, call the number on the back. If you don’t have your card with you, you can call 1-800-DISCOVER. Be ready to give the representative your name, account number and address when you ask to close your account.
Currently, Discover does not offer a way to close your account online.
If you’re prone to overspending and don’t need to worry about a hit to your credit score, it’s probably best to cancel. However, Discover credit cards carry no annual fees, so holding on to a card even if you don’t plan to use it is a no-cost option.
Regardless of the decision you make, you have options. Discover offers a suite of credit cards that you can switch to that might make more sense for you. The issuer also makes it easy to close your account with a simple phone call if you choose to cancel your card.