Should you cancel your credit cards when you retire?

At some point in retirement, you look at your wallet and wonder why you still have so many credit cards. If you are not using them, closing them feels like the responsible move. Sometimes it is. Sometimes not.

"I've worked with retirees for over 20 years, and the ones who close old credit cards almost always regret it. That card is keeping your credit utilization low - which is 30% of your FICO score - and if it's been open for decades, it's the reason your credit history looks as strong as it does," said Cliff Auerswald, president of All Reverse Mortgage.

Read: Experts suggest best credit cards to obtain before retiring

On a fixed income, recovering from a credit score drop is harder than it was when you were working. And the regret arrives when you need to access credit one day, and the score you need isn't there anymore.

Three Questions to Ask Before You Close a Card

Before closing any card, consider three questions.

How old is it? Accounts open for a decade or more carry significant credit history weight. Closing them does not erase that history right away, but your average account age shortens over time, and that matters to lenders.

How much available credit does it hold? A high-limit card sitting at zero is holding up your score. Closing it removes that from your total.

What is it costing you? If you're paying an annual fee for benefits you stopped using, that is the clearest case for closing a card.

"I've worked with retirees for over 20 years, and the ones who close old credit cards almost always regret it. That card is keeping your credit utilization low - which is 30% of your FICO score - and if it's been open for decades, it's the reason your credit history looks as strong as it does."

What Closing a Card Actually Does to Your Score

Credit utilization accounts for 30% of your FICO score, according to myFICO. Credit history accounts for another 15%, according to myFICO.

Say you have $10,000 in available credit across three cards and carry a $1,000 balance. Your utilization is 10%. Close a card with a $4,000 limit, and your available credit drops to $6,000. That same $1,000 balance is now 16% utilization. People with 850 FICO scores average 4.1% utilization, according to myFICO. Lower is always better. Baby Boomers averaged 747 in 2025, and Gen Xers averaged 709, according to Experian. Those scores took decades to build, and rebuilding them on a fixed income can be a lot harder.

"The problem is, on a fixed income, you can't recover from a credit score drop the way you could when you were working. And I see it all the time - someone closes a card thinking they're simplifying, then six months later they need to qualify for a HELOC or refinance and the score isn't there," Auerswald said.

Smarter Alternatives Before You Close

If the card carries an annual fee, call the issuer and ask to downgrade to a no-fee version. You keep the account history without paying for benefits you are not using. A card that just sits in a drawer can stay active with a small recurring charge on autopay. A streaming subscription works. A utility bill works, too. Set up automatic payments to pay off the balance on the credit card every month, and you do not have to think about it again.

Already decided to close it? Before you do, if you have another card with the same issuer, you can call and ask to transfer the credit limit to the other card. That keeps your available credit intact.

When Closing Actually Makes Sense

A card opened in 2022 with a $2,000 limit and a $95 annual fee you stopped using is probably not worth keeping. Short history, relatively low available credit and real money out of pocket every year. That one you can close. If managing multiple accounts has become genuinely difficult, consolidating makes sense, too. Just make sure the cards you close are the young ones with low limits, not the ones that have been in your wallet since the 90s.

One More Reason to Keep It

Credit cards carry stronger fraud protection than debit cards. With a debit card, the money is already gone while the bank sorts it out. With a credit card, you are disputing a charge you have not paid yet.

"A solid credit profile can be critical if a retiree needs access to a line of credit - for example, to cover unexpected medical expenses," said Cheryl Evans, director of the Lifetime Financial Security Program at the Milken Institute.

Keep the cards that cost little and carry weight. Close the ones that do not.

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This story was originally published June 2, 2026 at 8:03 AM.