Many consumers assume that once a credit card is closed, they’re no longer responsible for the remaining debt. This isn’t the case. Even if you don’t use the card anymore, the debt still matters – and how you approach this debt impacts your credit health.
Fortunately, paying a closed credit card account can be achieved in three simple steps:
- Review the outstanding balance, including interest
- Make a lump sum payment or create a repayment plan
- Contact your card issuer to discuss repayment options
This guide will break down what exactly a closed account is, what it means for your credit report, and how paying off a closed credit card can help boost your score.
Table of contents
What is a closed credit card account?
A closed credit card account is an account where the issuer has stopped allowing new purchases. You may still owe money and must repay it on schedule. Accounts can be closed for a number of reasons:
- There hasn’t been any activity on the card for a certain period of time.
- You have asked the creditor to close the account.
- You continue to make purchases without making payments.
- Your credit score drops significantly.
- You stop making payments for an extended period of time (usually 180 days or more).
Even if your account is closed, you’re still on the hook to repay. In most cases, your card will convert to repayment-only status so that you can continue to repay but can’t make new purchases.
If you stop making payments, issuers often charge off the account around 180 days past due, which will leave a severe negative mark on your report.
Can you still make payments on a closed credit card?
Yes, you can, and if you have an outstanding balance, then it’s highly recommended to repay the closed card in full.
You’re required to pay off the balance on a closed credit card just like you are with an open account. If you don’t make the payments (or make them late), the account may be marked as delinquent.
Late payments over 30 days are typically reported to credit bureaus and can lower your credit score. They can also remain on your report for seven years.
3 steps to pay a closed credit card account
Paying a closed account doesn’t have to be complicated. Let’s break down exactly how you can repay a closed credit card account.
1. Review the outstanding balance and any accrued interest
Start by getting the full picture of what you owe:
- Review your statement or portal: Review your final statement or your online account portal to learn the current balance, including interest and fees.
- Call your lender: If you can’t access the account online, call your card issuer for more information. They’ll be able to tell you the current status and balance of your account.
- Verify every transaction: Double-check that you initiated every transaction in your account before proceeding. You don’t want to end up paying for transactions that aren’t yours.
2. Make a lump sum payment or create a repayment plan
Now that you know how much you owe, you can start to pay down the balance.
If your balance isn’t very large, then you may be able to repay it in full. In this scenario, it’s usually best to make a lump sum payment to repay your balance as soon as possible. There are three ways to pay off your balance:
- Online: If you have an online customer portal, you can make a payment there.
- By mail: If you receive statements in the mail, you can usually send in your payment by mail – just be wary of checks or cash getting lost in the mail.
- By phone: You can call the credit card company and pay that way.
When your balance is too big to pay off all at once, the next-best option is usually to make a repayment plan that chips away at your balance over time. Here’s how to do that:
- Look at your current budget: Document your monthly income, fixed bills, essentials, and minimum debt payments. The goal here is to determine how much money you have left over after paying your bills.
- Determine how much you can pay: After paying your bills, consider directing all extra cash towards the closed account until it’s paid off.
- Use a budgeting tool if necessary: Budgeting tools or apps like MoneyLion can help you track every payment, making it much easier to monitor your progress.
Here’s an example of how your debt repayment might fit in your budget:
| Category | Amount |
| Net income | $3,200 |
| Housing, utilities, transit | $1,650 |
| Groceries, insurance, other essentials | $650 |
| Minimum payments (other debts) | $150 |
| Fun money | $300 |
| Savings | $150 |
| Extra cash left over, paid toward your closed card | $300 |
Once you’ve got a repayment plan in place, make sure to follow through! Timely payments are essential if you want to preserve your credit score. You may want to consider setting up an automatic payment from your bank account. This way, you don’t run the risk of forgetting to make a payment.
📝 MoneyLion Tip: Keep copies of your payment receipts. That way, if there’s an issue with the account, you can prove to the creditor that you’ve paid the required amount on time. It’s also a good idea to routinely check your credit card statement to make sure the payments go through.
So what happens if your budget doesn’t allow you to make a significant payment each month? Luckily, you still have a few options.
3. Contact your card issuer to discuss repayment options
Reach out to your issuer by calling the number on your statement or card to discuss repayment flexibility. Ask if your lender offers any of the following:
- Hardship programs
- Interest reductions
- Forbearance
- Structured plans
Stress that you want to repay the balance, but just need some assistance. Many lenders may be willing to provide flexibility if it increases your ability to repay.
How paying off a closed account can improve your credit
Paying off a closed account can support your credit health by reducing outstanding debt and eliminating the risk of new derogatory items like collections.
If your account is closed in poor standing (an outstanding balance, charge-off, or default), then it can significantly depress your credit score. However, if you make efforts to get the account closed in good standing (paid in full), then you can reduce the impact on your credit score.
How closed accounts affect your credit utilization
Paying off closed accounts can also drastically improve your credit utilization, which is the percentage of your available revolving credit that you’re currently using. A lower percentage is better for your credit score. If you have a closed card that carries a balance, repaying this balance in full can help lower your utilization and potentially increase your score.
How long do closed accounts stay on your credit report?
Closed accounts don’t vanish immediately. The time that they spend on your report depends on the account’s status and any negative information.
- In good standing: Can remain for up to 10 years.
- With negative marks (late payments, charge-offs, or settled for less): Generally fall off after about 7 years.
| Closed Account Status | Typical Time on Report |
| Positive/paid as agreed | Up to 10 years |
| Late payments or default | About 7 years |
| Settled for less | About 7 years |
👉 How to Remove Closed Accounts From a Credit Report
👉 How to Remove Settled Accounts From Credit Report
Paying Off a Closed Credit Account
Paying off a closed credit card account may feel overwhelming at first, but it becomes much more manageable once you understand how the process works and what steps to take.
By reviewing your balance, setting up a repayment plan, and reaching out to your lender for support when needed, you can protect your credit score and regain financial control. Settling the account – whether in full or through a structured plan – can also improve your credit utilization and reduce the risk of future negative marks.
Paying off credit card debt — including debt from closed accounts — is one of the fastest ways to improve your credit score. If you aren’t sure if you have any closed accounts on your report, a credit-tracking app can help.
👉 Does Closing a Credit Card Hurt Your Score?
FAQs
Can closed accounts in good standing help my credit?
Yes. Closed accounts in good standing can continue to contribute positive payment history for years after closure, supporting your length of credit history.
Will paying off a closed account improve my credit?
Often, yes. It typically reduces outstanding debt, lowers your credit utilization, and prevents further derogatory events like collections.
How do closed accounts affect my credit utilization ratio?
Closing a card removes its limit from your available credit, which can increase your utilization and potentially lower your score if other balances don’t change.
Will closed accounts eventually fall off my credit report?
Yes. Positive closed accounts can remain for up to 10 years, while negative ones typically fall off after about seven. However, there are strategies you can use to get them removed earlier.
