Canceling a card does not incur a hard inquiry, so that aspect of it won't hurt your credit.

But when you cancel a card it reduces your total available credit and then could raise your utilization which could hurt your score. Utilization is calculated on each account and also on all the accounts as a whole.

As for being less of a risk - I would think that may come into play occasionally in a manual underwriting. But based on the FICO score model it doesn't.

Here's some more info on the FICO scores: http://www.myfico.com/CreditEducation/CreditScores.aspx . Also creditboards has a wealth of knowledgeable on this.

Personally I never close personal credit cards as long as their is no annual fee or if the AF if worth it. Having a perfect payment history over the course of a decade or more is priceless!

Here's my scores, still trying to get them higher