Will Settling a Credit Card Keep You From Getting Credit With That Bank Again?

To my knowledge, Chase Bank does not blacklist people from future credit products if they previously settled a debt with that same bank. I have worked with people who have maintained Chase accounts, credit cards and otherwise, while settling other Chase accounts.

If a representative tells you otherwise as part of a settlement disclosure, it would be the first I have heard of Chase making that disclosure, whether through a debt collector or an internal employee. And even if Chase were to do that, there are many other resources to obtain a home loan from when you are ready.

I will say it could be many years before some banks reissue credit cards to those who settled with them, or discharged balances through bankruptcy. Here again, there are plenty of competitive credit cards out there. You will still have options, even if not with Chase bank right away.

The bank that does keep a list

American Express has maintained a black list where people who have not paid them have found it impossible to get AMEX cards again. That is the only confirmed example I can provide. If an AMEX account is the one you are dealing with, see dealing with debt collectors for American Express.

At the time of this posting I am seeing some prior AMEX account holders now getting approved for new accounts after settling or filing chapter 7.

The credit damage is usually already done

Settling a credit card account that went to a debt collector will often mean the account was already charged off. That means the credit damage is already done. Deciding whether to settle the debt at that point should be more about affordability and cash flow than about credit reporting.

You do not get extra credit score benefits from paying a charged off account in full vs settling for less than the full balance. It will be the same difference to your scores.

Banks do assign accounts out to debt collectors while keeping ownership of them, rather than selling them to debt buyers. So a collection agency can be working a Chase account that Chase still owns. At the time of this publishing, Chase has not started up selling debt again. They have not since 2013.

Keeping another card with the same bank open

Holding onto a card with a bank while you fall behind on your other accounts with that same bank is a different matter. I would not plan on having that card still open and available after falling late on the others. It would more likely be an accident if that happened. Many banks will lower your limit, or close your account, if they see you late on any accounts, and not just other accounts you have with them. I cover how one of the larger card issuers handles this in resolving debt with Synchrony Bank.

That said, you have a better chance of keeping an account if it has a zero balance, or close to it.

It can be just as important to understand the criteria for settling an account, as it is for keeping accounts out of your settlement strategy.

Anyone with questions about a bank they are worried will close other accounts, or prevent access to future credit, can post anonymously in the comment below for feedback.