Credit limits reduced and accounts closed when you are late paying other bills.

Credit card lenders regularly run periodic reviews of their account holders. There are certain things they find that will be flagged for a specific action. They no longer have the option to raise your interest rates if they see you making late payments to other bills, or are over a certain credit utilization measurement. But they can still reduce your available credit limit, and in some cases, proactively close your account, and cut off credit lines, and all because your viewed as an increased risk profile.

Every creditor is going to handle this evaluation differently. For some, it will only take your maxing out other credit card accounts; others will not take action unless they see you being reported as 30or more days late on other credit card payments, while others will only take that action if you fall behind with your payments on their account.

I see this happen regularly with people who want to keep accounts out of a debt settlement program. I even encourage people to keep smaller balance accounts out of any debt negotiation approach to reducing and eliminating debt.

Your credit limits get lowered.

Even when you have credit card balances at or near zero, and with 4 an 5 figure credit limits, falling behind with just one other creditor can lead to those credit limits being lowered. I see this less with accounts that have no balance owed on them.
It can feel like a slap in the face when you make every effort to keep certain accounts current, or select them as the credit card of choice (rewards, nice customer service, lower interest rates), that you will use to help rebuild after experiencing financial set backs. But it is what it is with these situations.

American Express is a good example of a large credit card issuer that is likely to reduce limits or close off accounts when your risk profile changes for the worse. But really, most large credit card issuers are looking to limit losses by identifying card holders that meet certain criteria.

Which credit cards will you be settling with, and which account is it that you are concerned about getting closed? Let me know in the comments below and I can offer more feedback.

Banks closing your accounts when you are not late with them.

Not to pick on American Express overly much, but they have been (and continue to be) the most likely to close an account when they sniff out the fact that you are late paying other credit cards. Several other banks will do the same, but my experience is that most banks are likelier to lower available credit limits rather than close accounts.

When you are determining which accounts to keep, the ones with no balance owed are a no-brainer. You want to have positive and open trade lines on your credit reports to help offset the negatives that will come with settling the accounts you cannot afford to keep up paying. If those no balance accounts get closed, it is what it is. This is usually an outcome that will be based on the reality of your situation, not bad card selection on your part. In other words, you cannot pay your minimums, so falling behind was inevitable, and the accounts you have open but are not using are just there.

When you have the ability to plan more around which accounts to keep open, it could help to get feedback for how you go about your selection.

When I am consulting with people about this issue I tend to look for accounts that are less likely to close or lower available credit limits, while also focusing how long you have had the accounts open. The longer the credit history the better, and that can sometimes include a credit card that has a lower balance owed too.

Anyone with questions or concerns about how your negotiating and settling with one lender, can end up impacting your credit cards with others you continue to pay or have a zero balance with, is welcome to post in the comment below for feedback. You can also reach me directly to talk over your concerns by submitting a consult request.