Except the vast majority of the consumer population isn't affected by what we're seeing here.
When the average American has something like 5 or fewer credit cards, they're not going to stumble over the 5 cards opened with other institutions in 2 years that appears to be the reputed current UW standard.
If I had to guess they'll be evaluating this new stance for six months or a year at a minimum dependant on what they perceive as the problematic pattern.
@Revelate wrote:Except the vast majority of the consumer population isn't affected by what we're seeing here.
When the average American has something like 5 or fewer credit cards, they're not going to stumble over the 5 cards opened with other institutions in 2 years that appears to be the reputed current UW standard.
If I had to guess they'll be evaluating this new stance for six months or a year at a minimum dependant on what they perceive as the problematic pattern.
If the vast majority isn't affected, then by inverse deduction (I made that up), the small affected population isn't significant enough to cause Chase financial problems. Why implement a whole new underwriting strategy just for a statistical blip?
I personally do think it has to do with temporary sagging economic growth levels, and Chase temporarily modifying their approach. Being more picky. Once things pick up, their strategy will probably loosen too.
@Bman70 wrote:
@Revelate wrote:Except the vast majority of the consumer population isn't affected by what we're seeing here.
When the average American has something like 5 or fewer credit cards, they're not going to stumble over the 5 cards opened with other institutions in 2 years that appears to be the reputed current UW standard.
If I had to guess they'll be evaluating this new stance for six months or a year at a minimum dependant on what they perceive as the problematic pattern.
If the vast majority isn't affected, then by inverse deduction (I made that up), the small affected population isn't significant enough to cause Chase financial problems. Why implement a whole new underwriting strategy just for a statistical blip?
I personally do think it has to do with temporary sagging economic growth levels, and Chase temporarily modifying their approach. Being more picky. Once things pick up, their strategy will probably loosen too.
Somewhere back around 2005 JPM Chase had 88 million credit cards issued; I suspect that number is likely similar today.
Source: http://www.scranton.edu/faculty/hussain/research_files/ValuationOfBankCreditCard200703.pdf
Can anyone suggest with a straight face that the numbers of churners or ice cream shoppers was more than an a tiny fraction of that? Lenders will quickly move to smash policies which cost them money in virtually any amount if they notice a trend; I've personally seen UW guidelines change in the span of an hour at multiple lenders I've worked at when something wrong was noticed (and some even faster), it's just not hard to accomplish technology wise on any reasonably written application infrastructure.
Also I can tell you with authority that lenders do watch this and other forums; there's been direct actions that even I was aware of as a volunteer moderator, and likely far more that I wasn't. It's not hard to find the pattern if it's handed to you on a silver platter from a data mining perspective.
While I don't think the current working theory is quite accurate and I suspect there's more to it than the simple metric people have so far ascribed to it, to suggest that just because it was an outlier behavior the banks wouldn't take action on it is simply does not match the experience I've seen first hand. While I agree they may well loosen up I doubt it'll be anything more than the numbers of accounts involved unless they come up with the 1 bonus award per lifetime some people have suggested or similar: if you find a class of unprofitable customers in any market (financial services or anywhere else) it's in your best interests to encourage them towards your competitors... and if we're anywhere close to accurate with how Chase is approaching this, they're doing that exactly right.
ETA: I do really like your term btw 
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To add though, from the Gallup April 2014 poll:
http://www.gallup.com/poll/168668/americans-rely-less-credit-cards-previous-years.aspx
Mean (all) 2.6 cards per average American
Mean (card owners only) 3.7
More interestingly, the 5+ card crowd: 16%, of which 9% is 5-6 or 7% like most of the people on the forum who have stuck here for any amount of time > 1 year (at least in the Credit Card and associated boards).
This doesn't affect that many customers as a result, actually given that app sprees aren't normal behavior, I suspect the numbers affected are even smaller than what might be rationally expected. Other than students who really falls into this behavior in normal non-"credit-educated" life?
