Why the 2 year wait for chase sapphire?

[yfan]

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@longtimelurker wrote:

For those accusing churners and abusers of "ruining it for everybody" recall that from the viwpoint of the average consumer, there is no valid reason for having FIVE new accounts in two years ("Wow, you must have so much debt") so it is only being ruined for people who are up to something themselves.

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But this is not true. You are equating not being average as being "up to something" - presumably something abusive/notorious themselevs (or as you later describe it, a "nasty practice"), and the two are simply not the same.

Take, for example, a young college graduate just starting a new career and moving into a new apartment. They may travel a lot for work, so maybe they want a hotel card and an airline card. That's 2 accounts. They like to cook and entertain friends/family, so they are looking to get good cashback on groceries, and gets an Amex for that. Now we're up to 3. They are going to do some home improvement projects or put furnitures in their new home, so they get a Home Depot card for financing options. Now you have 4 accounts. They are single and spend a lot on Amazon, so they get an Amazon store credit card. BOOM. 5 accounts.

Not only can all of this happen in 2 years' time, it often does. Is this person average? No, most people at any one given point in time aren't doing these things all simultaneously, however, this person is not "up to something... nasty", but if they now decide that they would like to take their new date out to some nice restaurants and use the CSP, they can't, because, yes, churners ruined it for them.

[Anonymous]

The new Chase policy has been discussed to death in the other thread. From what I've gathered from the myfico community, most seem not bothered by it. Most of us here understand we take a different kind of interest in credit cards than the average cardholder. We know that the number of cards we have isn't the norm. Those that have an issue with the new policy IMO might need to take a little break from apping.

[longtimelurker]

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@yfan wrote:

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@longtimelurker wrote:

For those accusing churners and abusers of "ruining it for everybody" recall that from the viwpoint of the average consumer, there is no valid reason for having FIVE new accounts in two years ("Wow, you must have so much debt") so it is only being ruined for people who are up to something themselves.

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But this is not true. You are equating not being average as being "up to something" - presumably something abusive/notorious themselevs (or as you later describe it, a "nasty practice"), and the two are simply not the same.

Take, for example, a young college graduate just starting a new career and moving into a new apartment. They may travel a lot for work, so maybe they want a hotel card and an airline card. That's 2 accounts. They like to cook and entertain friends/family, so they are looking to get good cashback on groceries, and gets an Amex for that. Now we're up to 3. They are going to do some home improvement projects or put furnitures in their new home, so they get a Home Depot card for financing options. Now you have 4 accounts. They are single and spend a lot on Amazon, so they get an Amazon store credit card. BOOM. 5 accounts.

Not only can all of this happen in 2 years' time, it often does. Is this person average? No, most people at any one given point in time aren't doing these things all simultaneously, however, this person is not "up to something... nasty", but if they now decide that they would like to take their new date out to some nice restaurants and use the CSP, they can't, because, yes, churners ruined it for them.

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I was talking about perceptions.   It's that out of the blue last comment that I don't really agree with.   Just as possible, the reason for the change is that Chase decided that people getting too many new accounts are higher risk, and this is reflected in FICO scoring

But, I am sure that we will never agree on this, but to me the whole thing is a spectrum.   Getting one card to maximize grocery rewards, another to maximize hotel rewards etc, isn't so different from me to deciding to maximize rewards by churning a bunch of cards.   Ideally, the CCCs would like me to get one or two of their cards and use if for everything, bonus and non-bonus categories.   Selecting which card to use for the biggest buck per transaction is pressuring the profitibility of the card.

[yfan]

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@longtimelurker wrote:

But, I am sure that we will never agree on this, but to me the whole thing is a spectrum.   Getting one card to maximize grocery rewards, another to maximize hotel rewards etc, isn't so different from me to deciding to maximize rewards by churning a bunch of cards.   Ideally, the CCCs would like me to get one or two of their cards and use if for everything, bonus and non-bonus categories.   Selecting which card to use for the biggest buck per transaction is pressuring the profitibility of the card.

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It doesn't matter if you and I agree. It only matters what's happening. And what's happening is banks are taking actions that seem to be closing off or restricting churning while expanding or keeping category rewards just the same. That to me indicates it's the churning that's more of the problem from the point of view of the lenders. And since credit cards are nothing more than temporary loan devices, it's the lenders' behavior that I draw most inferences from.

[Anonymous]

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@yfan wrote:

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@longtimelurker wrote:

But, I am sure that we will never agree on this, but to me the whole thing is a spectrum.   Getting one card to maximize grocery rewards, another to maximize hotel rewards etc, isn't so different from me to deciding to maximize rewards by churning a bunch of cards.   Ideally, the CCCs would like me to get one or two of their cards and use if for everything, bonus and non-bonus categories.   Selecting which card to use for the biggest buck per transaction is pressuring the profitibility of the card.

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It doesn't matter if you and I agree. It only matters what's happening. And what's happening is banks are taking actions that seem to be closing off or restricting churning while expanding or keeping category rewards just the same. That to me indicates it's the churning that's more of the problem from the point of view of the lenders. And since credit cards are nothing more than temporary loan devices, it's the lenders' behavior that I draw most inferences from.

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I really don't understand how you can infer that it's churners and not the excessive number of cards that led to the change.  If Chase is so concerned about churning then why didn't they implement the policy for their co branded cards like the Mileage Explorer and Marriott card for example? Those cards are churned just the same as the CSP and Freedom.

[longtimelurker]

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@Anonymous wrote:

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@yfan wrote:

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@longtimelurker wrote:

But, I am sure that we will never agree on this, but to me the whole thing is a spectrum.   Getting one card to maximize grocery rewards, another to maximize hotel rewards etc, isn't so different from me to deciding to maximize rewards by churning a bunch of cards.   Ideally, the CCCs would like me to get one or two of their cards and use if for everything, bonus and non-bonus categories.   Selecting which card to use for the biggest buck per transaction is pressuring the profitibility of the card.

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It doesn't matter if you and I agree. It only matters what's happening. And what's happening is banks are taking actions that seem to be closing off or restricting churning while expanding or keeping category rewards just the same. That to me indicates it's the churning that's more of the problem from the point of view of the lenders. And since credit cards are nothing more than temporary loan devices, it's the lenders' behavior that I draw most inferences from.

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I really don't understand how you can infer that it's churners and not the excessive number of cards that led to the change.  If Chase is so concerned about churning then why didn't they implement the policy for their co branded cards like the Mileage Explorer and Marriott card for example? Those cards are churned just the same as the CSP and Freedom.

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Of course we don't really know the details, but people do seem quick to decide that behavior they don't like (or rather don't do themselves) is the cause.    Basically, as discussed to death, there are really pretty simple mechanisms to deal with churning:

1) Reduce the bonus, delay the bonus till afer AF, or don't waive AF at all.

and especially:

2) One bonus per card per lifetime

If churning really was the issue, it's hard to understand why some other much weaker mechanism, (such as no more than 5 new accounts per two years) would be adopted, especially as it catches what yfan would view as non-churners (and I would characterize as greedy transaction maximizers who deserve to burn in hell!)

And as for keeping or expanding category rewards the same, that is partially selective viewing.   The rearrangement of the Cash + categories seemed to be aimed at reducing popular categories, Arrival Plus has (in effect) reduced category bonus while maintaining churning rewards etc.

[yfan]

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@Anonymous wrote:

I really don't understand how you can infer that it's churners and not the excessive number of cards that led to the change.

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What does Chase suffer if someone has too many cards? If it weren't for the bonus, they still get their swipe fees. What puts them in the red for a given account is the bonus in the short term. If you get the bonus and then don't really use the card, Chase stays in red. If you get no bonus but also use the card sparingly, Chase doesn't make a ton, but they don't really lose money on you. Even if it's just bonus categories where the bank makes less than they give in rewards in a particular transaction, for normal or sparing usage, they make it up by putting restrictions on minimum redemption amounts and thresholds and so forth - that way they have that money to play with, invest, loan out at much higher rates during that time. This is different from MS where people cash out almost immediately, foreclosing the possibility of that time for the bank to play with the money.

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@Anonymous wrote:
If Chase is so concerned about churning then why didn't they implement the policy for their co branded cards like the Mileage Explorer and Marriott card for example? Those cards are churned just the same as the CSP and Freedom.

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Simple. Because Chase doesn't actually provide the rewards for the cobranded cards, and thus they do not suffer the consequences of churning. Chase is not the ones in red when you churn your Marriott card, Marriott is. If Marriott decides too many people for their liking are churning their cards, they have a number of options to deal with that: devalue points, reduce the bonus, or restrict in other ways. But either way, it's not Chase's problem.

[kdm31091]

Anything that cuts into profits get changed eventually. Cash+ was changed ostensibly because people got too much reward out of bill pay, airfare, etc. We all know some people cheated the categories to get more but it is what it is.

When given an inch some people run and take a mile. Eventually issuers catch on and are forced to cut benefits. Those who milked it simply find another path to milk. But those who werent milking have to struggle to find a replacement card. Now, not every benefit reduction is a result of churning/ms/people going too far but its definitely a factor most of the time IMO.

Nevertheless its human nature to be greedy and nothing I say will stop those who want to game the system from doing it. All we can do is enjoy cards while benefits lasts.

[yfan]

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@longtimelurker wrote:

Of course we don't really know the details, but people do seem quick to decide that behavior they don't like (or rather don't do themselves) is the cause.    Basically, as discussed to death, there are really pretty simple mechanisms to deal with churning:

1) Reduce the bonus, delay the bonus till afer AF, or don't waive AF at all.

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Which would severely reduce its appeal to those who would use the card long term, especially given the competition. A bonus can be churned, but churning is not the only purpose of a bonus for a consumer.

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@longtimelurker wrote:

and especially:

2) One bonus per card per lifetime

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Which, while effective, would not solve the problem of losses for the bank. Churners would simply move on to other cards, but wouldn't give a given card any more business, leaving the bank still in red for that account. In addition, it would reduce the card's appeal to someone who has had credit problems in the past - or real life problems that resulted in credit issues - but have since proven themselves to be a dependable borrower, if they had had that card in the past and would like to get it again for long term use.

Simply put, the solutions you propose would at least partially defeat the purpose of a bonus along with perhaps getting the churners. There simply is no mechanism - yet - to only target churning AND make sure no one unintended gets caught in the web.

[red259]

I don't understand the argument how making a card bonus once in a lifetime would harm unintended people. The example was someone who had credit problems now wanting to get the card they had in the past back. So? They can still get the card back just not the signup bonus if chase did a once in lifetime of product setup. If your saying then it's unfair those people can't get the same bonus twice then wouldn't that make them a churner if they got the bonus twice for same product?