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@yfan wrote:
@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.
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.
@longtimelurker wrote:
and especially:
2) One bonus per card per lifetime
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.
How is this any different than what Churners do now? They use the card, get the bonus and stop using it. This just prevents Churners from getting multiple bonuses on one card (which to me is understandable). Even if there were credit problems and someone cleaned up their act, there's no rule that says you can't get the card again (if you want it and it works for your spend), you just won't get the bonus. I think one bonus per card per lifetime is fair.
@red259 wrote:
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?
I am not here to debate fairness, although it is true that I absolutely do not see a churner the same as someone who had a rough time in the past and has proven themselves later.
That being said, I am looking at the bank's perspective. The reason it makes that card they would like to have again unappealing is that the competition will offer them a bonus option. And because this is not a person who is looking simply to pocket the bonus and move onto the next bonus gig (ergo the difference with the churner), the bank would like their business for the long term and wants to offer the best incentive they can.
@Callandra wrote:
@yfan wrote: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.
How is this any different than what Churners do now? They use the card, get the bonus and stop using it.
The difference is that the person in my example didn't stop using their card before just because they were done earning the bonus. They may have been using it for a while beyond that period beyond the hardship hit. When they prove themselves again, they again aren't looking to get the bonus and move onto the next bonus. They are looking for a long term solid rewards card.
@longtimelurker wrote:
@Anonymous wrote:
@yfan wrote:
@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.
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.
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.
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.
I think we all know that maximizing transactions that involve honest spend is a whole lot different from spending several thousands of dollars a month on gift cards to earn more rewards.
@yfan wrote:
@Callandra wrote:
@yfan wrote: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.
How is this any different than what Churners do now? They use the card, get the bonus and stop using it.
The difference is that the person in my example didn't stop using their card before just because they were done earning the bonus. They may have been using it for a while beyond that period beyond the hardship hit. When they prove themselves again, they again aren't looking to get the bonus and move onto the next bonus. They are looking for a long term solid rewards card.
Well, now you are talking about a different person.
Person A: Churner (whom I referred to as the type that gets the card, spends enough for the bonus, and then either closes it or stops using it)
Person B: Person who suffered hardship but has now fixed credit and wants the same card again
I read what you wrote as you were talking about two different people. Person A in blue and Person B in pink.
Think this topic might need closed as there are clearly two serperate school of thought here that have been debated over and over again, just in a different threads. This IMO isn't offering anything new and just reinforcing peoples opinions of what they consider right or not right.. Time to move on imo or get another thread locked. All for a good debate, but this is just going back and forth as they always do.
@CreditCuriousity wrote:Think this topic might need closed as there are clearly two serperate school of thought here that have been debated over and over again, just in a different threads. This IMO isn't offering anything new and just reinforcing peoples opinions of what they consider right or not right.. Time to move on imo or get another thread locked. All for a good debate, but this is just going back and forth as they always do.
Agreed. We've all stated our same opinions a million times.
People are gonna do what they're gonna do, and OP's question was answered as to why they must wait 2 years. I'm moving on from this
@kdm31091 wrote:
@longtimelurker wrote:
@Anonymous wrote:
@yfan wrote:
@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.
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.
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.
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.
I think we all know that maximizing transactions that involve honest spend is a whole lot different from spending several thousands of dollars a month on gift cards to earn more rewards.
In some cases certainly a difference of scale, but my guess is that if the great majority of people used Freedom ONLY for the 5% categories (and up to the quarterly max) and cashed out, the card would be nerfed. And what in KDM-land is honest spend? You are always (correctly) warning people against spending just to get rewards, so does it mean spending only for things that you "really" need, for some definition of need.
@CreditCuriousity wrote:Think this topic might need closed as there are clearly two serperate school of thought here that have been debated over and over again, just in a different threads. This IMO isn't offering anything new and just reinforcing peoples opinions of what they consider right or not right.. Time to move on imo or get another thread locked. All for a good debate, but this is just going back and forth as they always do.
Agree the morality viewpoint needs to be drawn back people. When it comes to that type of discussion, views trend like politics, and it can become ugly.
Suggest tone down what is churning, etc. We don't know if someone is churning or not. Some folks got approved with more than five approvals (me is one). Don't jump to conclusions.