topic Re: Thoughts on Chase card closures in Credit Cards

Thoughts on Chase card closures

NRB525 — Sun, 28 Dec 2014 14:13:26 GMT

From comments here and on other topic boards elsewhere, it seems to me the following usage profile is at risk:

One of these:

1) New Chase card issued with a spend requirement to earn a bonus (This includes apping for several different cards over a period of months or years, each with signup bonus offers, in the past) OR

2) Existing Chase card with specific bonus categories that earn rewards during specified calendar periods AND the cardholder is tending to use the card or cards for the bonus categories only when they apply, then SD the card if the bonus is not active OR

3) The card offers quarterly bonus spend categories and only gets light use anyway, is SD most of the year.

[These scenarios lead to low profitability for Chase]

Then this:

The card is used to buy any gift card amount.

[A gift card is a cash equivalent. Cash equivalents in volume are associated with Manufactured Spend, an unprofitable scenario for the bank]

The combination above seems to be a plausible algorithm for a bank to apply to a population of credit card customers when the objective is to remove unprofitable customers from the cardholder list.

How does one avoid the above pattern? Use the card beyond the initial bonus spend period, use the card outside of the quarterly bonus categories if those apply, do not SD the card for long periods of time, and do not buy any gift cards with that Chase credit card.

I'm not saying this is something Chase thought through, I'm not saying the proposed avoidance solution will work, it is just the explanation and my own plan of action to avoid being closed which I can come up with based on bits of information coming out of this mess.

Good luck!

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 14:16:50 GMT

I think it's mostly fear mongering.

Re: Thoughts on Chase card closures

BarryNTexas — Sun, 28 Dec 2014 14:25:54 GMT

If this is the case then shame on the banks for creating this spending culture by offering these bonuses. If OP is right then most of the cards will be cancelled. LOL

Re: Thoughts on Chase card closures

mitchblue — Sun, 28 Dec 2014 14:27:11 GMT

@Anonymous wrote:
I think it's mostly fear mongering.

Probably. Want to be safe though, no manufactured spending. Seems pretty simple to be..

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 14:32:37 GMT

Agreed. If I sign up for a spend bonus I only sign up for one I can clearly afford to keep up. The wife and I have been meeting our spend bonuses within 4-6 weeks of account opening and that is with multiple spend bonus cards at play. No MS here.

Re: Thoughts on Chase card closures

TRC_WA — Sun, 28 Dec 2014 14:37:13 GMT

@Anonymous wrote:
Agreed. If I sign up for a spend bonus I only sign up for one I can clearly afford to keep up. The wife and I have been meeting our spend bonuses within 4-6 weeks of account opening and that is with multiple spend bonus cards at play. No MS here.

That's exactly how I operate.

I really don't feel bad for people who get their accounts closed after thousands of dollars in MS. You know you are circumventing T & C when you do it...

I can't meet a $2500 spend bonus so I'll just go out and buy a bunch of GC... yeah, go right ahead, but don't come here complaining that your account was closed.

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 14:39:19 GMT

@TRC_WA wrote:
@Anonymous wrote:
Agreed. If I sign up for a spend bonus I only sign up for one I can clearly afford to keep up. The wife and I have been meeting our spend bonuses within 4-6 weeks of account opening and that is with multiple spend bonus cards at play. No MS here.
That's exactly how I operate.

I really don't feel bad for people who get their accounts closed after thousands of dollars in MS. You know you are circumventing T & C when you do it...

I can't meet a $2500 spend bonus so I'll just go out and buy a bunch of GC... yeah, go right ahead, but don't come here complaining that your account was closed.

+1 Agreed!

Re: Thoughts on Chase card closures

kdm31091 — Sun, 28 Dec 2014 14:40:56 GMT

Exactly.

Re: Thoughts on Chase card closures

kdm31091 — Sun, 28 Dec 2014 14:41:41 GMT

If you can't meet a spend bonus chances are you dont spend what the card is targeted for anyway

Re: Thoughts on Chase card closures

bdhu2001 — Sun, 28 Dec 2014 14:45:40 GMT

@mitchblue wrote:
@Anonymous wrote:
I think it's mostly fear mongering.
Probably. Want to be safe though, no manufactured spending. Seems pretty simple to be..

Corporate banks are just trying to find the sweet spot to profit. For a while, after the financial crisis, they were tight on credit and lending. They've discovered that "no risk banking doesn't work." Now they are moving too far over in the other direction. Instead of banking on steady customers who use their cards, sometimes, and sd their cards sometimes, they want to find customers who constantly use and have slimmer chance of pay in full. Thereby increasing their profit. They also want to reduce customers who rack up points, but pay in full. They don't have to give a reason, but that's the bottom line.

We as consumers have no control over what statistic they'll review that gives them a new trend to follow. If we use the card too much and use balance transfers, we scare them. If we use the card too little, we don't create enough of a profit. Either way, they'll decide when to close the card and we have no control over the scenario they'll use to do it.

Don't blame the poster, don't look for other nefarious practices, don't even blame the bank. It just corporate America on steroids looking for the next scheme to hold onto or obtain more of our hard earned money. It's just today's reality.

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 14:48:58 GMT

@bdhu2001 wrote:
@mitchblue wrote:
@Anonymous wrote:
I think it's mostly fear mongering.
Probably. Want to be safe though, no manufactured spending. Seems pretty simple to be..
Corporate banks are just trying to find the sweet spot to profit. For a while, after the financial crisis, they were tight on credit and lending. They've discovered that "no risk banking doesn't work." Now they are moving too far over in the other direction. Instead of banking on steady customers who use their cards, sometimes, and sd their cards sometimes, they want to find customers who constantly use and have slimmer chance of pay in full. Thereby increasing their profit. They also want to reduce customers who rack up points, but pay in full. They don't have to give a reason, but that's the bottom line.

We as consumers have no control over what statistic they'll review that gives them a new trend to follow. If we use the card too much and use balance transfers, we scare them. If we use the card too little, we don't create enough of a profit. Either way, they'll decide when to close the card and we have no control over the scenario they'll use to do it.

Don't blame the poster, don't look for other nefarious practices, don't even blame the bank. It just corporate America on steroids looking for the next scheme to hold onto or obtain more of our hard earned money. It's just today's reality.

Your post almost begs the thought ... "GREED" ... certainly would not want to offer such a thought

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 14:49:33 GMT

@TRC_WA wrote:
@Anonymous wrote:
Agreed. If I sign up for a spend bonus I only sign up for one I can clearly afford to keep up. The wife and I have been meeting our spend bonuses within 4-6 weeks of account opening and that is with multiple spend bonus cards at play. No MS here.
That's exactly how I operate.

I really don't feel bad for people who get their accounts closed after thousands of dollars in MS. You know you are circumventing T & C when you do it...

I can't meet a $2500 spend bonus so I'll just go out and buy a bunch of GC... yeah, go right ahead, but don't come here complaining that your account was closed.

What about when you can and do meet the spend bonus with one or two purchases - that have nothing to do with manufactured spending or buying gift cards? .....

Just luck of the draw? I met the sign up bonus on both Ink cards with 2 PO's placed. I then continued to earn points with utilizing my card for placing orders and paying my AT&T bills and other utilities they offer bonuses for on those cards and paid for those charges on the cards right out of my chase account.

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 14:56:29 GMT

@TRC_WA wrote:
That's exactly how I operate.

I really don't feel bad for people who get their accounts closed after thousands of dollars in MS. You know you are circumventing T & C when you do it...

I can't meet a $2500 spend bonus so I'll just go out and buy a bunch of GC... yeah, go right ahead, but don't come here complaining that your account was closed.

Definitely. Most people, who have bills, can achieve practically ANY spending limit. Starting with Car Insurance, Light Bill, Cell Phone bill, Water (in some cases) bill, Cable Bill, FOOD, Gas (although gas prices are going down) - Do I need to go on? That is an easy $1000/month for most people.

When you apply for a card with bonus for spending, just decide to use that card for EVERYTHING for the next 3 months (or whatever the timeframe is) and you will be fine. There is absolutely NO need to do any MS. It is rediculous to think that just because you find a "loophole" you should exploit it. It is the same thing as saying that you should keep breaking the law because you didn't get caught. I know, bad analogy as one may involve losing your freedom, whereas one means losing your card, but you get the point.

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 15:05:27 GMT

@NRB525 wrote:
From comments here and on other topic boards elsewhere, it seems to me the following usage profile is at risk:

One of these:
1) New Chase card issued with a spend requirement to earn a bonus (This includes apping for several different cards over a period of months or years, each with signup bonus offers, in the past) OR

Good luck!

I'm curious about #1. I just checked. 13/14 of the current cards that Chase offers have some sort of spend requirement to earn a bonus. Only the Slate does not. I'd say that alone shows that they are promoting these types of cards so I'm not sure why they'd punish users for acquiring the cards and using them as intended-to earn bonuses. Now admittedly there are ways to meet those spend requirements that are going to put you on their radar but I doubt that they are going to cancel your accounts because you get several of their cards and meet those requirements over several months or years.

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 15:13:35 GMT

If my memory is on, the Chase Slate Credit Card is a straight credit card with balance transfer options. The card wasn't set up to be a rewards based card. Same as Citi's Simplicity which is a no rewards based credit card (Easy Cash/Deals is a thin alternative to rewards).

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 15:13:44 GMT

@bdhu2001 wrote:
We as consumers have no control over what statistic they'll review that gives them a new trend to follow. If we use the card too much and use balance transfers, we scare them. If we use the card too little, we don't create enough of a profit. Either way, they'll decide when to close the card and we have no control over the scenario they'll use to do it.

Credit cards are designed as convenience (for a fee of course) so the consumer may pay for something without having the money right away but pay over time or at the time when the statement is cut. They are not designed to be SD or apply to simply boost up the available credit. If you are not using it at all, whats the point of having it? So it is perfectly fine for the issuer to say: This consumer doesn't need this card since they don't use it - so we'll just close it. There is nothing wrong with that.

If we use too much of it, and we are not paying it off right away, credit issuers are worried that you may be spending more than you can afford. The company giving you the credit is within their rights to be worried about the potential risk you pose. So AA is justifiable.

In my opinion, there is nothing wrong with a business mentality. Noone lends someone else money, or continues to extend that credit because it is the "right thing to do". It is a business and a business decision has to be made. I have not heard anyone having their account closed because they have the credit, use it, and pay it off. Problems arise from non-usage, over usage (not paying it off in a reasonable time) and for attempting to "trick" the system such as bonus for spending X amount withink Y time. And if I don't use the card, so be it, I will close it myself - just like I did with my capital one secured card, Credit One or Victoria's Secret cards. Before the lender closed them, I may as well do it myself. I lost a total of $2150 in available credit, but I don't use them, so before they close it on me, I am going to close it myself and have the tradeline show up as "Closed at Consumer's request"

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 15:16:18 GMT

@ArmyVietVet wrote:
If my memory is on, the Chase Slate Credit Card is a straight credit card with balance transfer options. The card wasn't set up to be a rewards based card. Same as Citi's Simplicity which is a no rewards based credit card (Easy Cash/Deals is a thin alternative to rewards).

Correct, its sole useful purpose is as a BT card.

Re: Thoughts on Chase card closures

Imperfectfuture — Sun, 28 Dec 2014 15:48:13 GMT

For the WEALLY big spend cards, with no 0% APR, I tend to save up some cash, then buy something I want.

But, OMZG, I just spent 10 at Safeway on a gift card, me think s I should play shuck and dive from Amex?

@TRC_WA wrote:
@Anonymous wrote:
Agreed. If I sign up for a spend bonus I only sign up for one I can clearly afford to keep up. The wife and I have been meeting our spend bonuses within 4-6 weeks of account opening and that is with multiple spend bonus cards at play. No MS here.
That's exactly how I operate.

I really don't feel bad for people who get their accounts closed after thousands of dollars in MS. You know you are circumventing T & C when you do it...

I can't meet a $2500 spend bonus so I'll just go out and buy a bunch of GC... yeah, go right ahead, but don't come here complaining that your account was closed.

Re: Thoughts on Chase card closures

Anonymous — Sun, 28 Dec 2014 15:55:26 GMT

Yes!

You evil MSer.

Re: Thoughts on Chase card closures

sandman2435 — Sun, 28 Dec 2014 16:04:34 GMT

@Anonymous wrote:
@NRB525 wrote:
From comments here and on other topic boards elsewhere, it seems to me the following usage profile is at risk:

One of these:
1) New Chase card issued with a spend requirement to earn a bonus (This includes apping for several different cards over a period of months or years, each with signup bonus offers, in the past) OR

Good luck!
I'm curious about #1. I just checked. 13/14 of the current cards that Chase offers have some sort of spend requirement to earn a bonus. Only the Slate does not. I'd say that alone shows that they are promoting these types of cards so I'm not sure why they'd punish users for acquiring the cards and using them as intended-to earn bonuses. Now admittedly there are ways to meet those spend requirements that are going to put you on their radar but I doubt that they are going to cancel your accounts because you get several of their cards and meet those requirements over several months or years.

They did with me!!!..Got 9 chase cards over the past 2 years.The business chase cards I used to pay my business expensives(Cell phone,Business Ins, Bought a new Imac,Gas, any mananitance on my work truck for business,used them to take business trips(Southwest,United,Stayed in marriot hotels,Had marroit for business) On the personal side used the personal chase cards for everyday stuff,Like eating in resturants,Buying groc.going on personal vacations(had personal marriot card for this as well).just normal everyday spend NO MS whatsoever..ran about $10K a month thur Chases business and personal cards always paid in full,Had about $183K in their bank spread over 5 types of accounts had direct deposit with them as well,and chase still closed out my credit cards with them.So to let everyone know!!! NO ONE IS SAFE!!! from accounts closure from chase,Their reasons for them doing this: Too much avalible credit with other lenders,What gets me I was using their cards the most lol,I think I did not fit their business model