topic Re: Chase 5/24 rule in Credit Cards

Chase 5/24 rule

Anonymous — Wed, 26 Sep 2018 22:23:15 GMT

Hi
I hope all of you are having a good day. My question is that I want to apply for the Marriott Reward Card by Chase. I'm reluctant to go through with it because I fear that I may get hit with the 5/24 rule. Recently, I purchased new furniture from Ashley and in order to finances it I had to open up a Wellsfargo furniture Mart USA card. Now at the time I didn't think this was a credit card. So am I correct or in thinking this is not a credit card? Thus, not under the 5/24 umbrella. Credit Karma is labeling this card as a charge account. I don't know what that means.

Re: Chase 5/24 rule

FireMedic1 — Wed, 26 Sep 2018 22:58:38 GMT

Better hope its not a consumer finance account. FICO will drop now, and for a long time. CFA's FICO doesnt care for. From their site:

With consumer financing from Wells Fargo – a trusted, stable brand with decades of industry experience – the Wells Fargo Home Furnishings credit card program is designed to position home furnishings businesses for growth today and in the years to come

You left out a lot of other info. Wait and see how FICO handles this on your next round of scores.

Re: Chase 5/24 rule

Cred4All — Thu, 27 Sep 2018 15:29:40 GMT

@Anonymous wrote:
Hi
I hope all of you are having a good day. My question is that I want to apply for the Marriott Reward Card by Chase. I'm reluctant to go through with it because I fear that I may get hit with the 5/24 rule. Recently, I purchased new furniture from Ashley and in order to finances it I had to open up a Wellsfargo furniture Mart USA card. Now at the time I didn't think this was a credit card. So am I correct or in thinking this is not a credit card? Thus, not under the 5/24 umbrella. Credit Karma is labeling this card as a charge account. I don't know what that means.

From the Chase 5/24 rule by TPG online:

Specific store cards which are part of a national payment system and can be used elsewhere will count. New data points suggest that even store cards which can only be used at a single establishment also now count, but your mileage may vary (YMMV).

I share concern as well as to if that's a CFA as posted above, but you mentioned it being a 'card' so... I'm leaning toward a yes as this will count or at least effect a future decision.

Re: Chase 5/24 rule

Sloedough — Thu, 27 Sep 2018 19:46:43 GMT

Chase counts all charge and credit cards. My Amex Platinum charge card counted twards the 5/24 rule. I confirmed this after I got denied for the CSR the first time. I called the reconsideration line and was told that the Platinum card counted. (He wasn't supposed acknowledge the 5/24 rule, but he did)

I agree, see what FICO does with this, but if it shows up as a charge/credit account it will count twards the 5/24.

Re: Chase 5/24 rule

Anonymous — Thu, 27 Sep 2018 23:12:30 GMT

Fico acknowledge this account in 2 ways, Trans will show up as - Charge account and Exp - New Bank/Credit card. So I hope the above information helps because I'm still confused.

Re: Chase 5/24 rule

SBR249 — Fri, 28 Sep 2018 04:39:21 GMT

The long and short of it is if it shows up on your credit report Chase will count it as a 5/24 TL.

The only exception I've heard of before is if you are an authorized user as that's technically you are not responsible for it. But I don't know if that's still true and even when it was, you often had to call in to recon manually before they could override the automated screen.

Re: Chase 5/24 rule

HeavenOhio — Fri, 28 Sep 2018 09:52:09 GMT

@Anonymous, it does get confusing. Retail cards are frequently labeled as "charge cards" even when they're revolving credit cards. Is this the Wells Fargo Home Furnishings card? We've heard about that card from time to time on the forum. It's a revolving retail card that can be used at multiple merchants.

@SBR249, AUs most definitely count against 5/24. As a matter of fact, 5/24 is the only time Chase cares about AUs as they don't help applicants when they attempt to acquire a card.

@FireMedic1, according to the gurus in the scoring forum, the "consumer finance" designation applies only to certain installment loans. There's no corresponding category for cards.

Re: Chase 5/24 rule

SBR249 — Fri, 28 Sep 2018 12:44:42 GMT

@HeavenOhio wrote:

@SBR249, AUs most definitely count against 5/24. As a matter of fact, 5/24 is the only time Chase cares about AUs as they don't help applicants when they attempt to acquire a card.

While Chase's automated algorithms will certainly count AUs against 5/24, everything I've read thus far have indicated that if an AU is the only thing holding someone back due to the 5/24 rule, there is the chance of a recon by calling in and getting a credit analyst to manually review the app and override the automatic denial.

Re: Chase 5/24 rule

sjt — Sun, 30 Sep 2018 21:33:27 GMT

@FireMedic1 wrote:
Better hope its not a consumer finance account. FICO will drop now, and for a long time. CFA's FICO doesnt care for. From their site:
With consumer financing from Wells Fargo – a trusted, stable brand with decades of industry experience – the Wells Fargo Home Furnishings credit card program is designed to position home furnishings businesses for growth today and in the years to come
You left out a lot of other info. Wait and see how FICO handles this on your next round of scores.

The WF Account will be reported the same way retail cards are. Also, its not ture that "Consumer Finance Account" will drop your FICO score. A lender, in a manual review, may look at it in a negative way, but it wont effect your FICO score in that manner.

Re: Chase 5/24 rule

Anonymous — Mon, 01 Oct 2018 00:14:24 GMT

@MohameFico - A sidebar suggestion. The credit limit and the usage will be shown in CRs and it'll pull down your score big time as you'll hit 90%+ usage on the limit.

This happened to me too when I purchased things from Ashley. I called the customer service and asked them to increase the SL so that my Ashley spend is less than 50% of SL. Give it a try, it'll not only help you increase your overall SL but also help reduce usage on this particular credit line.

Re: Chase 5/24 rule

Revelate — Mon, 01 Oct 2018 01:57:08 GMT

@HeavenOhio wrote:

according to the gurus in the scoring forum, the "consumer finance" designation applies only to certain installment loans. There's no corresponding category for cards.

Well to be absolutely clear: just because we've never seen any revolving account been flagged as a CFA by anyone here, it doesn't mean it is impossible given the scope of the label has been changing in the last half decade or so.

Something backed by Wells in any of it's incarnations probably isn't a CFA: I'm moderately sure it's done on a lender by lender basis on the name and everything else about the tradeline is irrelevant. It's a bad system for diagnosis and they absolutely do suck for those of us that have one but you are correct to state that to date we've never seen a CFA tag applied to anything but a loan.

On the flipside, even with EQ FICO 5 and EX FICO 2, both part of the mortgage trifecta, you can still land north of 760 if everything else is in order even with a CFA on file... aka there are far worse credit sins.

Re: Chase 5/24 rule

Revelate — Mon, 01 Oct 2018 02:00:20 GMT

@sjt wrote:
@FireMedic1 wrote:
Better hope its not a consumer finance account. FICO will drop now, and for a long time. CFA's FICO doesnt care for. From their site:
With consumer financing from Wells Fargo – a trusted, stable brand with decades of industry experience – the Wells Fargo Home Furnishings credit card program is designed to position home furnishings businesses for growth today and in the years to come
You left out a lot of other info. Wait and see how FICO handles this on your next round of scores.
The WF Account will be reported the same way retail cards are. Also, its not ture that "Consumer Finance Account" will drop your FICO score. A lender, in a manual review, may look at it in a negative way, but it wont effect your FICO score in that manner.

When this shows up in FICO reason codes:

You have a consumer finance account on your credit report.

There is indeed a FICO penalty. It isn't a massive one, but it does exist, actually on all FICO models: FICO 98, FICO 04, FICO 8, and FICO 9 according to my reports.

Re: Chase 5/24 rule

Anonymous — Mon, 01 Oct 2018 17:28:09 GMT

@Anonymous wrote:
Hi
I hope all of you are having a good day. My question is that I want to apply for the Marriott Reward Card by Chase. I'm reluctant to go through with it because I fear that I may get hit with the 5/24 rule. Recently, I purchased new furniture from Ashley and in order to finances it I had to open up a Wellsfargo furniture Mart USA card. Now at the time I didn't think this was a credit card. So am I correct or in thinking this is not a credit card? Thus, not under the 5/24 umbrella. Credit Karma is labeling this card as a charge account. I don't know what that means.

Get the Amex SPG card instead. They both come with sign up bonus of 75k Marriott points and have same earning rate. Only difference is SPG card has the fee waived the first year but Marriott charges $95 fee the first year. And you don't have to worry about Chase's stupid 5/24 rule either.