Last weekend, in a moment of weakness, I applied for the Chase Amazon Prime card. My family shops at both Amazon and Whole Foods Market a lot, so we're not just seeking more credit but could really use the card.
For background, I have a high income, long banking relationship with Chase (currently a Chase Private Client), and FICO scores around 700.
When I applied for the Amazon card, I got the original 30-day message, which then turned into the 7-10 day message. Knowing what that usually means, I phoned Chase to check on the status of my application and recon if necessary.
The CSR was very pleasant and updated my income and current employment information. He then said I'd been denied the new card due to my "overall exposure" with Chase. I asked what that meant, knowing I have seven Chase cards with about $54K in cumulative SL and an average utilization under 29 percent.
Imagine my surprise when he told me that my total exposure with Chase was more than $160K! I asked how that could possibly be, since the total spending limit on all my Chase cards is only around one-third of that number. Did they include my Chase auto loan as part of the total?
To my astonishment, the CSR explained that Chase considers my business cards when calculating my total exposure! No wonder my exposure was high; my Ink Business Preferred card has a $100K SL (I have seven employees as authorized users). The business spends perhaps $20-$30K each month on the Ink Preferred card but the company always Pays In Full the balance. I asked why Chase considers the Ink card part of my personal credit "exposure" when I'm not personally responsible for paying the bill? He didn't have an answer to that. I suggested that logically, if they're going to include my business cards SL in evaluating my application for a new personal card, then by the same token Chase should also consider my company's assets (which total more than $130 million)!
The CSR agreed to recon the lending decision and said they would let me know their decision in writing. I thanked him for his time; later in the day, I got the 30-day message on the automated status line. But based on my conversation today, I'm not holding out much hope that my application for the Amazone Prime VISA will be approved...
Has anyone else run into this phenomenon, where the lender commingles personal and business credit exposure when considering an application for a new personal card?
Thanks for your thoughts and the useful information. I've always assumed that for business credit cards like the Chase Ink Business Preferred, the business is liable for the debt. They didn't give me the card based on my personal wealth, but rather the assets and spending habits of the company. It's useful to be reminded that we are all personally liable, unless the card in question is a true corporate card.
I got the Ink Preferred cards for me and my staff because we travel internationally and thus can use UR points for airline upgrades and hotel rooms. It's a nice benefit for the staff that I don't believe you can get with pure corporate cards.
I understand that if the company defaults on the Ink Business Preferred card, I'm liable for the debt. And it seems the banks take both business and personal credit cards into account when calculating their total "exposure". But if that's the case, it sure seems like I should also get the credit if the card is PIF every month!
In any event, the automated status line is still saying I'll hear from Chase in 30 days. So perhaps there's hope that this will turn into an approval for the Chase Amazon Prime card. After all, risk and exposure aren't the same things, and the former is pretty minimal here.
I’ve been doing some research on corporate cards just for pure informational purposes and it seems like they do get decent rewards if allowed by the corporation
Since the corporate cards are normally tailored with some lenders to fit the requirements of the corporation. It could be that they negotiate a lower price or interest rates if no rewards are given. But some do allow it. Amex does if the corporation allows it but there is a small yearly fee to link the points to your account.
Lenders will always count personally liable business cards into total exposure.
While it might seem like you are low risk and the bank sees you as low risk. That doesn’t mean there still isn’t a risk to them. When you start extending 100K-200K to the same person across all accounts. If they default it hurts their bottom line.
You aren’t the only account chase has either.
So when you think about it, Chase probably has 100’s to 1000’s of accounts that have 100-200K exposure or more. If five of them default a year. That’s a 500K-1M in loss for them. While banks do billions in profit, a 500K to 1M loss hurts. Combine this with all the lower amount personal accounts that default and you start adding up some serious money.
Since the corporate cards are normally tailored with some lenders to fit the requirements of the corporation. It could be that they negotiate a lower price or interest rates if no rewards are given. But some do allow it. Amex does if the corporation allows it but there is a small yearly fee to link the points to your account.
Lenders will always count personally liable business cards into total exposure.
While it might seem like you are low risk and the bank sees you as low risk. That doesn’t mean there still isn’t a risk to them. When you start extending 100K-200K to the same person across all accounts. If they default it hurts their bottom line.
You aren’t the only account chase has either.
So when you think about it, Chase probably has 100’s to 1000’s of accounts that have 100-200K exposure or more. If five of them default a year. That’s a 500K-1M in loss for them. While banks do billions in profit, a 500K to 1M loss hurts. Combine this with all the lower amount personal accounts that default and you start adding up some serious money.
I congratulate you on asking those relevant questions.
The data points are greatly appreciated and I hope that the recon is successful.
Best wishes.
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(+151)This morning I received a message that my Chase Amazon Prime VISA application had been approved after recon. Initial SL = $10,000.
It appears that the underwriters took another look at my "exposure" with Chase and concluded that my history justified another card. Thanks, Chase!
@ridgebackpilot wrote:This morning I received a message that my Chase Amazon Prime VISA application had been approved after recon. Initial SL = $5,000.
It appears that the underwriters took another look at my "exposure" with Chase and concluded that my history justified another card. Thanks, Chase!
Nice recon, congratulations!!
I have to hand it to you... provided good factual informtion, history, and reasoning. A ton of effort for an Amazon card but in the end, they agreed with you. I'm honestly surprised to see a successful Chase Recon, think I may need your autograph. Happy Friday to you sir!
@Cred4All wrote:I have to hand it to you... provided good factual informtion, history, and reasoning. A ton of effort for an Amazon card but in the end, they agreed with you. I'm honestly surprised to see a successful Chase Recon, think I may need your autograph. Happy Friday to you sir!
Thanks! I suspect my successful recon had a lot to do with the depth of my banking relationship with Chase, which offset my total credit exposure.
As a Chase Private Client, I have a pretty deep commitment to them including investments with JP Morgan in excess of $250K. I have seven personal Chase cards (now eight) and two Chase business cards with six authorized users. So my total monthly spending including both personal and business is more than $30K.
Seems like they should reward this kind of relationship and I'm glad they do! Sure beats my experiences with other big banks such as Wells Fargo and Bank of America!