Re: Changes to chase 5/24

notmyrealname23 · ‎04-22-2020

2/24 seems pretty strict. I'd want more sourcing on that.

5/24 is pretty obviously "thanks for all the love from r/churning but we actually don't want you as customers, we prefer discouraging you to actually acquiring then firing you". Chase needs you to keep using their cards long term, especially if they're handing out 100k UR SUBs. Someone who ditches it after the SUB is an undesirable customer. Someone who sock drawers a hotel or airline card to get baggage fees or a free hotel night in exchange for an annual fee might not be terribly desirable either, and it's a way to slow those behaviors down.

It's possible Chase is throwing the occasional baby (good customer) out with the bath water (typical r/churning inhabitants)... but they have the data and you don't. Also, how many people who aren't "playing the game" are going through 5 signups every two years anyway? Even a lot of folks here in the MyFico bubble are trying to optimize on a set of cards long term (I want to do some SUB chasing myself, but low key without all the MS gyrations or burning relationships I want to keep long term, and I DO think I have a set of cards that I want long term).

kdm31091 · ‎04-22-2020

2/24 is very restrictive even for relatively average consumers. None of us enjoy 5/24, but it makes sense from a business POV as rarely is the general consumer going to be above 5/24 and most of us who are are unprofitable reward maximizers. If a "regular" customer is above 5/24, they likely are credit hungry which isn't a good situation either. But 2/24 would weed out a ton of customers, and not just churners. 5/24 has worked well for Chase, seemingly, since it's been in place since 2015 and has expanded to all their cards. I can't see them doing 2/24 but who knows? Maybe they truly only want loyal customers who will basically never switch cards. Can't say I agree with 2/24, but they have access to a lot more data than we do.

I wonder if it would just be semi temporary to basically stop approvals until the economy improves again. Who knows.

As far as other banks following suit, many have, although not as restrictive as 5/24. But it's become pretty tough to get approved for Capital One, Bank of America, etc if you are deemed a "churner".

Also, I remember reading that the lady who headed up the Chase Sapphire Reserve was recently hired by Citi - so my thoughts are - get your Citi apps in sooner than later because I wouldn't be shocked to see them clamp down with input from a former Chase employee.

Citylights18 · ‎04-22-2020

Chase from my last application I remember also observes things like how many apps you've had in 3 months and 6 months ect. You'll have an easier time with an approval if you try to game it.

They have their internal credit scoring formula but what you get as part of Chase Journey is TransUnion. Interestingly enough I got an account review from creditors which report Equifax on 3/24. I believe it has to do with my Chase Freedom reporting at that week. Chase while pefectly cool with me adding their cards the competitors not so much. I was 785 with Chase and 718 with Equifax which might be borderline for AR.

WTL1 · ‎04-22-2020

So far, no corroboration, so no indication this is true.

Knowing nothing about how these deals are struck, I would presume that the FI has limititations and guidelines for the credit lines to be provided when they contract with the Branding company. One would assume all the specifics for who, how, when and what if credit is granted under the Brand license to end users of credit lines is laid out in extensive, exhaustive detail.

If it is truly 2/24, no reason to think that it is more than a month to month pullback. If credit lines are reduced, that seems only to be an obvious caution to safeguard their financial position as defaults and lates increase.

VPExecutive · ‎04-23-2020

@KJinNC wrote:
I have posted before that I think 5/24 is a disservice to cobrand partners, and that's going to come to a head at some point when partners start asking why their cards aren't performing as well as competitors' cards.

I have never been involved in credit card partnerships or cobrand discussions, but having been in a lot of different types of corporate discussions and partnerships, my guess is that there were no discussions to speak of between Chase and their cobrands about 5/24. Though I know some people here think with that many big brains involved, every detail is analyzed carefully, I can say that is not the case with some different but parallel things at big companies (names you've heard of). Sometimes it's on line 237 on a document somewhere or maybe it's on a document that is referred to by the document you see and you'd need to request that document to be aware of the issue. Maybe you hear it mentioned in passing but don't realize that it's unusual for Chase or that it's an obstacle.

I don't think it's a huge deal, since 5/24 won't affect most people with good credit anyway, but I do think they are losing their cobrands a little market share and revenue. I can say personally, I won't fly United or Southwest until 2022 because of 5/24 and I am someone who pays annual fees for airline cards and buys tickets on airlines. I may not represent that many people but I know I represent 1 person and I am guessing it's more than 1.

Getting more extreme on this would be that much more of a disservice to partners. For core cards, Chase can do what it wants. Why they think this is a good idea but Amex and Citi don't think it's a good idea is a question for Chase, I can imagine reasons, and it's their business anyway. But as for cobrands: Amazon wants cards in people's wallets so they shop at Amazon and not Target or Walmart. United wants cards in people's wallets so they fly United instead of Delta or American. Etc, it's just a different dynamic for cobrands, where the card is more a marketing tool than it is about making money on swipe fees, interest, annual fees.

For anybody wondering why I keep posting about this ... it's something very visible to me since it blocks me from getting Chase cards, but to be honest, there are no Chase cards I'm dying to have. I just think this is an obvious unforced error, and I bring it up so that Chase and their partners may see it if they go online to see what people think about their cards. I'm not particularly trying to persuade MyFICO forum members.

I'm sure Chase has an agreement in place with all of their co-brand partners on 5/24, and they are mutual agreements to ensure people aren't churning, for example, the Amazon Prime card for the $100 Amazon credit every 3 months.

Why they would place the 5/24 rule on cards such as the Starbucks, Disney, or AARP card makes little sense. These cards don't provide valuable sign up bonuses. It also makes little sense to apply 5/24 to business cards, as these are used for business (not personal) purchases, and generate a higher volume of spending.

kdm31091 · ‎04-23-2020

@VPExecutive wrote:
@KJinNC wrote:
I have posted before that I think 5/24 is a disservice to cobrand partners, and that's going to come to a head at some point when partners start asking why their cards aren't performing as well as competitors' cards.

I have never been involved in credit card partnerships or cobrand discussions, but having been in a lot of different types of corporate discussions and partnerships, my guess is that there were no discussions to speak of between Chase and their cobrands about 5/24. Though I know some people here think with that many big brains involved, every detail is analyzed carefully, I can say that is not the case with some different but parallel things at big companies (names you've heard of). Sometimes it's on line 237 on a document somewhere or maybe it's on a document that is referred to by the document you see and you'd need to request that document to be aware of the issue. Maybe you hear it mentioned in passing but don't realize that it's unusual for Chase or that it's an obstacle.

I don't think it's a huge deal, since 5/24 won't affect most people with good credit anyway, but I do think they are losing their cobrands a little market share and revenue. I can say personally, I won't fly United or Southwest until 2022 because of 5/24 and I am someone who pays annual fees for airline cards and buys tickets on airlines. I may not represent that many people but I know I represent 1 person and I am guessing it's more than 1.

Getting more extreme on this would be that much more of a disservice to partners. For core cards, Chase can do what it wants. Why they think this is a good idea but Amex and Citi don't think it's a good idea is a question for Chase, I can imagine reasons, and it's their business anyway. But as for cobrands: Amazon wants cards in people's wallets so they shop at Amazon and not Target or Walmart. United wants cards in people's wallets so they fly United instead of Delta or American. Etc, it's just a different dynamic for cobrands, where the card is more a marketing tool than it is about making money on swipe fees, interest, annual fees.

For anybody wondering why I keep posting about this ... it's something very visible to me since it blocks me from getting Chase cards, but to be honest, there are no Chase cards I'm dying to have. I just think this is an obvious unforced error, and I bring it up so that Chase and their partners may see it if they go online to see what people think about their cards. I'm not particularly trying to persuade MyFICO forum members.
I'm sure Chase has an agreement in place with all of their co-brand partners on 5/24, and they are mutual agreements to ensure people aren't churning, for example, the Amazon Prime card for the $100 Amazon credit every 3 months.

Why they would place the 5/24 rule on cards such as the Starbucks, Disney, or AARP card makes little sense. These cards don't provide valuable sign up bonuses. It also makes little sense to apply 5/24 to business cards, as these are used for business (not personal) purchases, and generate a higher volume of spending.

I would assume Chase presented data to the cobranded partners and they agreed to 5/24.

As far as business cards, I see your point, but you have to keep in mind the level of abuse with people who sign up for business cards and have no legitimate business, and use them for personal spend.

VPExecutive · ‎04-23-2020

@kdm31091 wrote:
@VPExecutive wrote:
@KJinNC wrote:
I have posted before that I think 5/24 is a disservice to cobrand partners, and that's going to come to a head at some point when partners start asking why their cards aren't performing as well as competitors' cards.

I have never been involved in credit card partnerships or cobrand discussions, but having been in a lot of different types of corporate discussions and partnerships, my guess is that there were no discussions to speak of between Chase and their cobrands about 5/24. Though I know some people here think with that many big brains involved, every detail is analyzed carefully, I can say that is not the case with some different but parallel things at big companies (names you've heard of). Sometimes it's on line 237 on a document somewhere or maybe it's on a document that is referred to by the document you see and you'd need to request that document to be aware of the issue. Maybe you hear it mentioned in passing but don't realize that it's unusual for Chase or that it's an obstacle.

I don't think it's a huge deal, since 5/24 won't affect most people with good credit anyway, but I do think they are losing their cobrands a little market share and revenue. I can say personally, I won't fly United or Southwest until 2022 because of 5/24 and I am someone who pays annual fees for airline cards and buys tickets on airlines. I may not represent that many people but I know I represent 1 person and I am guessing it's more than 1.

Getting more extreme on this would be that much more of a disservice to partners. For core cards, Chase can do what it wants. Why they think this is a good idea but Amex and Citi don't think it's a good idea is a question for Chase, I can imagine reasons, and it's their business anyway. But as for cobrands: Amazon wants cards in people's wallets so they shop at Amazon and not Target or Walmart. United wants cards in people's wallets so they fly United instead of Delta or American. Etc, it's just a different dynamic for cobrands, where the card is more a marketing tool than it is about making money on swipe fees, interest, annual fees.

For anybody wondering why I keep posting about this ... it's something very visible to me since it blocks me from getting Chase cards, but to be honest, there are no Chase cards I'm dying to have. I just think this is an obvious unforced error, and I bring it up so that Chase and their partners may see it if they go online to see what people think about their cards. I'm not particularly trying to persuade MyFICO forum members.
I'm sure Chase has an agreement in place with all of their co-brand partners on 5/24, and they are mutual agreements to ensure people aren't churning, for example, the Amazon Prime card for the $100 Amazon credit every 3 months.

Why they would place the 5/24 rule on cards such as the Starbucks, Disney, or AARP card makes little sense. These cards don't provide valuable sign up bonuses. It also makes little sense to apply 5/24 to business cards, as these are used for business (not personal) purchases, and generate a higher volume of spending.
I would assume Chase presented data to the cobranded partners and they agreed to 5/24.

As far as business cards, I see your point, but you have to keep in mind the level of abuse with people who sign up for business cards and have no legitimate business, and use them for personal spend.

The solution to abuse for business cards is simple. Chase can choose to verify is the business is legit, rather than using the 5/24 rule. Chase can also monitor where their money is being spent.

iced · ‎04-23-2020

I don't quite follow logic posted that 2/24 is extreme or that this is going to hurt Chase. Anyone, frequent flyer or not, over 5/24 already has tripped the red flag of churning. This forum's member base may not think 5 cards in 24 months is much, but it is. Most people outside of the little niche churner/credit rebuilder corner of the country don't get 2 cards in 2 years, let alone 5 or 10 or 30. I could see an argument of 2/24 vs 3/24, but 5/24 is already a line in the sand that most will never cross anyway. In an economic downturn, I would expect them to tighten things up a bit more.

I personally know exactly 0 people who are 3/24 or higher. Not me, not my wife, not my family, not my friends circle. Before someone overreacts to this, I'm not saying nobody does get a lot of cards - this forum is proof of that. I'm saying you're not the majority. You're a very vocal but also very small minority.

As for profitability, I think that's also giving too much credit (no pun intended) to the consumer. 4 cards in 2 years is one every 6 months. Does anything here really think a bank wants a customer for around 6 months? In many cases, half of those months are high spend chasing a SUB, but then the typical 5/24 person is going to just move on to the next bigger and better SUB. SUBs aren't profitable for the banks; they're meant to lure good customers in with the hopes of retaining them. Restrictions like this cut out customers, yes, but those same customers are also the cheapskates who only come in when they have a coupon or there's a sale. Those aren't the good customers business want. There's a reason some small businesses hate Groupon and it's ilk.

kdm31091 · ‎04-23-2020

@iced wrote:
I don't quite follow logic posted that 2/24 is extreme or that this is going to hurt Chase. Anyone, frequent flyer or not, over 5/24 already has tripped the red flag of churning. This forum's member base may not think 5 cards in 24 months is much, but it is. Most people outside of the little niche churner/credit rebuilder corner of the country don't get 2 cards in 2 years, let alone 5 or 10 or 30. I could see an argument of 2/24 vs 3/24, but 5/24 is already a line in the sand that most will never cross anyway. In an economic downturn, I would expect them to tighten things up a bit more.

I personally know exactly 0 people who are 3/24 or higher. Not me, not my wife, not my family, not my friends circle. Before someone overreacts to this, I'm not saying nobody does get a lot of cards - this forum is proof of that. I'm saying you're not the majority. You're a very vocal but also very small minority.

As for profitability, I think that's also giving too much credit (no pun intended) to the consumer. 4 cards in 2 years is one every 6 months. Does anything here really think a bank wants a customer for around 6 months? In many cases, half of those months are high spend chasing a SUB, but then the typical 5/24 person is going to just move on to the next bigger and better SUB. SUBs aren't profitable for the banks; they're meant to lure good customers in with the hopes of retaining them. Restrictions like this cut out customers, yes, but those same customers are also the cheapskates who only come in when they have a coupon or there's a sale. Those aren't the good customers business want. There's a reason some small businesses hate Groupon and it's ilk.

I'm kind of on the fence with this one. 5/24 I completely understand as a business decision and it makes sense. 2/24 seems kind of overkill IMO, but at the same time I get your point. Most people in the general public choose a card and stick with it for many months/years and are not constantly signing up for new ones. If they are, they tend to be unprofitable anyway, so Chase doesn't care.

TSlop · ‎04-23-2020

I completely agree with @iced. Before I got into this forum, I got my first credit card in 2006. The next in 2014. Then the next in 2017. I've now had a few more since then. My wife thinks I'm crazy everytime I get a new card; she only has 2. I would agree and think the majority is not opening cards every 6 months (which would keep you under 5/24), let alone every year. It could be years between apps for a credit card.

However, the consumer that is not in the know can easily go over 2/24 without even knowing it. I did exactly that; I financed furniture from Wolf and then financed a phone from Google in back to back months. Boom, 2/24 and I am locked out of a credit card from Chase for 2 years. As a typical consumer, these 2 purchases wouldn't seem like anything out of the norm. But now, after not opening a new "credit card" in 10 years, I decide to get a new one. Maybe I saw Kevin Hart on TV and I want to apply for the CFU. Well, I can't.

I think if they were going to do a 2/24, they should relax the rules on the types of accounts that count. I'd make it ONLY credit cards, and not store cards like Google, Dell, Best Buy, etc. (unless they are an actual credit card that can be used outside the store). Maybe even exclude co-branded cards.