Changes to chase 5/24

[CreditInspired]

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@iced wrote:

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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.

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Thanks Iced. Hear, hear!!

 
I thought I was going to have the write the post, since I dont understand the grumblings about 2/24. It makes perfect sense to me. 

IMHO,  Whether this is a rumor or not, I believe all CCCs are going to be tightening (squeezing the hell out of) their financial belts considering 26M people are unemployed. Im willing to bet their algorithms have already been revised. Example: If Joe Blow's UT crosses 8.9% on any card, scan all his other cards for UT increases. If Yes, slash his limits.

Yes, it's ugly, especially for CCCs cream-of-the-crop customers. But, as many of us have said many, many times, it's not personal. Banks are in the business to make money. They have to always, in minute detail, protect their risk. 

So for me too, outside of this forum,  I dont personally know a single person who gets more than 1 CC in less than every 4-5 years. 

[CreditInspired]

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@TSlop wrote:

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.

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Yep, that's me too. Before I joined myFICO in June 2016, I had exactly one card--a NFCU Platinum--for something like 9 years. It never occurred to me to have any other card because I didnt know about rewards, points, and cashback.

After I went crazy in 2016 and got a slew of cards, I'm back to my normal self again and havent applied for anything in 17 months. And what's really grand about this. I dont feel I need to. 

[CreditInspired]

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@notmyrealname23 wrote:

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@sladesurfer wrote:

Why do people fixated about 5/24 chase? The only valueble  UR points to spend on is to transfer it to Hyatt.... Other than that its nothing spectacular. (dont flame me just curious)

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Well, let's see, $10,000 first class flight on Emirates complete with a shower in the plane. Singapore Air with your own bedroom. All Nippon Airways with a nice first class cabin thorugh Virgin Atlantic. And so on. All using mile programs you transfer into from Ultimate Rewards.

I mean, if you would really rather be in the back of the plane on a 14 hour flight for a whole lot cheaper, and just pass out in your middle seat, and that's perfectly fine for you, I'm not going to tell you otherwise. But if you know how to redeem miles, there are killer "wow" kinds of flights out there that are just as impressive as a suite in a Park Hyatt.

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I loved this post 😆

[Revelate]

Couple thoughts I didn't see mentioned:

• Underwriting policies are moment in time just like FICO scores, 2/24 right now might make perfect sense and they could always go right back to 5/24 or something else.
• Who's REALLY applying for a travel card right now?  For anything other than churners, and edge case scenarios like me and the likely Alt Reserve to cover 10K+ in Apple Pay spending, nobody.
• Cobrands have had exceptions to policy in past before, they could again.
• You can run your entire financial life through 2 cards with Chase, even with a good earning structure if you don't have much in the way of grocery spend: for the past nearly 3 years, 99.9% of my spend has been on either the CSR or the CFU.  2/24 no problem
• Average consumer has like 5 credit cards, period, over the course of decades.  
• Most people don't travel a whole lot anyway, and as COVID has shown it's a luxury outside of work and that work segment is probably changing now too.

All this to say, even if they make this change, outside of members of this forum and similar who really cares?  Plus Chase has ALWAYS made exceptions to 5/24 for their actual core banking customers, how strict they are varies over time but ultimately Chase wants to have your total financial relationship... there's plusses and minuses to that, they aren't good at everything, but that's the business model they started down the path 2ish years ago on when they kicked off the Sapphire Banking product.

It's basically a non-event outside of the credit card enthusiast world, and selfish person that I am, I'd rather Chase limit new applications to control their risk than taking the Synchrony route and cutting current customers off at the knees.

Want the Chase relationship?  Go open a checking account, move your direct deposit there, and don't be surprised if you get everything you want within a year or two but they want your business for life, it's not really more complicated than that.

[kdm31091]

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@Revelate wrote:

Couple thoughts I didn't see mentioned:

• Underwriting policies are moment in time just like FICO scores, 2/24 right now might make perfect sense and they could always go right back to 5/24 or something else.
• Who's REALLY applying for a travel card right now?  For anything other than churners, and edge case scenarios like me and the likely Alt Reserve to cover 10K+ in Apple Pay spending, nobody.
• Cobrands have had exceptions to policy in past before, they could again.
• You can run your entire financial life through 2 cards with Chase, even with a good earning structure if you don't have much in the way of grocery spend: for the past nearly 3 years, 99.9% of my spend has been on either the CSR or the CFU.  2/24 no problem
• Average consumer has like 5 credit cards, period, over the course of decades.  
• Most people don't travel a whole lot anyway, and as COVID has shown it's a luxury outside of work and that work segment is probably changing now too.

All this to say, even if they make this change, outside of members of this forum and similar who really cares?  Plus Chase has ALWAYS made exceptions to 5/24 for their actual core banking customers, how strict they are varies over time but ultimately Chase wants to have your total financial relationship... there's plusses and minuses to that, they aren't good at everything, but that's the business model they started down the path 2ish years ago on when they kicked off the Sapphire Banking product.

It's basically a non-event outside of the credit card enthusiast world, and selfish person that I am, I'd rather Chase limit new applications to control their risk than taking the Synchrony route and cutting current customers off at the knees.

Want the Chase relationship?  Go open a checking account, move your direct deposit there, and don't be surprised if you get everything you want within a year or two but they want your business for life, it's not really more complicated than that.

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I would tend to agree that people outside of the CC world won't really care too much. Even if they are above 2/24 they likely will just be "oh well" when they get denied and move on with their lives.

Like people said in this thread Chase has access to far more data than we do and they aren't stupid. If they move to 2/24 there must be a good motivating reason. And who knows, maybe it would be temporary and then back to 5/24. I think 2/24 is pretty restrictive, but I'm someone in the CC "world". And honestly if you want a Chase card bad enough no one is forcing you to app for cards. You just garden until you can get the card you want.

[CreditCuriosity]

Would love to know source of this rumor unless i missed it somewhere..  I still think they would be shooting themselves in the foot and their co-partners wouldnt be to happy as eluded to if they lost business due to it and they werent included in such decision.  Pure speculation at this point as this is only place I have even heard of said rumor..

[jdbkiang]

While it's true that most people have 3-5 cards max, there's also plenty of savvier people who aren't necessarily as extreme as we are but still open a new card or two every now and then. On top of that, how we feel about 2/24, while not a large percentage of the population, is still important since we are a disproportionately influential population group. One of us with 20 cards affects banks overall much more than the average guy with 5 cards. Even though there may only be one percent of us overall, I'm sure that we hold faaaar more than 1% of all cobranded travel cards. 

[iced]

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@jdbkiang wrote:

While it's true that most people have 3-5 cards max, there's also plenty of savvier people who aren't necessarily as extreme as we are but still open a new card or two every now and then. On top of that, how we feel about 2/24, while not a large percentage of the population, is still important since we are a disproportionately influential population group. One of us with 20 cards affects banks overall much more than the average guy with 5 cards. Even though there may only be one percent of us overall, I'm sure that we hold faaaar more than 1% of all cobranded travel cards. 

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It's not about how many cards one holds, but how profitable they are to be influential with a bank. Being savvy doesn't make the card issuers more money; in fact, it probably makes them less money. Shrewd is a synonym of savvy, after all. The 20-card crowd are only going to use said card if it's going to earn them a maximum personal return. That scenario is very likely to also be the least profitable for the bank (though still profitable).

A customer who goes to a store once every other month and pays full price is going to yield a better profit long-term over one who shows up every other week but always uses a coupon or only buys something on clearance. Or, for a travel analogy, a traveler who stays at a Marriott 20 nights a year but books on marriott.com and pays the normal rate is a better customer in Marriott's eyes than one who stays 50 nights via Priceline. There's a good reason the latter type of bookings don't earn status nearly as easily.

Sorry, but people in the 20 card demographic just aren't that important and their influence is limited to forcing banks like Chase to create rules like 5/24 in the first place.

[Citylights18]

My view of credit card rewards is they are a fringe benefit to be able to squeeze some extra value out of.

For instance I have my 401k contibution maxed out and a low deductable HSA plan with the contribution maxed out there as well. I've got tax deductable transit with parking downtown the equivalent of 2 dollars a day. Squeezed out maximum value from the pre-tax benefits.

So then why not try maximize annual rewards earning? If the value of the rewards amounts to only $2000 a year and that is $160 a month that you are leaving off the table, maybe more in some years depending on the situation.

But it doesn't take priority over landing a career to earn that money to spend or getting a good cost model together for your transportation and utilities. Its when you have nothing else to do that you worry about credit card rewards.

[Citylights18]

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@jdbkiang wrote:

While it's true that most people have 3-5 cards max, there's also plenty of savvier people who aren't necessarily as extreme as we are but still open a new card or two every now and then. On top of that, how we feel about 2/24, while not a large percentage of the population, is still important since we are a disproportionately influential population group. One of us with 20 cards affects banks overall much more than the average guy with 5 cards. Even though there may only be one percent of us overall, I'm sure that we hold faaaar more than 1% of all cobranded travel cards. 

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I read a statistic somewhere that the 7th percentile of population has 7 or more accounts. Here this is combining installment loans into the mix. But I don't believe closed accounts which are important in thick file calculations.

Thick file I believe tops out at what 25 historical accounts? It's usually those in their 50's and 60's that have that many due to the passage of time.