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Chase cash advance limits decreased?

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Regular Contributor

Re: Chase cash advance limits decreased?


@AverageJoesCredit wrote:

The only CA i would care about would be my Navy or credit Union cards as they are actually useful . This feature of a credit card is kind of ridiculous in that the issuer wants to flaunt the feature but its taboo to use or gives the image you are desperate.  I dont believe that but i know some people do. Why should they care so long as they get paid. They get crazy interest . No point but just another way to control us consumers. 


They care because all of their historical data mining shows that cash advances have a higher default risk. The credit card issuers are incredibly quantitative.   Even if we personally are not a default risk, as long as the algorithm stops those who are default risk in greater numbers, then we are just a casualty they are willing to accept.

 

 

Message 31 of 52
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Valued Contributor

Re: Chase cash advance limits decreased?


@Credit12Fico wrote:

@AverageJoesCredit wrote:

The only CA i would care about would be my Navy or credit Union cards as they are actually useful . This feature of a credit card is kind of ridiculous in that the issuer wants to flaunt the feature but its taboo to use or gives the image you are desperate.  I dont believe that but i know some people do. Why should they care so long as they get paid. They get crazy interest . No point but just another way to control us consumers. 


They care because all of their historical data mining shows that cash advances have a higher default risk. The credit card issuers are incredibly quantitative.   Even if we personally are not a default risk, as long as the algorithm stops those who are default risk in greater numbers, then we are just a casualty they are willing to accept.

 

 


The "crazy" interest they earn is necessary to cover the losses by those who default on cash advances. 

 

Cash advances aren't always profitable, mainly when the economy is good. So it's not easy money for the issuers. 

Scores, HPs/24 mos. (updated 10/09/20):
    Experian FICO Score 8 = 825, 1/24
    Experian FICO Score 9 = 813, 1/24
   TransUnion = 815, 1/24
    Equifax = 819, 0/24

Total 2019 rewards, incl. offers/deals = $1,709.07
Avg. rewards rate, incl. offers/deals = 3.92%

Total CL: $247,000

Cards (hover over for CL | interest rate | Date Opened):
Message 32 of 52
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Community Leader
Super Contributor

Re: Chase cash advance limits decreased?


@Credit12Fico wrote:

@AverageJoesCredit wrote:

The only CA i would care about would be my Navy or credit Union cards as they are actually useful . This feature of a credit card is kind of ridiculous in that the issuer wants to flaunt the feature but its taboo to use or gives the image you are desperate.  I dont believe that but i know some people do. Why should they care so long as they get paid. They get crazy interest . No point but just another way to control us consumers. 


They care because all of their historical data mining shows that cash advances have a higher default risk. The credit card issuers are incredibly quantitative.   Even if we personally are not a default risk, as long as the algorithm stops those who are default risk in greater numbers, then we are just a casualty they are willing to accept.

 

 


If the risk of defaulting is so high, why offer cash advances at all then?


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Message 33 of 52
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Regular Contributor

Re: Chase cash advance limits decreased?


@OmarGB9 wrote:

@Credit12Fico wrote:

@AverageJoesCredit wrote:

The only CA i would care about would be my Navy or credit Union cards as they are actually useful . This feature of a credit card is kind of ridiculous in that the issuer wants to flaunt the feature but its taboo to use or gives the image you are desperate.  I dont believe that but i know some people do. Why should they care so long as they get paid. They get crazy interest . No point but just another way to control us consumers. 


They care because all of their historical data mining shows that cash advances have a higher default risk. The credit card issuers are incredibly quantitative.   Even if we personally are not a default risk, as long as the algorithm stops those who are default risk in greater numbers, then we are just a casualty they are willing to accept.

 

 


If the risk of defaulting is so high, why offer cash advances at all then?


Is that default risk 100%? No.  So then there is money to be made...Smiley Happy

Message 34 of 52
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Super Contributor

Re: Chase cash advance limits decreased?


@Credit12Fico wrote:

@OmarGB9 wrote:

@Credit12Fico wrote:

@AverageJoesCredit wrote:

The only CA i would care about would be my Navy or credit Union cards as they are actually useful . This feature of a credit card is kind of ridiculous in that the issuer wants to flaunt the feature but its taboo to use or gives the image you are desperate.  I dont believe that but i know some people do. Why should they care so long as they get paid. They get crazy interest . No point but just another way to control us consumers. 


They care because all of their historical data mining shows that cash advances have a higher default risk. The credit card issuers are incredibly quantitative.   Even if we personally are not a default risk, as long as the algorithm stops those who are default risk in greater numbers, then we are just a casualty they are willing to accept.

 

 


If the risk of defaulting is so high, why offer cash advances at all then?


Is that default risk 100%? No.  So then there is money to be made...Smiley Happy


 

"High Default Risk" from cash advances really needs to be quantified. Overall CC delinquent rates look like 2.4% recently, so if CA delinquency is ____% is that A Lot? 

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 35 of 52
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Regular Contributor

Re: Chase cash advance limits decreased?


@NRB525 wrote:

@Credit12Fico wrote:

@OmarGB9 wrote:

@Credit12Fico wrote:

@AverageJoesCredit wrote:

The only CA i would care about would be my Navy or credit Union cards as they are actually useful . This feature of a credit card is kind of ridiculous in that the issuer wants to flaunt the feature but its taboo to use or gives the image you are desperate.  I dont believe that but i know some people do. Why should they care so long as they get paid. They get crazy interest . No point but just another way to control us consumers. 


They care because all of their historical data mining shows that cash advances have a higher default risk. The credit card issuers are incredibly quantitative.   Even if we personally are not a default risk, as long as the algorithm stops those who are default risk in greater numbers, then we are just a casualty they are willing to accept.

 

 


If the risk of defaulting is so high, why offer cash advances at all then?


Is that default risk 100%? No.  So then there is money to be made...Smiley Happy


 

"High Default Risk" from cash advances really needs to be quantified. Overall CC delinquent rates look like 2.4% recently, so if CA delinquency is ____% is that A Lot? 


I don't think it has to be high risk. Just a little more risky than a standard purchase. So perhaps Chase decided to silently lower to 5%.

 

After all, a CA can be used to give the apperance of paying off debt elsewhere. 

Message 36 of 52
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Community Leader
Mega Contributor

Re: Chase cash advance limits decreased?


@OmarGB9 wrote:

@Credit12Fico wrote:

@AverageJoesCredit wrote:

The only CA i would care about would be my Navy or credit Union cards as they are actually useful . This feature of a credit card is kind of ridiculous in that the issuer wants to flaunt the feature but its taboo to use or gives the image you are desperate.  I dont believe that but i know some people do. Why should they care so long as they get paid. They get crazy interest . No point but just another way to control us consumers. 


They care because all of their historical data mining shows that cash advances have a higher default risk. The credit card issuers are incredibly quantitative.   Even if we personally are not a default risk, as long as the algorithm stops those who are default risk in greater numbers, then we are just a casualty they are willing to accept.

 

 


If the risk of defaulting is so high, why offer cash advances at all then?


lol, THISSmiley Wink

Message 37 of 52
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Moderator

Re: Chase cash advance limits decreased?


@Credit12Fico wrote:

@OmarGB9 wrote:

@Credit12Fico wrote:

@AverageJoesCredit wrote:

The only CA i would care about would be my Navy or credit Union cards as they are actually useful . This feature of a credit card is kind of ridiculous in that the issuer wants to flaunt the feature but its taboo to use or gives the image you are desperate.  I dont believe that but i know some people do. Why should they care so long as they get paid. They get crazy interest . No point but just another way to control us consumers. 


They care because all of their historical data mining shows that cash advances have a higher default risk. The credit card issuers are incredibly quantitative.   Even if we personally are not a default risk, as long as the algorithm stops those who are default risk in greater numbers, then we are just a casualty they are willing to accept.

 

 


If the risk of defaulting is so high, why offer cash advances at all then?


Is that default risk 100%? No.  So then there is money to be made...Smiley Happy


You're making a bit of a circular argument here..."They won't do cash advances because of defaults. Not everyone defaults. They want cash advances to make money" 

 

CA is what it is. Not every lender abhors the idea, in fact, a lot  of lenders advertise it as  a  selling point for their cards since there is no fee and no separate higher APR for cash advances.

 

 

Message 38 of 52
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Mega Contributor

Re: Chase cash advance limits decreased?


@Remedios wrote:


You're making a bit of a circular argument here..."They won't do cash advances because of defaults. Not everyone defaults. They want cash advances to make money" 

 

CA is what it is. Not every lender abhors the idea, in fact, a lot  of lenders advertise it as  a  selling point for their cards since there is no fee and no separate higher APR for cash advances.

 

 


I don't think it is particularly circular.     Basically, any type of transaction has some risk for the issuer, and also some reward.    So they want to encourage "probably profitable" transactions, but also want to limit the downside if they guess wrong.     If, as I believe, cash advances are more risky, as times become more uncertain, reducing the exposure seems prudent.   (And it's not as if some haven't also reduced purchase CLs!)

 

Obviously, in an issuer-ideal world they would be able to identify which users are more risky and leave the others alone, but a) not so possible, and b) might be too expensive to implement and maintain, so easier just to do a more blanket decrease.

 

And yes, issuers do advertise it as a selling point because they know some consumers think it's something they may need/want.  Doesn't mean that they can't be very cautious when it IS used!

Message 39 of 52
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Established Contributor

Re: Chase cash advance limits decreased?

So far all 4 of my Chase cards are all still at 20% per latest statements. The most recent statement was 10/7. What is the earliest statement date that people are seeing this on?

 

They seem to be tightening up on issuing new cards, I'm not surprised they are squeezing elsewhere too.

 

As far as posters noting that Chase didn't notify, that seems par for the course for them. I've had a couple of auto-CLIs from them over the years, and they never emailed or notified via on-line document. I didn't know about the CLIs until I just happened to see them on my account, that's why I call them "stealth CLIs". 

Scores: Spt 20: EX FICO8 831, TU FICO8 828, EQ FICO8 823
AoOA: closed: 36 years, open: 25 years; AAoA: 11.8 years
Amex Gold, Amex Green, Amex Blue, Amex ED, Amex Delta Gold, Amex Hilton Surpass, BoA Platinum Plus, Chase Slate, Chase Amazon, Chase CSP, Citi AA Plat, Sync Lowes, Sync JC Penney - total CL 145k
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Message 40 of 52
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