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Chase cash advance limits decreased?

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Established Contributor

Re: Chase cash advance limits decreased?

I think if it were up to the banks, they'd only allow people who don't need CAs (just getting one for convenience reasons) to get them, and block people who actually need a CA (because they're out of money) from getting one.

 

I'm reminded of that scene in the movie Traffic, where she's frantically calling up all her credit card companies asking how much cash advance she can get.

 

It's just too hard for them to tell the difference between someone who's in financial trouble, versus just getting a CA for the convenience, so I think right now (since hardly anyone is traveling, and a lot of people are having financial difficulty) they're just assuming that almost everyone that wants a CA might be in financial trouble. But rather than blocking them entirely, or taking adverse action against those who take them, they're just reducing their exposure. No idea why it seems to only apply to "most" cards, and not all. I'm assuming they're doing a risk assessment on each account to make that decision. I'm not surprised my CA limits got reduced, since I run up my Chase cards quite high every month, often spending more on them than I earn in a month (because of reimburseable work expenses), and I'm sure that looks risky to them.

    Total Loan Balance: $28k / $70k

    Total SL: $41.2k
Goal cards:



United 1K - 675,000 lifetime flight miles    |    Chase 6/24
Message 41 of 52
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Moderator

Re: Chase cash advance limits decreased?


@longtimelurker wrote:

@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!


I've always thought of CAs as something that's to be used only in an emergency if cash/debit/check (I think those still exist) isn't available for whatever reason. 

Pay it off as soon as it's posts, and you'll have nothing to worry about. 

Limiting CAs right now makes sense, as lenders probably don't want money from CAs to be used as finding for minimum payments, getting borrower deeper in trouble, and hastening default. 

 

As far as is it risky...sure, it can be. So can be those other actions we don't talk about, but I'll paraphrase this one guy, I believe his user name is @longtimelurker " Risk and reward"

Perhaps the possibility of getting card shut down is less risky for a person than a late payment would be. 

Message 42 of 52
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Mega Contributor

Re: Chase cash advance limits decreased?


@Remedios wrote:

 

As far as is it risky...sure, it can be. So can be those other actions we don't talk about, but I'll paraphrase this one guy, I believe his user name is @longtimelurker " Risk and reward"

Perhaps the possibility of getting card shut down is less risky for a person than a late payment would be. 


I don't disagree that sometimes CAs are OK/necessary evil/essential-in-the-circumstances.   But when someone incorrectly categorizes something as a circular argument, and if my meds aren't immediately to hand, well, it might be a bad day for the neighborhood pets.

Message 43 of 52
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Moderator

Re: Chase cash advance limits decreased?


@longtimelurker wrote:

@Remedios wrote:

 

As far as is it risky...sure, it can be. So can be those other actions we don't talk about, but I'll paraphrase this one guy, I believe his user name is @longtimelurker " Risk and reward"

Perhaps the possibility of getting card shut down is less risky for a person than a late payment would be. 


I don't disagree that sometimes CAs are OK/necessary evil/essential-in-the-circumstances.   But when someone incorrectly categorizes something as a circular argument, and if my meds aren't immediately to hand, well, it might be a bad day for the neighborhood pets.


Well, you might want to ask for a refill on your meds because that was a circular argument wrapped in fear mongering. 

 

Visual aid 

Screenshot_20201008-094702_Gallery.jpg

 

Message 44 of 52
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Regular Contributor

Re: Chase cash advance limits decreased?


@Remedios 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


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.

 

 


What you stated was never said by anybody.

 

As I said before. Cash advance is potentially a higher  default risk, not a 100% default risk....thus there is still money to be made Smiley Happy. APRs, credit limits, cash advance limits and the like are all carefully tuned to ensure profits even though a subset of card users are defaulting.  Chase has the internal historical data from past and present. They may have found that trimming Cash Advances would reduce their risk whic is probably elevated due to unemployment levels.

Message 45 of 52
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Valued Member

Re: Chase cash advance limits decreased?

Another datapoint:  My October statements just cut for Freedom, Freedom Unlimited, and United Explorer.  All three had their cash access lines reduced from 20% of the CL to 5%.  That's not a problem for me as I never use this feature.

October 2020 Snapshot -

FICO8:
VantageScore3:
Inquiries:
New Accounts: 1/24, 1/12, 0/6
AAoA: 10+ years
AoOA=AoORA: 33+ years
AoYA=AoYRA: less than 1 year



Total Credit Card Limits: $395k (includes $82k AU and $32k business)
Utilization: less than 1%

Installment Loans: none open (all mortgages, auto loans, and student loans FINALLY paid off, though 5 closed tradelines are still reporting)
Message 46 of 52
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Established Contributor

Re: Chase cash advance limits decreased?

My statement doesn't cut until tomorrow, but I checked and my cash advance limits are now at 5%.

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
Loans: Prosper (20k/3yrs 7.14%), Lending Club (10k/3yrs 5.89%), Chase car loan (35k/6yrs 0.9%)
Message 47 of 52
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Moderator

Re: Chase cash advance limits decreased?

Yup 5% of the line, dont care can take out the line in BTs or Loans that they offer, if these 2 things go away then the cards are torched. I have watched the banks become more crooked and greedy through out my lifetime, if you think they care about you and your family I have a bridge to sell ya....

Message 48 of 52
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Mega Contributor

Re: Chase cash advance limits decreased?


@gdale6 wrote:

Yup 5% of the line, dont care can take out the line in BTs or Loans that they offer, if these 2 things go away then the cards are torched. I have watched the banks become more crooked and greedy through out my lifetime, if you think they care about you and your family I have a bridge to sell ya....


More details please, always looking for good deals on bridges.  (I got a really great deal on Golden Gate last spring, just sent Mr Smith $10K in gift cards and he sent me a certificate saying it's mine.   So cheap!)

Message 49 of 52
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Regular Contributor

Re: Chase cash advance limits decreased?

My CA was previously $880 on my CFU (4400 limit) October statement down to $220. I guess even at a low CA limit to begin with, we are all still fair game, its better than them starting to cut actual limits.

Discover: $9600
Cap One QS: $1811
CFU: $4400
PPMC: $10,000
US Bank Cash+: $5000
AAOA: 2 yrs
Experian (fico 8) 787
Transunion (fico 8) 802
Equifax (fico 8) 784
Message 50 of 52
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