UPDATE: Reinstated. Maybe I will do a followup post later.
As you might recall in December of 2017, Chase shut my credit cards due to too many recent inquires and accounts. Then in first half of 2018, my player #2 got all Chase cards closed due to number of inquires and existing accounts. Now in the latter half of 2018, Chase has shutdown my player #3 for similar reasons.
Player 3 Stats
Until less than a year ago P3 was 0/life with non-existing credit history. P3’s first card with Discover obtained in December of last year.
P3 obtained $49 annual fee IHG in March of 2018. It was right around the time when it was rumored to go away. Almost a month later P3 successfully grabbed CIP. P3 had severely reduced credit limit on both cards. P3 applied for Ritz-Carlton credit card in late July when it was getting pulled away by Chase. P3 was approved for Ritz with it’s minimum credit limit of $10,000 and a few days later all 3 Chase credit card of P3 was shutdown. P3 did not reduce credit limit on Ritz.
P3 was not doing any sketchy behavior of any kind either.
Closing Thoughts
If the Ritz wasn’t going away, we would not have applied for it. We were planning on holding out on apps till late 2018 and grabbing Southwest cards over a course of several months. Oh well, no more Companion Pass in 2019.
8 comments
I’m guessing their short credit history played a part in this, but dang. Chase isn’t playing around.
I think chase is just trying to reduce their exposure to rewards maximizers in general. They just had that huge expense hit in their last earnings report for satisfying reward redemptions and there is probably an internal focus on reducing exposure to gamers who will drive up these expenses. They were clearly hoping 5/24 would help steer gamers away, but they are likely not happy expenses got so high. It may not be enough anymore to just avoid sketchy behavior like cycling your limits or MS. But they may now be looking at you as a customer and whether or not they make money on you. Opening a card, spending 3k to get the bonus and never touching it again is likely a sign to Chase that you are a reward maximizer and that upsetting you is not really going to cost them any real business. Move some investment products to them, open a business account with them, buy a CD, use their cash management portfolio management or if you have a business, use them for merchant servicing, payroll or something. I’ll bet ya that would make a difference if the credit analyst has to get angry calls from other chase departments when a customer cancels all of his lucrative business with Chase over a card denial.
It’s possible but there have also been cases of Chase Private Client being shutdown. Also Chase was my P2’s main bank (i.e. P2 put all money on Chase) yet that didn’t help. It seems there isn’t any hard and fast rules to these types of shutdown.
I agree there is no hard and fast rule, which I really interpret as evidence it is profitability driven. Unfortunately the gamers who are sharing data points about their shutdowns don’t share their profitability to the bank, because I’m sure they themselves don’t know what it is. You pointed out “P2 put all money in Chase” but that isn’t really helpful in determining if that helped or not. It depends on how much and what products P2 was are using. If “all money” was say $10,000 and it was in a savings account, Chase would look at that as they could make 3% net interest margin so P2 would be worth about $300 a year to them. One could see why paying such a customer $700 worth of rewards 5 times every 24 months would be business they are willing to lose if they would only make about $600 every 2 years in profits.
Now, if P2 also had his retirement account with them, in an advised account where they make 1% fee and he has $300,000 in his retirement account, they would now see him as a $3,300 a year profit customer who might be worth spending $3,500 in rewards on every 24 months. Their systems are quite advanced nowadays and it is quite easy for banks to access this kind of analysis in real time. My advice would be to treat Chase very well with giving them your profitable business because their card portfolios are quite valuable to have access to. Chase is viewing its rewards as a rebate of some of the profits it generates from you. If you are not profitable to them, tread very lightly and hope they don’t notice you are getting over on them.
> Unfortunately the gamers who are sharing data points about their shutdowns don’t share their profitability to the bank
The reason why people don’t share that bit is rather obvious one – most people aren’t going to tell how much they have and what they have to strangers on the internet. And even if they did, it would always face some major skepticism. But based on some data points have been shared, mostly privately, I think that profitability can’t the only factor Chase’s system considers.
However, as strange as it may sound, I was told about the same “profitability” approach to Chase shutdown this morning…by an interesting source.
True enough, folks get weird about talking numbers and I get that. I don’t think the profitability approach is a big secret or unique of me to say. I just have read a bunch of these shutdown articles around the blogosphere lately and there seems to be genuine concern and confusion behind what is driving the shutdowns, myself included. I just find myself always wondering if the person was doing something I could avoid doing but can never really get a feel for whether or not the person was a good customer or not. To me it is obvious that if you cost them more than you make them they will be fine showing you the door. But hearing data points like “all money” and “even private clients have gotten shutdown” don’t really help me understand. Because as I pointed out, it depends how much and which products is represented by “all money” and a person could have gotten “Private Client status” by indicating he would move 250k to the bank and then either not following through, or subsequently transferring those assets out. But this is just speculation on my part, because those details aren’t apparent and likely factor in quite heavily in my opinion.
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