Chase Credit Cards Closed Due to Too Many Accounts and Inquires

Update: for a while now I’ve replaced Chase referral links on this site to those of my family members. I’ve also cashed out a good chunk of UR. I guess that tells you what I think my odds are.

Typically Chase credit card shutdowns were related to doing something like anonymous bill payment, selling points, and maxing out 5x categories through MS. But as of late DPs indicating new type of shutdown has been floating around and it has nothing to do with above listed reasons.

This new type of Chase shutdown is a result of the following:

• number of credit card accounts
• too many accounts opened recently
• too many requests for credit or review of credit

I’m not making this up nor am I making an educated guess on these reasons. Above listed reasons are the official reason given in the Chase shutdown letter.

So why does this matter and why is this a big deal?

Previously if you did not do fishy stuff like anonymous bill payment, selling points, etc then you were pretty much on the safe side. But this new reason for shutdown clearly indicates that even if you don’t do those things you may not be on the safe side.

However, there are two good news. First, decent number of these shutdowns have been reversed but the fact that not all were reversed is worrying. Second, 100% of these types of shutdown happen after one applies for a Chase credit card (business or personal does not matter).

I believe that when an analyst sees a messy credit report during review of a credit card application, s/he hits a “review this bastard” button and sends the file somewhere else to be reviewed. I believe they’re training analysts differently now otherwise reports of this type of shutdown would have existed a year ago.

Above hypothesis is supported by my own case as I was shutdown after several days of applying for a Chase card. How much is “several days”? This time span can shortly detailed as such (1) Chase send me a letter regarding my application (2) I sent Chase a response letter (3) Chase, having reviewed my letter, sent me another letter (4) few days later I call, sort everything out, and I am told that my application needs further review (5) a day or two later all my cards are shutdown. My point being, if it was automated I would have been shut within few days of Chase pulling my credit report. It was a clear case of someone reviewing my app and going “fuck this guy”.

How to Avoid This Shutdown

Banks change the rule and you must change with it. You must give up on the old ways and adopt with changing times. Unfortunately, when rules change some churners like me end up being the data point. Fortunately for you, here is my breakdown of how you can avoid same thing from happening to you:

• If you’re below 5/24, I strongly urge against rushing through Chase cards. Currently rushing through 5/24 is often advised for those who can’t wait to get out of 5/24, but because of this new form of shutdown, I now deem such advice to be ill-advised.
• If you’re below 5/24 and thinking of maxing out 5/24 cards to its full potential then I urge you to rethink. In other words, you should think hard before you plan on doing multiple of these – 2 x CIP, grabbing all 5/24 business cards, double dipping CSP and CSR, and double/triple dipping at 5/24.
• If you’re a post-5/24 heavy hitter, then you should flat out abandon the idea of applying for a Chase card. This includes forfeiting the idea of churning IHG, Hyatt, Ritz, etc cards every 24 months and getting pre-approved in branch.
• To summarize what I’ve said thus far – don’t be greedy like I was and don’t submit Chase app when your credit report has tons of new accounts and inquires. If you’re a heavy hitter and want to open a Chase card then I strongly urge you to take a roughly 6 month break before you submit an app and even then you may not be exempt from a shutdown.

I would also somewhat encourage people to

• reduce credit limit that has been extended to you. This does not prevent a shutdown since I’m someone who limits credit limit across all issuers and I still managed to get shutdown.
• get rid of duplicate cards. Do you really need a fourth freedom card? Sure you can have it but should you get shutdown, good luck explaining that to an analyst who could possibly override your shutdown.
• flat out decrease the number of Chase cards you have. Do you really need a MP card when you make MPX purchase once a quarter?
• not put all eggs in one basket and only go for Chase only. Seek credit elsewhere as well. If you’re a newbie to credit cards then Chase is likely to flag you even if you take 2 years to collect 7 Chase cards with no non-Chase cards in your portfolio.
• not get too attached to the idea of maxing out 5/24 slots.

Why Worry When Shutdown is Reversible?

A good portion of these shutdowns have been reversed but that does not mean you’ll have a positive outcome. Additionally one must keep in mind that the DPs on this type of shutdown have been in the range of 10-20 and  we’ve only had a chance to peek at less than 3-4 irreversible shutdowns.

I recently saw a Chase shutdown DP of a regular churner with 10+ Chase credit cards and his shutdown was irreversible. This was the closest DP I had to mine and I thought to myself “if he had no change, what change do I have”?

I was positive that I could turn this shutdown around for myself but the further I talk with Chase the further I realize that this is a losing battle for me. However, I must say that 2 irreversible shutdown DP from regular churners does not prove all regular churners will be doomed in this case.

While I hope another regular churner in my shoe would have a better luck than I, the reality is that if you’re tons of inquiries and accounts then it is going to be really difficult to convince an analyst that you have any good intention. The only option churners like myself have is to be honest and admit that we’re just gaming status and points but that did not take me very far. I found that throwing in some keywords were helpful than other but maybe that is a topic for different day.

Anyway, to cut things short, my point is –

• if you can avoid being shutdown then why bother intentionally doing things that can lead to a shutdown even if it is reversible?
• generally speaking i think newbie churners with decent credit history will have good change of reversing the shutdown while regular heavy hitting churners will have very very very difficult time.

How is this Shutdown Different?

Long story short – I don’t know. Chase has been transparent to me about shutdown reason from day one but that is not like them. This made me believe that this is a “soft ban” and I should be allowed to get more cards in the future.

Also, Both my personal and business checking accounts are intact. When I asked if checking accounts would be shutdown, I was told something along the lines of “they haven’t been so far”. I have also been told by multiple chase representatives that I should be able to get more cards but when I questioned them on it, it was clear that none of them were certain.

I was sure that eventually Chase would welcome be back (i.e. this is a soft ban), well, until I received a letter stating why I was denied for the card I had applied for – “previous unsatisfactory relationship with this bank”.

I think this means that unless this ban is overruled (unlikely because of my profile) I’m done with Chase for life. It has been known that “previous unsatisfactory relationship” is known to eventually transfer over from credit card to banking and vice versa. Again nobody at Chase has confirmed this nor denied it nor have I seen a DP in this regard of anyone who has been shutdown for this reason.

P.S. if you’re new to this blog and curious about what cards I have, how often I churn, how rapidly do I apply, etc, then check my churning summary for year one (2016) and year two (2017). If that does not suffice, you may also check out Denials are Lessons #1, Learning from Denials #2, and Learning from Denials #3.