I think Chase Will Eliminate Points Pooling

Recently Frequentmiler reported a leak that Chase may end points pooling. I think it will happen and here is why.

First things first, here is the relevant bits from Frequentmiler’s post “Leak: Chase may end Ultimate Rewards pooling”:

We have received a report from a trusted source that Chase is actively looking at eliminating the ability to pool points in a household and the ability to move points to a more valuable card.

Also, here is the relevant bits from DoctorofCredit’s post regarding a Survey Chase sent out back in July 2017:

[Chase] wanted to know how users would feel about the following options:

1. When you combine the Ultimate Rewards points on eligible Chase Cards they would retain their original redemption value – that is, when transferred the points would retain the redemption value of the product they were initially earned on. For example you would not earn a travel redemption bonus if your transfer from a no fee card to a Fee card.
2. You can only combine Ultimate Reward points between no-annual fee cards or between annual fee cards. You cannot combine Ultimate Rewards points between a no-annual fee card and an annual fee card.
3. You can combine Ultimate Rewards points on eligible Chase cards at a 3:2 conversion ratio. For example if you would like to transfer 15,000 points from your Freedom Unlimited card to your Sapphire Reserve account, your Sapphire Reserve would be credited with 10,000 points (a 3:2 ratio). The transferred points would be granted the redemption value and options of the account to which they are transferred into.

The fact that Chase thought about this for a while, sent out a survey, and almost a year later is still thinking about it is a huge sign pointing towards negative changes.

Similar thing happened with IHG card – new IHG card survey (DoC) came out in June 2017 and (more or less) cards mentioned in the survey became a reality in March of 2018.

Obviously survey do not guarantee a change but what convinces me of these negative changes is the fact that Chase Ultimate Rewards, in its current state, isn’t competing with anyone but itself….and if left at its current state, it will only get far superior to its competitor.

Yes, being better than their competitor is a good thing but being “thrice” as better than their competitor and bleeding money does them no good. Chase Ultimate Rewards can be slightly better than its direct competitor, Membership Rewards, and still attract lots of loyal fan following. Note that I did not mention Citi Thank You point as a competitor because it is far far behind UR and MR programs.

Chase has cornered themselves with the way they’ve build the UR program. With addition of each new card, the UR program continues to get several fold better than it was before.

• Do you remember the first time you heard about earning 1.5x UR on everything through a no-annual fee card called Freedom Unlimited?
• Do you remember the first time you heard about 1.5 cpp redemption through a travel credit card called Sapphire Reserve that essentially has a net $150 annual fee for frequent travelers…or even anyone with 2 cents worth of brain?
• Do you remember the first time you heard about Chase providing cell phone insurance…on a card that earns 3x on cell phone bill? Then there is the fact that said card also earns 3x on advertisement (great for for big bloggers among us) and shipping (great for resellers among us).

The point I’m trying to make is that UR program, with an addition of each new card, has become too good for its own good. Chase needs to put certain restriction before they (eventually) release CSR equivalent business card…or some other UR earning card…or introduce something else that is ground breaking (more on this at the end).

Now, having said all of that, if I was in charge of Chase, or the Ultimate Rewards program, I would proceed with a nerf as well. UR program will be survive if they stop allowing transfer of points between household members. Hell, they’ll be fine even if they make points earned from no-fee UR card less valuable by implementing some transfer ratio rule or strictly restricting travel partner to points earned from CSR, CSP, and CIP. Sure the program will be devaluated  but it will still remain the top program.

Yes, devaluation sucks but let’s not forget the fact that 5% from Freedom and CIC is a healthy sum of cash back. The reality is that for a vast majority of us, 5% is more valuable than 2-3x we may earn from other program….so even if (regular) Freedom becomes a cashback card, like it has always been advertised, we’ll continue to use it. Freedom Unlimited on the other hand…

Lastly, do you remember the survey on Chase brokerage (DoC) and the possibility of cashing out UR at 1.5 cpp through CSR? I believe Chase is crazy enough to do this. I also believe that the requirement for opening such brokerage account with Chase won’t be anything huge, say, like that of Chase Private Client. Now, if I was Chase, I would likely not want people earning 5% cashback through no-fee card only for them to turn it into 7.5% cashback because they hold a certain card with $150 net annual fee and a brokerage account.

 

 

Think like a bank and proceed to dump your UR in the most valuable card you have. Accept the fact that some form of negative change to the Ultimate program is inevitable.