New Chase Credit Card Bonus Rules
This morning Doctor of Credit wrote an interesting article about some recent data points regarding Chase being more restrictive with their bonuses. Specifically, they are denying people who have opened five or more credit card accounts across all banks over the past two years are being denied by Chase for Ultimate Rewards cards.
The New Rules?
As was mentioned in the intro, there seems to be some new rules in effect for Chase cards. Many applicants are reporting being denied by Chase with the reason being they have opened 5 or more credit card accounts over the past two years.
Before I go into this any further, let me break down some of the data points:
- The 5 cards across all banks rule generally applies to authorized user accounts as well.
- This only applies to Chase branded cards such as the Freedom, Sapphire Preferred and Ink cards.
- Cobranded cards appear not to be effected as there are many data points showing approvals. (Including my wife just the other day.)
The Flyertalk Thread
A lot of the information about this is coming from Flyertalk. Flyertalk members are well known for giving misinformation and trying to discourage newcomers. I have read through the thread and believe most of the information is honest, but I’m not sure I believe 100% of what is being posted there.
With that said, I do believe the overall premise that Chase is tightening their rules is true. I have heard a lot of the same things being mentioned on Flyertalk from readers who were denied for cards, especially during the recent increased bonus on the Ink cards.
Chase Has Been Tweaking Their Products
Before we jump to conclusions for what this means ultimately, Chase has been tweaking their cards for the past year or so. They simplified their lineups by removing cards like the Ink Bold, Ink Classic and Sapphire.
They also changed benefits like removing the 10% checking bonus for the Freedom, the 7% dividend for the Sapphire Preferred and lounge access for the Ink Plus. All of these changes were designed to help the profitability of the product lines.
After the “Great Recession”, Chase really went all out at grabbing market share. They were very successful in the marketplace and now have a more mature platform of products. As part of that maturity, they can now go back and see what has worked and what hasn’t. My guess is that certain customers are costing them more money than they would like.
That doesn’t mean that those customers are unprofitable, it just means that someone determined that people who get 5 or more cards are not as profitable as they would like. The banks have a ton of data to analyze, so I’m sure this isn’t just a rash decision. Most of their moves over the past couple of years seem to have been calculated.
Being a Good Customer
Some people in that Flyertalk thread say it doesn’t matter if you are a good customer to Chase, since this new rule applies to everyone. That is incredibly shortsighted, since they have an entire portfolio of cobranded cards which can still be applied for and we never know if/when Chase will change their rules again after studying the impact of this new policy.
I absolutely believe it is imperative to use your Chase cards. I generally put small recurring charges on all of my cards and occasionally use them in non-bonused categories. Be a good customer to Chase and ultimately they will make it worth your while. (Or at least that strategy has worked incredible well for me over the years.)
My Strategy Going Forward
As someone who has been around awhile, I already have all three of the major Ultimate Rewards earning cards and thus don’t feel this will impact me greatly. Sure I may not be able to cancel a card and get the bonus again, but there are so many opportunities to earn Ultimate Rewards points outside of sign up bonuses.
I do not feel hurt by Chase and neither should you. Things change constantly in this realm and I for one am glad that these changes only apply to the Chase branded cards. It would be a much sadder day if they blocked access to their entire card portfolio. (Something I don’t see as likely since approvals are important to making those partnerships profitable.)
A Note About Ultimate Rewards
I love Ultimate Rewards, but it is no secret that they aren’t as valuable as they used to be. Just in the past two years United and Hyatt devaluaed and other than Singapore Airlines, Chase hasn’t added transfer partners or had transfer bonuses.
On the flip side, American Express has been giving out Membership Rewards points like crazy and continues to have decent transfer bonuses. Citi has also stepped up their game with ThankYou points by adding transfer partners and even their first transfer bonus as well. There is simply so much opportunity.
I am not freaking out and neither should you. Perhaps it is time to change your strategy a bit, but this is far from the end of the line. Yes Chase is changing the way they do business, but that doesn’t mean they won’t change again at some point. Change is the key word in this hobby and that continues to be the only truth across banks/companies/years.