Chase Goes On the Record About Customers Who Apply for Too Many Credit Cards

Acquiring new credit card customers has become expensive for banks, with escalating signup bonuses. 50,000 or even 100,000 point offers are more expensive than the 15,000 points that were common 15 years ago. That only makes sense for banks if customers will spend a good amount of money on their card products over a long period of time, or rack up large fees (while paying off their balances).

Citibank just tweaked their rules about who they’ll give a bonus to. American Express will only give one bonus per card product in a customer’s lifetime.

Chase, though, seems to be tougher at even approving cardmembers for new products — not if they’ve had the products before, but if they’ve signed up for several cards recently. Yahoo! Finance wrote about Chase getting tougher approving new cardmembers who apply for ‘too many’ credit cards. (HT: Dan R.)

If applicants have opened more than five new lines of credit in the last 24 months, Chase underwriters are more likely to deny their application for a new Chase credit card — even if they’ve got stellar credit.

…Chase spokesperson Ashley Dodd told Yahoo Finance said she could not confirm that the 5/24 rule exists but did say having too many new credit accounts doesn’t look great. “To continue providing valuable offers that attract those types of customers, we have restrictions related to the number of new cards customers can receive in a period of time,” she said.

There’s one fact that the Yahoo Finance piece gets wrong, though. They report:

Chase hasn’t been shy about another rule that makes it tougher to churn and burn. Applicants who have opened a Chase credit card within the last 24 months and received a signup bonus will not be eligible for that bonus again.

In fact, the rule that they will only welcome back a customer with another bonus on a card they’ve had before if it’s been at least 24 months since they’ve had the bonus can’t really be called a rule that was implemented to make it tougher on folks who are just in it for the bonus.

That’s because this rule replaced the earlier one bonus per card product in a lifetime rule. It was Chase becoming more liberal, making it possible to welcome back past cardmembers who may have had a product before, and might want to become a long-term customer again in the future.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Pingbacks

Comments

  1. Not that my spending is going to break Chase’s bottom line, but it’s hurting them in my case compared to the competition. Because of the 5/24 rule, I was unable to qualify for a new Freedom Unlimited, a card was eagerly going to use at Costco where I do much of my spending, as well as anywhere else spending was unbonused. Instead, my Costco spending is going to go on the nice new Citi Costco who’s 2% cash back is competitive with the 1 pt/$ my Sapphire and Freedom will earn and I had the Costco Amex so that won’t count as an app. I also just got approved for the Barclay Arrival Plus Card, so I’ll put all other unbonused spending on that card until enough time has passed since my other applications (in about a year).

  2. How are you going to make money once the major issuers shut down the churn game? There are only so many Barclays and Comenity offerings

  3. I have gotten around denials by Chase, at least in the past, by calling them after I get the denial letter and offer to cancel one of the Chase cards I am holding in exchange for their reversing the denial.

  4. I’m trying Harvey’s method. Just got a postcard yesterday from the Evil chase bank saying I would not get the bonus on my new UAM+ after I just met spend req.

  5. Its NOT more expensive for banks to acquire new customers than it was 10 years ago. Prices have gone up & points/miles have been constantly devalued over the past 10 years. So the purchase price per point is less too for the banks.

    100k points today is NOT the same value as 100k points 10 years ago.

    Click-Bait title Alert !!!

  6. @John G — Yes it *is* more expensive for banks to acquire customers, the cost to banks of the miles they are buying is actually MORE than it was in 2009 not less despite devaluations.

  7. The purchase price has dropped a lot for miles/points compared to 10 years ago, why would banks pay more per point/mile ?
    Either the bank’s purchase dept. has is mis-representing info or they’re actually being duped or they just don’t care enough. Just another one in a series of bank bad decisions.

  8. @John G — in 2009 airlines were desperate for cash and sold miles in huge quantities to banks for a cheap price per mile. with airlines in better financial shape now, and banks competing aggressively for customers, the banks have bid up the price of co-brand credit card deals.

  9. I don’t believe most of you, including Gary Leff, do not understand how it works with banks and miles. For the most part, banks do not purchase miles for co-branded cards; they just manage the them. Miles are actually awarded by the airlines.

  10. Ok I’ll take the bait.

    If what you claim is a simple “Reaganomic” situation of supply and demand, meaning a few years back demand was sparse and supply overwhelming….. and all the macro nonsense mumbo jumbo anybody who didn’t fall asleep in Econ 301 has learned.

    Then I’m sure that if I get a bunch of my friends together and approach Goldman or one of the big houses with this “GREAT” idea to provide more seats in the sky to this overwhelming demand that exists, the issuers are just DYING to give me financing on some new leases.

    BS alert. There’s not a shred more demand in the market. In fact, what you’re seeing now is an attempt to renegotiate past deals which never goes over well in the real time market.

    Good luck.

  11. In case anyone finds this via Google as I did, I ran into the same issue that Bill n DC did. I received a postcard saying that I was ineligible to receive a signing for United Explorer Mileage Plus card due to having receiving a bonus within the last two years. I had never had a UAM+ card before, but I did get a Sapphire Preferred within the last two years.

    I called up ready to pitch a fit since I had been targetted for this offer and the service rep immediately told me that it was a mistake and that the two year restriction only applied to the same product (card).

Leave a Reply

Your email address will not be published. Required fields are marked *