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Chase should make the 5/24 rule public
Chase has done an incredible job promoting their new Chase Sapphire Reserve. They successfully leaked it, hyped it, and got everyone and their sister to get excited about it. It was even featured on yahoo finance for goodness sakes. I mean, it’s an outstanding product. As a result of this promotion, there has been an unbelievable amount of applications submitted for the Chase Sapphire Reserve. I, amongst a lot of other people, have been declined due to having opened more than 5 new credit cards in the past 24 months. The biggest issue I have with this rule is that it’s a private rule that negatively affects my credit worthiness. A credit application affects your score regardless of outcome, it’s an inquiry, but not disclosing a condition that impacts your ultimate approval influences the decision of submitting that application in the first place. Chase should make the 5/24 rule public and clearly state in their terms and conditions so that consumers are fully aware of the implied risk.
Don’t get me wrong, Chase has a prerogative to implement 5/24
I’m not saying that the rule in and of itself is unfair, Chase is a business and it should protect shareholders’ interest of profit. I mean, come on, they’re a bank: their whole business is MONEY. If they deem consumers unprofitable that have opened more than 5 accounts in the past 2 years than so be it, just make the policy known. My issue with the policy is that, historically, the factors impacting your approval and credit worthiness were based on your credit score, your income, and the total amount of credit extended to you. If I was denied for any of those reasons then it’d understandable, but to be denied on an arbitrary number of new accounts without disclosing that possibility when applying
Not disclosing 5/24 is bad customer relations
I would guess that Chase is filtering through thousands and thousands of applications in the past few days for the Chase Sapphire Reserve. I would also imagine that those who applied this quickly are fluent in points. I’d also guess that they have opened a few cards over the past few years, and probably more than 5. As a result, a significant portion of these applicants just got a ding to their credit, and who knows, maybe if the rule was disclosed they would have held off, or at least made a more informed decision.
- When Amex changed their bonus rules they included them in their terms and conditions.
- Citi did the same when they changed from 18 months to 24 months, and here recently when they revised the bonus to only one card in a family.
All of these terms are more restrictive. They are all to combat churning, and let’s be honest people, it was bound to happen. Pricing and terms were aggressive in the wake of the 2008 collapse, but now times are better so they are tightening up the ship. The fact that Chase has a rule that prevents approval and doesn’t disclose it ( and it injures an applicants credit worthiness) is not good customer relations.
One could argue that 5/24 is publicly known because it’s all over blogs like mine.
- Why is there a HUGE thread on Reddit trying to form some conclusion from data points as to whether or not it applies?
- If it’s publicly known then why are some cards excluded from 5/24?
- If that’s the case then why don’t reps tell you over the phone exactly when you could reapply?
- I just spoke to a reconsideration agent, who was very nice and friendly, and I straight up asked him when I could get it….he bumbled around and said sometime in 2017. I said, ” oh wow that’s a long time, so when exactly” he could only say “well, I can’t tell you exactly”
- If it isn’t a firm rule then state it. YOU MAY NOT GET APPROVED IF YOU’VE OPENED MORE THAN 5 ACCOUNTS IN THE PAST TWO YEARS. Then the risk is mine to calculate and assess.
I asked a recon rep if this application would hurt my credit score – that if I was being denied purely based on open accounts why wasn’t that disclosed in the application?
He flat out told me that nobody really knows what effects it will have: “There are a lot of factors that go into a credit score, but if you have too many inquiries that it does affect it.” Wait…what? Of course this will hit my score and the denied application will be on my report.
The rep told me that even though I have a long history with Chase and my score is excellent ( 800+) that the opened accounts in the past 24 months call into question my ability to pay them off if I were to suddenly run up charges.
- In reply, I said ” Oh my gosh, totally get that. then how bout this. Let’s close a couple of my Chase accounts and reduce the lines of credit so that your exposure isn’t as large and we can consolidate around the Reserve card. “
I’m sorry sir, that doesn’t change the total number of accounts you’ve opened in the last 24 months and wouldn’t affect the decision.
If the 5/24 rule can hurt the credit worthiness of a consumer, why wouldn’t they make that rule public?
Don’t get me wrong, I love the products of Chase and as much as I don’t like 5/24, I get it. I also think they offer an outstanding program with Ultimate Rewards and they have a huge slate of other valuable cobranded cards. Enforcing 5/24 probably protects the value of these programs going forward by stemming the dilution incurred through churning and repeated sign up bonuses. SO there is some lemonade to be made. I’m just saying…make the policy very clear so we know what we’re getting into.
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