Today we’re back with a double episode of the Milenomics² No Annual Fee Edition Podcast. In addition to the following news:
- 0:30 Office Depot/Office Max $10 off $300 MCGCs (link)
- 1:20 Simon Mall $1 off Visa Gift Cards (link)
- 2:05 Airline portal Holiday promo: 500 for $200 (link)
- 3:00 CapitalOne adds Emirates and Singapore at a 2:1 ratio ()
- 3:55 BofA Cash Rewards revamp early 2019 (HT Nick at Frequent Miler link)
- 5:20 Some Chase cards getting an additional 1x through year end on Apple/Google Pay (link)
…we tackle a detailed and real life situation in which a reader attempted to put together the Ultimate Chase Ultimate Rewards Trifecta: a Sapphire Reserve, Freedom, and Freedom Unlimited. Rather than the ideal type of stories you might hear elsewhere about all cards being approved and everything going perfectly, this story takes a turn for the worse, and does not end well for Chase or the reader.
Discussion starts at 6:00 on this.
A quick timeline (we cover this in the post, but might be easier for some of you to see here):
- March 2016 Applied for Sapphire Preferred – Approved
- March 2018 Decided to attempt to “Life the Chase UR Lifestyle”
- September 2018 Applied for Standard Freedom 5X – Approved
- September 2018, Downgrade Sapphire Preferred to Freedom Unlimited
- October 2018, Used non-expired 24-Month Sapphire Reserve App to apply. Denied, <48 months since last Sapphire card approval.
- Appealed, with no change in approval
- October 2018, Applied for Chase Ink Preferred. Denied, “Applied for too many cards”
What’s your take on how this was handled, Both by Chase and by the applicant? After you take a listen to the Podcast, come back to www.milenomics.com and share your thoughts below in the comments section.
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- Double Dipping on the ODOM Sale
- Updates on our current in-process mile and point earning techniques
- A deeper discussion of the ways we can seek and find real travel deals
- And much more
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Chase definitely seems to me to have been tightening up their application approvals this year. I just started the credit card game this spring. Having a high salary and excellent credit score with little debt, I thought I would sail through 5/24 and get all the cards I wanted in a couple months. Nope. In the end, I only ended up with 4 Chase cards (3 personal and 1 business) and after 4 rejections, I just had to move on. Part of the problem is that a lot of what I read/watched was from 2017 and it was already outdated.
Alex: Interesting data that you share. Thanks for this. Chase of 2018, 2017 and <2016 are really almost 3 different banks, at least with respect to their CC approvals and exclusionary language and policies.
Do you mind sharing the 4 cards you ended up with?
Sure, I ended up with: United Explorer, CSR, CIP, and Marriott.
I’ve got rejected for the old IHG (tried to rush an app when news of it going away in spring hit but then didn’t bother to call recon once further news came out about the horrible change to anniversary night), CIC, Freedom, and Marriott Business.
One thing that made it easier for me to decide to move through Chase more quickly was that I’m playing in 2 player mode, so I was able to sign up my spouse for CSR and Freedom Unlimited. Next year, I plan to change my CSR to Freedom and my CIP to CIC, so I’ll still have the Chase “Quatrafecta.”
Alex: Thanks for the quick, deatailed reply. One of my biggest regrets is closing (and not downgrading) a United Explorer. Effectively I’ll never again get access to that XN space.
Don’t underestimate your ability to lob an extra Chase card in sometime, especially if you tread a little lighter with P2. But you’ve got enough products that you should be fine. Reality is you need a Personal UR earning card and a Business UR earning card, and the details of your ‘Quatrafecta’ (I like Superfecta better, but that’s semantics) really are personal preference and how you earn/use your UR.
For me If I had to keep 4 cards it would be the Ink Business PLus(or a CIC), 2 5X Freedoms and a CIP. That would give me the maximum earning ability (5x on the CIC/Plus/Freedom and 3x on the CIP) and still some uplift. Can even bump a Freedom up to a CSR if I wanted to get 1.5cents in the UR Portal.
Yes, United was lucky pick up for me because I got it at the start of the year before I knew anything about credit cards. The extra award space is the best benefit.
I’ve already blown my spouse by 5/24 too but it’s probably still worth it for the other cards I’ve been able to pick up.
I’m not sure when I’ll get back to Chase with either of our accounts since they expanded 5/24. I was only a couple weeks from planning to apply for Hyatt cards for both of us, when the change occurred – so frustrating.
Earlier in the year, I was debating Freedom vs FU but we were both under 5/24 when the 3% FU promo was briefly available, so I quickly picked that up. It’s been great to use- I’ll be so sad when the one year is up.
Thanks for your suggestions on the 4 card Chase setup. I hadn’t gotten an Amex gold yet but if I get dining covered, then CSR might be redundant and your setup might be better with less annual fees.
Thought experiment: If you were Chase, what customer scoring system would you devise to allow the company to score each customer on the basis of whether their credit cards are used in a manner profitable for the company? I think it’s worth thinking about what such a system would look for, and strategies to employ in defense.
MDR: Love the thought exercise. I can’t imagine there’s a score that’s updated person by person and then used as a basis for shutdown (because I’m clearly a negative value customer but still alive)–but rather that analysis is done as a whole portfolio of cardholders. Tweaks that happen are then scored against the overall usage patterns. Becoming an extreme outlier, or eyes on an account might be the real ways shutdowns occur. Is there a defense for that? I doubt it–because the cost of becoming a truly ‘profitable’ customer would outweigh the gains we strive to take from the banks.
We discussed in Ep 6 of the subscriber podcast the idea of holding balances and revolving them to “appear” to be a more profitable customer. While Chase wouldn’t fall for this on an internal customer score–they might when pulling a CR for approvals. Showing $0 Balance and $200k in available credit I appear to be a zero-risk, zero- reward customer for Chase (beyond swipe fees, but an Optimizer could push that negative pretty easily). If I have $10k balances with Citi, Barclays, Amex, etc appear each month (and pay them off mid month, and recharge those lines) it is conceivable that I appear to be paying down $30k in credit at 20%+ interest rates.
What’s your scoring system/take on that angle? Or other readers’?
Based on the real-life case presented in this episode, it does appear that there is a scoring algorithm that is used for new approvals. (AmEx apparently also has such an algorithm given the sign-up bonus popup that sometimes appears when applying.)
I think it would be straightforward for Chase to determine whether a customer is likely an optimizer. So I guess it then comes down to what is best for Chase to do with this information. I can see making the assumption that equates an optimizer with someone who might get a card just for the signup bonus, thus providing the justification for denying this person any new signup bonuses.
I guess I’m thinking that while Chase might be OK with limiting the signup bonuses for this optimizing customer, they do not necessarily want to shut them down. They may be OK with losing money on this person’s credit card business, but since Chase has so many verticals, even this optimizer might need a mortgage someday. Or have enough assets to open a trading account with JP Morgan. Or need financing to for a small business, etc. Any of these could generate more revenue/profit than the losses incurred from their credit-card usage.
Given the data that Chase keeps on their large customer base, I’m guessing that they are probably getting pretty good at defining which types of credit-card customers later become profitable across all of their lines of business.
I haven’t listened to the podcast (yet) but looking at the timeline I think two mistakes were made.
1. Using a non-expired application after the rules changed. Definitely interesting to test but hard to picture it sliding by with Chase. Other issuers, yes, but not Chase.
2. A second application on the heels of a denial.