Chase closed my credit cards
 

Chase suddenly closed all my credit cards due to "too many inquiries..."

I have had 5 credit cards with Chase (and 11 credit cards totally) since last September.

During the last six months, I replaced two chase credit cards, and two other bands credit cards after one year usage of them.
(The replacement here means closing one previous credit card and open a new one with the same credit limit)

In the last week, I found Chase closed all of my credit cards. The rep said this is due to "too many application inquiries recently..." and I have too many credit cards (11) during a short credit history (four years).

Is it possible to reactivate them? Who could we talk with?

I have had a saving account with chase for more than two years. Previously I also had a checking account with direct deposit with them, but closed it about six months ago.

Any advice will be greatly appreciated.

Similar report here at post 491:

http://www.flyertalk.com/forum/credi...l#post18116434

Have you contacted with anyone?

Do you mind sharing what your usage pattern was? Did you just hit the minimum spend then move on to the next one?

If you opened 5 new cards within 6 months with Chase and you were just doing the bare minimum, that could be the reason.

Better not to close a credit card and open a new one. I suggest converting an old card into a new card (with the same issuer). That way, you keep your history.

I always pay the full balance.

Nope. I had 5 chase credit cards six months ago.
During the last two months, I replaced two chase credit cards with some other chase credit cards.

Any idea?

That's pretty brutal, they must have flagged you as risky or some.
Did you try calling them to figure it out?

This is not uncommon.

Like AMEX, Chase continuously monitor your credit profile and will take action if they deem you risky.

This might be the reason. Chase might have determine that you apply cards only for bonus and will stop using them after you receive the bonus.

Also, Chase would likely denied your future credit card applications until your credit report no longer shows a pattern of flipping cards.

So you're saying you already had 5 open accounts with Chase 6 months ago? Did you preemptively close your accounts? Or did you just transfer the credit lines when calling reconsideration?

As far as usage pattern, I meant for instance if you charge 3k to meet the spend, then quit using the card. If all of a sudden your usage pattern goes to zero and you keep spending on your new card that is going to trigger something internally.

If that's not the case, has anything changed on your credit report? I would think 4 years of history is fine compared to others that are getting 3-4 Chase cards with 2-3 years of history.

Yes. I already had 5 open credit card accounts plus 1 savings account with Chase 6 months ago. In the last January, I called the reconsideration dept, and an agent closed one credit card after my one year usage and transfered the credit line to the new chase credit card. In the last February, I did the same for another chase credit card.

In the last year, I also tried to apply three credit cards from other issuer but declined. I guess that's why bureau reported "too many credit inquiries..."

Any rescue for this?


I talked to a local Chase banker today, she told me that Chase will send me a letter explaining the reasons of deactivation in 7 days.

What does your overall credit picture look like? What are your FICOs?

It sounds like they were just uneasy with all of the new credit you were seeking compared to your credit report. There has to be more to it than just a few inquiries.

I agree, especially if three other applications with different issuers were declined.

I'd recommend checking the credit report to see if everything is in order. The FCRA allows for free checks of bureaus used to deny credit (or not give the best terms) within 60 days of the issue.

I suspect it also has something to do with your action of closing your checking account with direct deposit.

Sorry to hear about your experience and I am sure some of us can learn something from it.

I have a similar customer profile like yours with Chase. 3 cards in last 6 months and 1 card since 4 years. I use Chase as my primary checking account due to the Freedom bonus and mobile check deposit feature.

Maybe you can re-open a checking account and approach them again? For a basic checking account Chase is not all that bad. Maybe put just enough money in direct deposit to pay rent or mortgage.

I seriously doubt there is any way to reopen your closed Chase credit cards since Chase has decided you are a credit risk. But you can certainly call Chase to argue, hopefully after receiving their reasons in writing.

I would also get a copy of your credit report and see if there are any errors to correct. Check how many credit inquiries you have on each credit bureau. You'll want to take a break from credit card applications and focus on improving your credit. Accounts closed by the bank can hurt your credit, so I would argue to have the closure listed as "closed by consumer" on your credit report if at all possible.

It sounds like you did not wait 90 days between credit applications which is frequently recommended on these boards. Not that that is a reason to close your accounts, but it contributes to your high number of recent credit inquiries.

In most cases, you will not get the signup bonus for just converting, you need to actually open a new account/(cc).

I think what he meant is that he applied for a new card, and offered to close/convert whatever and transfer the CL from an old card to a new card.

Possibly. But he says the point of converting is to "keep your history". I don't think the history would be any different wether you close the cc while opening a new, pr if you do it beforehand.

Yes, but you get no bonuses. I presume the only reason the OP was opening and closing so many cards was to "churn" for lots of bonuses. That is not possible if you "convert" cards.

The basic problem of the OP was apparently being too aggressive with churning while having too new a credit history. Just because someone with a multi-decade credit history can churn a certain amount forever does not mean person with a few-year credit history can. Just because a person with a short credit history may be able to churn a bit does not mean that they won't suffer consequences if they "push it" too far.

And as this thread indicates, the consequences may not be immediate, so the churner may not realize they've churned "too aggressively" until "too late".

I received the letters from chase today.

The reasons listed are:
1. Existing accounts not open long enough
=> I don't understand this since my membership with Chase (the previous Wamu) since July 2008

2. Not enough information on bankcard accounts
=> Maybe this is due my two Amex charge cards, which have no credit limit by default. But Amex do setup a limit for me several months ago.

3. Too many accounts opened recently
=> During the last 5 months, I only replaced two credit cards from Chase, and none from other issuers.
Although in the last November and December I attempted to apply three credit cards from different issuers, all new applications were declined.

I requested the credit report from Experian, and expect to receive the letter within 10 days.


Any good website provide free or cheap credit report?
creditkarma shows only few records in the days when we logined in their website.

What was on credit karma and what was the score? That is basically your Transunion report.

How many accounts did you have before adding additional Chase cards? If you only had one account (former WaMu), then in the last year added all of the Chase and Amex cards that is probably what did it. Also if Amex put limits on your charge cards you obviously had a financial review, so something else is going on.

annualcreditreport.com will let you pull a report once a year for free from each of the big 3 (experian, equifax, transunion).

You could also have gotten your experian report for free online. If you google "experian fcra" there's a link that allows for the "negatively impacted" free credit report to be gotten online. This can be done with equifax too, and probably transunion, though I have never tried.

I am afraid your history with WAMU does not really count. What Chase sees you is from the date you get a real Chase card, not from the old WAMU card converted to a Chase card after WAMU went under. WAMU, like it or not, is being viewed as a bank generated bulk of its business from the lower end of the credit market (sort of like C1's image though not as bad.)

How many years of credit history you actually have?

As someone posted upthread, those who have only a few years of credit history initially could get lots of cards when they started out their "game" but without a solid history (like over 10 years) and especially long history with a particular issuer, their initial successes of grabbing bonuses may come back to haunt them.

Once the bank closes your accounts, it takes a very long time to be able to do business with that bank again. It also leaves some bad marks on your credit report as the accounts are closed not by customer but by the bank. (involuntary closure).

I would suggest you talk to Chase again on No.1 and No.2. You have no argument to do with No.3.

There's a good thread on Dan's Deals containing reports from people with similar experiences with Chase closing their accounts. You might find some help there. A few of the guys reported that they were able to get Chase to reopen their accounts. So, there's hope, but it does sound like a PITA.

By far Chase is the most difficult card company. I have dealt with them all. Burned a few times by Chase. And I have AAA+ credit and virtually no hassles over the many years in various programs. They are the worst.

Happy's points are well made, as usual. It's a lot easier for me at 58, with a long and good credit history, to churn cards than it is for someone at 25 or under. Creditworthiness is maybe the ultimate YMMV, but a factor that works in favor of the older churner is simply that banks probably don't expect this kind of behavior from us. I had taken five credit cards, in total, from my first in 1982 to 2010. In the last eighteen months, I've taken ten. Of course, that's really nothing compared to most folks on FT. But, it's still a lot more than the average consumer.

As I believe that financial institutions will eventually figure out that they don't want customers who take cards only for the bonus and then cancel before the annual fee is due (which creates a huge number of new accounts, one metric the banks measure, but eventually creates huge card turnover, which they probably don't want), I think that banks will eventually rewrite their standards to make it more difficult to do churning, even for folks with a good credit history, and to encourage holding cards longer. To me, Chase has begun this process with retention bonuses built in (Sapphire Preferred, 7% annual bonus; Southwest, 3000 or 6000 point annual bonus depending on card taken). Barclay's has followed with the US card's 10K annual bonus. Others are sure to follow.

Still no reason not to take advantage while we can. . .

UR Points lost as well?
 

OP lose his UR points accumulated as well?

OP do you carry a balance on your Chase CCs?

From an actual case I have learned about, Chase actually is pretty good in letting you have your UR pts. In fact in a particular case when the Chase closed the accounts, the cardholder had not quite yet meet the spend requirement on the SP, but Chase actually sent a $500 check despite closing all the accounts. My guess is, banks are walking a fine line - they want to mitigate their exposures in credit risk while they need to make sure they are not sued or being complained to the government agencies for deceiving customers with sign up bonuses only at the end closing customers' accounts citing "business decision".

I have also learned about similar approach by BofA recently.

If Chase flagged someone as a card churner, why not just bar him from opening future accounts? Why close the accounts that he has already opened (and presumably met the spend on) unless it is just for punishment and deterrence?

I believe this is the reason. Also just because Chase found out doesn't mean he/she will stop churning cards with other issuers (still seen as a "potential credit risk").

That might very well come to that (hoping desperately to be wrong:D)
But the reason Chase closes accounts is not to deter churning. For one reason or another Chase must consider you a credit risk in order to do that, and in that regard churning is the least of their problems.

How do I know? Before my last application for United I called Chase and asked them directly if I was running a risk of having my accounts closed (holding 6 other Chase cards I believed I had a good reason to fear that). The CSR checked my accounts and said there were no problems with them. She encouraged me to apply and noted they would never close an account without a good reason. What they consider a good reason is unclear, but churning ain't that. On the other hand, I believe that putting cards in a sock after getting bonuses is like asking for trouble. Make small purchases if you must but do make some on a regular basis, because even it they don't monitor this kind of behavior just yet, they certainly will soon enough.

What are the flags that will cause card issuers to close all your accounts?
 

I've been reading about many reports lately of how Chase goes berserk and close all your accounts for no good reason.

Does anyone know what triggers these kinds of actions? Too much total CL relative to income? Too high a utilization? Opening too many cards per year?

Also, is this phenomenon Chase specific, or has other card issuers been known to go berserk on their customers?

No, American Express has a process called a Financial Review which is widely discussed in the Membership Rewards forum. Typical thread here:

http://www.flyertalk.com/forum/ameri...on-merged.html

A credit card is an unsecured line of credit. Essentially, American Express requires you to provide evidence that you have the means to continue to pay, which is distinct from having a track record of payment.

Similarly, Citibank asked some Chairman card holders, including me, to provide proof of financial assets to keep the card, but they did not suspend it while waiting for the documentation.

You should switch your user name to "The Chairman", you've earned it. ^

> close all your accounts for no good reason.

I doubt banks go around closing accounts "for no good reason". I can think of a lot of reasons why people who habitually spend the minimum to receive the bonus would get blacklisted. Let's say a Visa Signature card's interchange is 2% for simplicity sake. When you get a Chase Sapphire Preferred and spend $3,000 to get $500, Chase has only made $60 interchange through the merchant processor. They gave you $500 bonus which means they have a net loss of $440. In order for them to recoup the $500 bonus payout, you will need to spend $25,000. If Chase does not predict you will do this for the life of the card, then I could see them blacklisting "bonus abusers". The easiest way to predict a "bonus abuser" is someone that spends a little past $3,000 then stops using the card. It'd be easy to calculate a "bonus abuser" score based on spending pattern.

There always is a reason. Some people abuse the application process (6-8 apps every few months) with little credit history. Or it could be as simple as someone making an income that is not proportionate to their amount of available credit. Example: someone making 25k a year who has somehow gotten 100k of available credit. Also as sunk818 said they can easily track a persons spending pattern and that goes both ways. Whether they are just spending for the bonus or if something in their credit/financial situation has changed.

I think sometimes we don't hear the full story of people who get shut down by Chase or others. Just my opinion. Now watch all of my Chase accounts get shut down for no reason after posting this! :p

too many rewards
 

Chase closes all your accts when you take them up on their 5% UNLIMITED cash back for the first 6 months-they close your accts if you receive too much cash back-and they close it right before your statement closes and refuse to honor your rewards! so you lose! Chase is doing this like crazy right now.

I'd love to see just one of your credit card statements for that card.

Care to post your transactions for a month?

I have never seen any other card company like Chase. They are miserable. Any bonuses you get, you need to spend immediately or talke a chance if they close you, they take the points. I had several bad situations from them and I have AAA credit and do huge volume with a lengthy credit history.