2019 Shutdown Thread

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1. SHUTdn by Bank, Credit Card info. (@m3x, chs3 ,c1t1 and [email protected])
2. Length of account before closure and CL?
3. Average monthly account balance checking and savings?
4. Volume of ms per month and how many months?
5. Cycle CL?
6. Did you BP using both options?
- BP by issuing bank (@m3x, chs3, c1t1 and [email protected])
- BP by Vis/MC
7. Did you spell out the bank's full name in an internet forum?
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Old Aug 3, 19, 8:14 am
  #211  
 
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Originally Posted by Lobachevsky View Post
This argument makes no sense. If the bank loses on $100,000 in purchases with a 2% card in a month, doesn't it also lose on a $20,000 purchase with a 2% card in a month? The swipe fees are the same for spending $20,000 over 5 months as for spending $100,000 in 1 month.
This isn't subject to debate. Cycling a CL is a huge risk factor for banks and can easily lead to shutdowns. It increases risk to the bank (because credited payments can be returned) and is associated with fraudulent activity.
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Old Aug 3, 19, 9:54 am
  #212  
 
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Originally Posted by RedSun View Post
You are the one has been arguing it again and again.

If Citi does have net loss from paying out the 2% CB, it would certainly rather lose on the $20,000, not on the $100,000 for the month.
If Citi had a net loss from paying out 2% CB it wouldnít pay out 2% CB. As stated in other areas of this thread, this is all about risk - and cycling CL puts you at higher risk.
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Old Aug 3, 19, 9:54 am
  #213  
 
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I'm baffled by this thread, frankly. I understand that most posters are well-meaning and trying to help others, but the absolute certainty of views about various things that are at best guesses and at worst factually incorrect bothers me.

If CL cycling is "a huge risk factor" for banks, why isn't it a part of any credit risk score. FICO doesn't care about it in any of its dozens of models, nor does any other credit score model I know of.

How is someone who uses a Discover card to buy a gift card a "transgressor"? Discover doesn't prohibit purchasing gift cards. It only says that it won't pay rewards on purchases of cash equivalents. You're not a transgressor if you buy them. You'd have nothing to complain about if Discover didn't give you rewards on those purchases--that would be fair. Discover closing your card for those purchases, though, is deceptive, unfair, and violates the contract it made with you. Of course banks can do that and they do. But why do they get a pass here on the outrage that they should be receiving for violating the contract that exists between them and their customers? The purpose of this thread is to find out under what circumstances banks take these actions against us. Why is that necessary? Policies should be clearly stated and agreed to. As it is, banks are completely inconsistent. It's not always that they have hidden rules that anecdotal reports can uncover. It's that closures are often by whim, inexplicable--some rep had a bad day, some manager decided behavior was unacceptable that a previous manager was fine with. It shouldn't be that way.

If a prime borrower. (based on Internal/External risk model scores), tells a bank they make $100,000/year, is then issued a Credit card with a $20,000 credit limit, and then proceeds to charge and pay back in full their full pre-tax annual income reported in a single month, (perhaps repeated for several months in a row). What exactly should the bank conclude from this activity?
That people have ways to make payments that don't depend on their annual income, perhaps. Or that purchases are resold for a profit (which in a way is what manufactured spending is all about). Or that taxable income and real income are often separate. Does a brokerage firm worry if you trade much more than your taxable income in stocks each year?
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Old Aug 3, 19, 9:56 am
  #214  
 
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Originally Posted by radonc1 View Post
From Google:
Cash equivalents are stored-value products such as gift certificates and gift cards. The IRS specifically defines these instruments as cash equivalents and states that their value is considered taxable income to the recipient, regardless of dollar value. (when talking about giving a GC to an employee).

So if Discover says that they do not give the 2% rebate on cash equivalents, then GCs are excluded.
The fact that it took them 1 year to discover that a person was receiving a disallowed benefit has nothing to do with their TOS.
And since, logically, it is impossible for them to claw back the already received payments, they just went the next step and shut down the transgressor's account.
except Discover doesnít say anything about cash equivalents in their T&Cs.

ĒYou will not earn Miles on cash advances, balance transfers, illegal transactions, or on any cash you receive in connection with a purchase at the point of sale through our Cash at Checkout featureĒ
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Old Aug 3, 19, 10:27 am
  #215  
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Originally Posted by Billy2462 View Post

If Citi had a net loss from paying out 2% CB it wouldn’t pay out 2% CB. As stated in other areas of this thread, this is all about risk - and cycling CL puts you at higher risk.
This is not a valid argument.

Some cards have 5% or 5x rewards. We all know that almost no CC companies can afford to pay out 5% to 7% cash back or equivalent. But CC companies still offer them. With your logic, CC companies should not even offer them since they are losing money. This is within the entire card portfolio offering.

As to Citi DC, Citi has various other expenses to support its DC CC. Even if it gets 2% or even 3% swipe fees, if you count all of its card related expenses, I do not think Citi would make any $. Also, I do not even think Citi makes that high a swipe fee, particularly from the large merchants like Costco etc. Citi would rather people use other cards with no or very low rewards. It also makes money on its credit card balance portfolios.

This is why Citi DC has been one of the most popular cards out there, particularly with the masses who are not into points and miles.
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Old Aug 3, 19, 10:33 am
  #216  
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Originally Posted by Lobachevsky View Post
If CL cycling is "a huge risk factor" for banks, why isn't it a part of any credit risk score. FICO doesn't care about it in any of its dozens of models, nor does any other credit score model I know of.
Can you explain how Experian would know that you cycle the CL? It is not that Experian does not care, but it does not know. It relies on the data reported from the bank. The data is only a snapshot at a single time. Experian only sees that you have a $15,000 balance out of its $20,000 CL. That is all it sees.
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Old Aug 3, 19, 11:06 am
  #217  
 
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Originally Posted by RedSun View Post
Can you explain how Experian would know that you cycle the CL? It is not that Experian does not care, but it does not know. It relies on the data reported from the bank. The data is only a snapshot at a single time. Experian only sees that you have a $15,000 balance out of its $20,000 CL. That is all it sees.
I think his/her point is, if this were very valuable info, the CRAs would work with the banks to capture it and enhance their models.

BTW, on this subject, I've cycled my CL about 3x this month on a Hyatt card and, despite my last payment clearing, they won't free up my credit. I assume it'll happen when the statement cuts (or they're about to cut me). All payments have been pulls from the same bank (only bank) that has been attached for years.
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Old Aug 3, 19, 12:29 pm
  #218  
 
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Originally Posted by josephstern View Post
I think his/her point is, if this were very valuable info, the CRAs would work with the banks to capture it and enhance their models.

BTW, on this subject, I've cycled my CL about 3x this month on a Hyatt card and, despite my last payment clearing, they won't free up my credit. I assume it'll happen when the statement cuts (or they're about to cut me). All payments have been pulls from the same bank (only bank) that has been attached for years.
Exactly. And that's how some banks limit CL cycling on credit cards--they don't free up the credit limits for a while after payments post. For some cards I have, the first payment in a month frees up the CL immediately, while subsequent payments are held for a week or so, even though the payments are from the same source.
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Old Aug 3, 19, 1:45 pm
  #219  
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Originally Posted by josephstern View Post
I think his/her point is, if this were very valuable info, the CRAs would work with the banks to capture it and enhance their models.
This is not true. There is a set of rules between government, CC banks and credit bureaus on consumer credit card info reporting. It is not easy or easy for CBs to ask CC banks to report more data. They will certainly get push back since banks want to keep the data to themselves. It is not just important or not. Who gets to decide what is important?

CL cycling is not common and normal people do not do it. It is not necessary for the three parties above to change the reporting rules just to catch the MSers who are less than 1% of the CC cardholders.
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Old Aug 3, 19, 4:18 pm
  #220  
 
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Originally Posted by RedSun View Post
Can you explain how Experian would know that you cycle the CL? It is not that Experian does not care, but it does not know. It relies on the data reported from the bank. The data is only a snapshot at a single time. Experian only sees that you have a $15,000 balance out of its $20,000 CL. That is all it sees.
We finally agree about something!

And the fact that the CC companies only report once a month is a good thing for us. Imagine if they reported weekly, or worse, daily. Everyoneís utilization would be high. Many people, even those that donít engage in MS but still pay early to keep utilization reporting low, would see their scores tank. The credit bureaus would need entirely new scoring models to handle this.

As for cycling, not every issuer looks at it the same way. When I first got an Amex charge card for my business I had low ďspending powerĒ even though no CL is reported. I called Amex because I needed to charge more than $5000 in a month. The rep told me that I should charge $5000 then immediately pay it off. Then do it again each time I needed to make purchases. He said that would make their algorithm realize that I needed to have a higher limit and that I could afford to pay more each month. He said to do the same thing on my personal card if needed. Within a couple months I could charge $25k at a time. I now regularly charge $50k in a month without a problem.

Discover was very similar. When I got their card I wasnít happy with the limit, so I called to see if they would raise it. The rep said to just charge up to the limit and then pay it off and charge more. She said to call back after my third statement and theyíd consider an increase. I did, and they doubled my CL. I use that card for MS, but I mix in organic spending also. Iíve also only ever cycled it twice in a statement period (once for more purchases and once so it reports no balance).

So so you canít just say cycling is bad no matter what. Iím sure if I cycle Discover 5x in a month it would draw attention. And itís possible that both Amex and Discover realized that I was cycling the cards and reviewed it, saw nothing that they didnít approve of, and just let me keep up BAU. Iím also not charging more than my stated annual income on any one card in a 12 month period (except biz cards which arenít used for MS). And by paying early to have my cards report no balance, each card issuer has no idea how much I charge on my other cards.
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Old Aug 3, 19, 4:54 pm
  #221  
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Originally Posted by DBFL View Post

We finally agree about something!

So so you canít just say cycling is bad no matter what. Iím sure if I cycle Discover 5x in a month it would draw attention. And itís possible that both Amex and Discover realized that I was cycling the cards and reviewed it, saw nothing that they didnít approve of, and just let me keep up BAU. Iím also not charging more than my stated annual income on any one card in a 12 month period (except biz cards which arenít used for MS). And by paying early to have my cards report no balance, each card issuer has no idea how much I charge on my other cards.
The current credit reporting just tries to paint a fair picture of mass consumer's credit worthiness. The system is never perfect and is a compromise between government, consumer advocates, credit bureaus and banks. With the recent high profile CB file leaks and hacks, there is a huge concern with consumer credit and financial data. So I do not think anyone wants to disclose any more data. At a minimal cost, it is very easy to purchase some consumer financial data for commercial purposes. What if the data is used illegally? So it is a dead-end to get into the credit reporting and links to MS activities. No matter how good the credit system is, there is always some way to abuse it or take advantage of the system by a small number of card holders. It is up to the bank to enforce its own rules within the guidelines of the federal credit system.
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Old Aug 3, 19, 6:48 pm
  #222  
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Originally Posted by josephstern View Post
I think his/her point is, if this were very valuable info, the CRAs would work with the banks to capture it and enhance their models.

BTW, on this subject, I've cycled my CL about 3x this month on a Hyatt card and, despite my last payment clearing, they won't free up my credit. I assume it'll happen when the statement cuts (or they're about to cut me). All payments have been pulls from the same bank (only bank) that has been attached for years.
Originally Posted by Lobachevsky View Post
Exactly. And that's how some banks limit CL cycling on credit cards--they don't free up the credit limits for a while after payments post. For some cards I have, the first payment in a month frees up the CL immediately, while subsequent payments are held for a week or so, even though the payments are from the same source.
Cannot believe in these days and age there are still people, even those seemingly have been in the game for years, still think the FICO is a be all end all tool, as well as the data reported.

Banks risk assessment models are far more inclusive than just the CRA reports. There are many many factors involved, plus different cards have different models.

On top of that, cycling a $5000 CL probably causes less red flags than cycling a $15,000 CL for the same 3x. Common sense would tell you why.

Banks do care about cycling CL because essentially you are using A Lot More of the initial CL the banks are willing to extend to you based on the credit profile as a result of the info you put on your application. The bank initially approved you only 10K CL based on the info from the application. When you are cycling it 3x, that means the bank essentially let you use 3x of the initial CL, way above that its risk assessment model would have accepted it when approving your application. You still dont think this would not raise some red flag if you do this frequent enough?

Different banks also have different tolerances on cycling CLs - some are extremely sensitive some are not so much. It also depends on which card you cycle the CL - the banks are far more sensitive on cards earning its own currency - that means MR, UR, TYP, as well as A+ or Venture's "miles", or the CB equivalent. Banks are more tolerant to the cobrand cards that earn partner's currency - in this case Hyatt pts. You would catch a lot more attention should you cycle your Ink or Freedom 3x than on the Hyatt/BonVoy/United...

The above is an unscientific conclusion over the years from reading DPs posted publicly or DPs getting privately.
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Old Aug 4, 19, 7:08 am
  #223  
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Originally Posted by Lobachevsky View Post
Cycling your CL x times also doesn't violate any terms.
It does not, but banks don't like that. They see it as you intentionally trying to spend more than they allow you (which is your CL). Which means you are not they customer they want to have. If they don't like you for some reason, the only course of actions is to terminate relationship. Which is very obvious.

There is no point to argue what is in T&C. Banks are in charge in this game, not you.
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Old Aug 4, 19, 8:50 am
  #224  
 
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The bank may conclude that this person either:

A) owns a lot of real estate they paid all cash for in Miami
B) is a local governmental official that gets big Christmas presents from property developers
C) crewed on that infamous JP Morgan owned drug running ship
D) is the former mayor of the City of Baltimore

Originally Posted by Chris58 View Post
You're not considering a Bank's Government Regulatory Requirements under the BSA, "Bank Secrecy Act", I.E. "Know Your Customer"....
If a prime borrower. (based on Internal/External risk model scores), tells a bank they make $100,000/year, is then issued a Credit card with a $20,000 credit limit, and then proceeds to charge and pay back in full their full pre-tax annual income reported in a single month, (perhaps repeated for several months in a row). What exactly should the bank conclude from this activity?
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Old Aug 4, 19, 3:00 pm
  #225  
 
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Originally Posted by AlohaDaveKennedy View Post
The bank may conclude that this person either:


D) is the former mayor of the City of Baltimore
Which one???
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