Tread Lightly with Chase and Its Credit Cards

We at Savings Beagle publish a variety of ways to use credit cards to save money.

These tips aren’t for everybody.  However, for those who can manage money, and not let the lure of multiple, high credit limit cards lead to out-of-control spending, our guidance can lead to significant money savings.

Whether the credit card plays involve maximizing cash back, or the accrual of Miles and Points to greatly reduce travel costs, Chase bank offers some of the best credit cards available.

So much so that many Miles and Points hobbyists hit Chase credit cards harder than most when going after free travel opportunities.

And in response, Chase has begun cracking down on what it sees as abusive behavior related to the use of its credit cards.

The 5/24 Rule

A while back Chase instituted the dreaded 5/24 rule. Basically, if you’ve applied and been approved for five or more credit cards from any bank within the previous 24 months, you will not be approved for a Chase credit card. There are some card exclusions, but the majority of Chase credit cards fall under this “rule.”

For those who aren’t Miles and Points hobbyists, getting 5 new credit cards in the previous 24 months likely sounds outrageous. However, for many hardcore hobbyists, 5 new credit cards might be what they apply for every 3 months.

Now there are rumblings that Chase is cracking down again, and potentially making changes to its Ultimate Rewards program that will not make anyone involved in this hobby very happy.

Chase Shut Downs

The first reason to tread lightly is a biggie.

There are more reports than usual of Chase shutting down all credit card accounts for some customers.

Why? Well, the trigger seems to be a few things:

• Holding many (10+) credit cards from any bank
• A number of recent credit inquiries
• Large purchases on Chase credit cards or an increase from your normal spending levels

Recently, Chase has offered bonus Ultimate Rewards points for spend made via mobile wallet systems (Chase Pay, Apple Pay, Android Pay, etc.). It appears large purchases on these platforms may also appear suspicious, and lead to a review and potential shutdown.

I find this odd since Chase is incentivizing this activity. But, I guess, they only want it used so much, and anything over and above unknown limits is a red flag.

Reports also state that it’s usually a new Chase credit card application that triggers a review.

So, even though you may be approved for a new Chase credit card, Chase may subsequently review all previous activity as a result of your application and use anything they find that falls outside of what they feel is appropriate to close all associated credit card accounts (and possibly bank accounts, too).

For most readers of Savings Beagle, this won’t be an issue. The information we provide is basic, giving just enough detail to step into the money saving/Miles and Points hobby without going into areas that likely would catch Chase’s attention.

There are plenty of other Miles and Points blogs out there for those interested going that next step…or more.

Still, if you’re maximizing credit cards in any way, it’s good to be aware of Chase’s recent actions.

Potential Changes to the Ultimate Rewards Program

Potential changes to the Ultimate Rewards program should be more of a worry to Savings Beagle readers and all hobbyists who enjoy maximizing credit card usage to enjoy nearly free travel.

Currently, Ultimate Rewards points can be transferred between different credit cards and even between different cardholders living in the same household.

Meaning, if I hold a Chase Freedom card, Chase Ink Cash business credit card, and a Chase Sapphire Preferred card (all of which earn Ultimate Rewards points) I can currently transfer points (or cash back as it’s referred to for the Freedom and Ink Cash cards) to my Sapphire Preferred card from the other two and use those points to transfer to travel partners for airline or hotel awards.

I can even transfer Ultimate Rewards points to my wife’s Sapphire Preferred account to pool our points.  And she can do the same with me.

But, rumors have begun circulating that the ability to transfer points between credit card accounts and between individuals may come to an end.

Which would be a huge negative for the Chase Ultimate Rewards program and the credit cards that earn Ultimate Rewards points.

Keep in mind, at this point, these are rumors based on, supposedly, leaked inside information on what Chase is considering.  There have been no official announcements as of yet.

What might this mean?  That cash back/points earned on Chase Freedom, Freedom Unlimited, and Chase Ink Cash business cards would not be able to be transferred to a premier Ultimate Rewards earning card such as the Chase Sapphire Preferred, Sapphire Reserve or Ink Preferred business card and then onto travel partners for outsized award redemptions.

And you may not be able to pool Ultimate Rewards points with another Ultimate Rewards account holder.

Both of which would be a big deal to Miles and Points hobbyists.

Wrap Up

Even though there hasn’t been any official confirmation, it might be best to transfer your Ultimate Rewards points to your preferred Ultimate Rewards account now just in case an unannounced change is made.  And continue moving those points when earned until there’s some sort of confirmation with regard to the future of the Ultimate Rewards program.

Hopefully, there won’t be significant changes, and movement of Ultimate Rewards points will remain as is.  Unfortunately, I wouldn’t completely count on that.  So it’s best to be prepared now for what may come in the next few months.

We’ll definitely keep a close eye on potential changes to the Chase Ultimate Rewards program, and alert readers to any definitive changes should they occur.