Chase Freedom switching to "Credit Access Lines"

Discussion in 'Other Loyalty Programs' started by viguera, Dec 5, 2011.  |  Print Topic

  1. viguera
    Original Member

    viguera Gold Member

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    An interesting -- if somewhat one-sided -- article on the LA Times discussing the switch of Chase Freedom accounts to vaguely-defined "Credit Access Lines" rather than explicit credit limits.

    The whole thing could have definitely been explained better -- even the Chase spokespeople seem to have a problem clearly defining what's going on -- but that doesn't seem to have stopped Chase from switching some customers over and requiring them to opt out, instead of the other way around.

    The article paints the practice as a way to make it easier for people to borrow -- obviously over a preset limit -- as a tactic for the banks to make money from finance charges.

    http://www.latimes.com/business/la-fi-lazarus-20111202,0,966733.column
     
  2. harry0233
    Original Member

    harry0233 Silver Member

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    This already applies for all Visa Signature cards which are allowed to go over the limit without fees since no pre-set limit is one of its features. Chase Freedom is an Visa Signature card so Chase just changed the name for marketing purposes.
     
  3. davef139

    davef139 Gold Member

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    This is bad generally as it will show your balance as high bal, a solild limit is good for utilization
     
  4. okrogius

    okrogius Silver Member

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    In general all visa signature cards do not report credit limit for the bureaus (since despite there being an actual limit, there is that whole idea about charges beyond it being potentially approved on a case by case [automated] basis). If the bureau doesn't get a limit reported, they generally use the highest reported balance (of those at the magic time of the month when they get their update, not necessarily what you had as the absolute highest balance). This is indeed bad for your credit score since a portion of it is based on your utilization percentage.

    Chase got enough complaints about it, they actually started reporting credit limits. This seems they may just be going back to the original mechanism.
     

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