Chase: To cancel before the app or after the app. That is the question.

Discussion in 'Other Credit Card Programs' started by merice107, Aug 29, 2013.  |  Print Topic

  1. merice107

    merice107 Silver Member

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    I just got the Chase Hyatt Visa (8/1/13). That was my 3rd personal Chase card. I got the BA Visa in June of 2012 and the United Explorer in November of 12.

    For an upcoming trip I really would like to get the Fairmont Visa...

    Should I cancel my United to open up some credit limit to be approved? Should I cancel my BA too? That has a much bigger credit limit.

    Or do I keep them open and just plan on calling in the reconsideration line and use them as bargaining tools?
     
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  2. NYCUA1K

    NYCUA1K Gold Member

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    I am curious. Is it a zero-sum game, meaning that the total size of the credit line is fixed at some number for each person, so that in order to get a new card one must either get rid of one of the cards or agree to have the credit line decreased on one or more of the existing cards? Depending on the answer I might have some insights...
     
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  3. edekba

    edekba Gold Member

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    Apply & see how it goes. Don't voluntarily give up your CL if you haven't hit your limit yet
     
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  4. NYCUA1K

    NYCUA1K Gold Member

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    I said that I might have some insights and this is what I meant (from my post last evening in another thread):
    It appears that Chase might have an internal cap on the credit line, and it may be a cap by CC category. I got the Chase Hyatt card earlier this year with a CL of $23K, which was bumped to $28K without my asking and after I had used the card only once. Then when I applied for the Chase Marriott Rewards Premier visa (a great sign up bonus package, BTW), they decreased my Hyatt visa CL to $18K and gave my new Marriott card the difference ($10K) so that the total CL for my Chase hotel CCs remained at $28K. I also have three Chase United Airlines cards (the original MileagePlus card, the Explorer and the United Club Business visa), which might also have been taken into account. However, they also recently bumped the CL on my Explorer without my asking, which made sense at the time because that is my primary card for every day purchases [until I hit $25k and collect 10K bonus miles then I switch to the UC card.]

    To the OP, it seems that your concern might be real, because changes in one's CL might indeed be required to be zero-sum once Chase has determined the total size of someone's CL based on their financial situation.. Give it a shot and let us know!
     
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  5. merice107

    merice107 Silver Member

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    Yea, I do believe I'll have to give up some credit limit from one of my other cards. I've had to do that with Chase before (though on my second card, the United, not my 3rd card).

    I guess we'll find out in late October!
     
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  6. jbcarioca
    Original Member

    jbcarioca Gold Member

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    In principle regulated lenders are meant to control credit extensions to 'single obligors' (i.e. single borrowers). For consumers there are many exceptions to the principle so several major credit card issuers actually do not know how many of their own credit cards a single person has. There are fewer of those today than there were even a year ago because lack of single obligor knowledge causes audit violations and regulatory questions. One of the largest US credit card issuers even received a Cease and Desist order a few years back due to inability of properly assess consumer asset risk (that, BTW, is a public record, although it is not easy to find nor understand).

    So today the better consumer lenders, explicitly including Chase, have a single obligor limit, not advised to consumers (usually called 'shadow' limit). They will ordinarily be happy to allocate that limit however the consumer wants it, never explicitly telling what the shadow limit is. If you want a higher total limit you usually must ask for it. BTW, Chase specifically also maintains historical records of all their cards to a single borrower including credit lines, usage and other history. Sometimes those closed accounts are still visible in consumer account information. American Express also maintains lifetime records including disputes, but usually do not disclose details to consumers either.

    So, I agree you should not close a Chase account until you call them and explain what you want to do. They do maintain your call history so your explanation will probably be read when you apply for a new card if there is any question at all.

    Finally, you should always try be as open as possible with issuers if you value the relationship. Above all Chase and American Express both have long memories. Both can and do cancel cards and even blacklist account holders whose performance is not meeting their expectations, sometimes in the absence of any bad credit.

    The usual disclaimer: this is posted on an internet bulletin board. It is not representing any issuer in any way. You will read otehr advice taht runs counter to this. When you do you need to understand as much as you can about the interests of the person whose advice you read. Do they earn money when you apply somewhere?
     
  7. NYCUA1K

    NYCUA1K Gold Member

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    I agree fully with the preceding. I have a long history with Chase -- in fact, it is the only banking history I have so that they are intimately familiar with my financial picture. I usually get instant approvals for Chase CCs except for the latest application for the Chase Marriott Rewards visa, which took 3 weeks to process. It took so long that I called them last week to find out what was going on, and they simply told me that this one has required extra processing. They must have looked at my pattern of spend on hotel stays and decided that the $28K credit line that they had given me on the Hyatt Visa was more than I needed since I had used that card only once, to pay my taxes, which also enabled me to meet minimum spend to get the sign up bonus (2 free nights and 2 suite upgrades), and have not used the card since. Thus, when I applied for another hotel CC, they just took the $28K credit line and split it between the two hotel CCs ($10K for the Marriott and $18K for the Hyatt). I am also sure that they looked at the other cards that I have in my credit record and knew that I have the HHonors Citi Reserve and AMEX Surpass. All in all, I am satisfied that they just split my credit line because I do have more credit for paying for hotel stays than I need (a $12K spend gets me the Hilton Honors Diamond status, which is the only one that I actively try to requalify every year). I can always request a CL increase if necessary and have no doubt that they'll approve it (in fact, if history is any indication, they will automatically increase the CL either for the Hyatt or the Marriott card after I spend quite a bit at their properties in Asian cities with no Hilton presence later this year).
     
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  8. vickers

    vickers Gold Member

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    I know companies will do this, but I didnt think they did it without the cardmember's approval....
     
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  9. jbcarioca
    Original Member

    jbcarioca Gold Member

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    Almost all credit card issuers raise and lower credit lines without prior customer permission. Some also regularly close accounts if usage does not suit the issuer, even for reasons unrelated to credit risk.
     
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  10. norge
    Original Member

    norge Silver Member

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    Do not cancel any cards before next app. If not auto approved call the recon. line and offer to move CL around. It they say "No" then, as a last resort, offer to close a card.
     
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