Let’s first start off by saying April has not been a great start for us in the points community. It started with the IHG devaluation, followed up by a complete bust by Barclay, and Southwest has made a few negative changes as well. With that said, Chase is making a statement with their actions over the last couple of years.
Chase is Making a Statement
It is not any secret people love Chase credit cards. They offer so much value and Chase knows this. Banks want to emulate Chase, but are always lagging.
Take a look at the Sapphire Reserve, every bank is looking for that “WOW” factor. They want to have the success that Chase had, but haven’t really found a way to copy it.
Chase has the partners people want, that other banks don’t. Add that to a great combination of cards and it’s no reason Ultimate Rewards are probably the top flexible currency on the market.
Slowly Suffocating Churners:
A couple of years ago, Chase introduced that nasty “5/24 rule.”
Why did they do this?
They were tired of unprofitable customers only using them for the bonus. I know I took full advantage of them (I’m not alone). Other banks were trying to stop this as well, but with Chase it was different. You could still game the system and earn those valuable bonuses with other banks. Not with Chase.
Chase, 5 cards or more hard denial. They don’t care. As they shouldn’t, they aren’t stupid and they know what they want in a customer.
People have even changed their application strategy to be eligible for Chase cards. I could go on how crazy I think that is, but that isn’t important now.
I even fell victim to the “5/24” rule once it was released and received my first denial. It wasn’t until my most recent round of cards I attempted another credit card from Chase. I gave up on them, because I was no longer a welcomed customer.
Slowly Tightening Their Hold:
Over the next couple of months/years, Chase started implementing other rules. Further restricting access to their more valuable cards.
Not only did you have to wait 24 months to get the bonus again, but you now could no longer apply for the Sapphire Preferred and Reserve if you currently held one of them. If you had both already awesome, but if you’re new to the game you’re out of luck.
Chase realizes there is no reason to hold both. The only reason you’d open both is for that nice sign up bonus.
If you want a business credit card, be prepared to show some information to get it. A few years back, Chase was more lenient when it came to business cards (in my experience).
These restrictions were just another nail in the Churners coffin.
The IHG Devaluation:
This was one of the more recent changes and after seeing some of the messages floating around Twitter, I felt this really solidified Chase’s long term goals.
Chase was responding to individuals on Twitter saying this was a business decision. Which makes me believe Chase brought IHG to the table and said this needs to change. People weren’t using this card and only kept it around for that $49 “free room.”
Can you blame them? I have 2 of these cards and only keep it for that free night. Many people do that and many bloggers have written about how this card great for this benefit, but not worth daily spending.
Chase isn’t in the game to help you travel for “free.” They want to make money.
With this change, Chase fully understands people will cancel their cards because of this change. I’m on the fence about canceling my card as well.
Chase is ok with this.
They are thinning the gaming herd.
Adding Restrictions to Southwest Cards:
Just the other day, Southwest implemented the same rule across their personal credit cards as the Sapphire products. Making it just a little bit harder to earn the coveted Companion Pass.
Not only that, but Southwest just devalued their points, making the Sapphire Reserve a better option for Southwest flights.
And truthfully, I don’t think they are done with this. The perk is too good and too easy to earn. Plus, how may of you actually put spend on a Southwest card after you hit the minimum requirement? I’m sure not many of you, because Ultimate Rewards are a better option.
I think we will see another blow to this card by the end of the year, which will correlate to the time Southwest begins flying to Hawaii.
This change would bring about more cancelled cards, but again Chase will be okay with this.
You would initially think Chase would want to see a lot of customers with their products. Chase doesn’t just want quantity, they want quality. They want people who will actually use their cards, not the bonus seeker.
They don’t care if they have 2.5 million IHG cardholders (I just made that number up, I have no clue how many people have IHG credit cards), if 2.4 million sock drawer their card to use their free night at some fancy Intercontinental.
They’d rather have 100,000 real cardholders, instead of millions of fake ones.
Chase wants quality! They want to be the top card in your wallet, not the one you keep for the benefit **cough American Express Platinum cough**
Chase is making their statement loud and clear, if you aren’t a quality customer, we don’t want your business. A quality customer is a profitable customer.
They aren’t going to be hurt if I cancel my cards, because I’m not profitable for them.
Continuing to Thin the Herd:
Chase is making changes which will remove the gamers and keep the more loyal customers. They are slowing tightening their grip and churners are leaving, or aren’t eligible for their cards.
There are plenty of banks willing to play the game with us, so find them!
It is a fine line what Chase is doing. One one instance they are making a business decision, but are they pushing people out the door to not come back?
Some will hold a grudge and never go back to Chase if they have the opportunity. Other’s will wait and once Chase loosens up, they will take full advantage of the them. I’m definitely not the former in this case.
I don’t think Chase will change their stance until they see a true decline in meaningful metrics. That includes another bank stepping up to the plate and giving us a card that actually competes with the Sapphire Reserve.
Chase has made quite a few changes over the last few years. With each change their message becomes clearer and clearer. Theses changes reduce the churners and keep the quality customer.
With the changes Chase has made, I’ll be curious to see what Chase does with the Marriott cards after the SPG merger.