Credit Card Rate Hike Because of Too Many Inquiries
Author: chrys
Posted: Tue Feb 13, 2007 2:20 pm
Post subject: Ratejacking With Clear Record Except For....
Dear Experts:
I was dreading this. Chase decide to do an account review and decided that I had too many inquiries and accounts (I talked with the CSR). Well, I have been very agressive in seeking the best rates available. I have had 12 inquiries over the last 2 years.
They want to increase the APR for purchases and BT's from 7.99% to 22.24%. This account has a 13K LOC with a balance of $2,800.
Did I really deserve this? I "restructured" my debt per much of the fine advice here. I moved about 10K to business accounts which I assune is not part of the Chase review unless something changed. The rest of the debt ($15k) is personal. I have 10 CC's; 2 business and 8 personal of which for 4 having a balance. The overall utilization rate on revolving and installment loans is 31%. The Chase card, in question, has a utilization rate of 22%. My FICO score is 745.
Questions:
1. I have the option of "opting out" per the new terms. My rate is locked at 7.99% but the account is closed. I just continue making the minimun payments (which I always pay much more than minimum). Should I accept this knowing that I will never be able to request a rate decrease after some of the inquiries drop off from my CR?
2. Don't opt-out. Accept the rate increase but pay off in full the balance before March 22. I can do a BT to another account.
3. Since I have a second Chase account would it be wise to "reallocate" after the balance is paid in full? This second account also has a 7.99% rate but is not currrently under review.
Are there any other options I should consider? Thanks
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Verne
Posted: Tue Feb 13, 2007 2:42 pm
Post subject:
If you can move your Chase balance elsewhere, don't opt out. Keep the card open for the available credit and better overall utilization, which in turn, results in a higher score. I'd just BT out of there to greener pastures.
Unless you're trapped, or about to be trapped, (derogs and the universal default clause) I'd not only keep the account open, I'd use it and pay in full each month. When you PIF the APR means nothing.
Eventually, with your high credit score, clean record, and low overall utilization, Chase may offer you better terms when they realize they didn't have you trapped at 22.24%, afterall.
Author: hdporter
Posted: Tue Feb 13, 2007 3:40 pm
Post subject:
You'll understand why I'm particularly interested in what prompted the account review. Excluding the business card debt, you might be outlining my debt profile in terms of balances, accounts and inquiries. Given my $50K in Chase cards (incl $17K just opened) - most at 8.99%F, your story is modestly unsettling, at best.
Was there anything else that you're aware of that might have stimulated action on their part -- a CLI request, a payment to them a day or two late, e.g.? Do you have a particular account that is maxed out? Did you report an income that is somewhat weak relative to the debt you held (say <$50K)?
Frankly, in absence of greater motivation, the ratejack by Chase is capricious. That's certainly not beyond them, but something I would expect of MBIA/FIA before than them.
Concerning the business cards, my understanding is consistent with yours -- if they're not reported on your credit report AND the accounts aren't held by Chase, then Chase would be blind to the debt. But bear in mind that accounts such as Citi-Prof aren't business accounts and are reported on your personal credit report.
-------------
I concur that you don't want to opt out of the increase. No reason to if you're prepared to BT your balance.
I definitely think it makes sense to reallocate CL while the account remains dormant subsequent to the rate incr. I'd leave at least $2K or $3K, but I'd use at least $10K to boost your other account, both for scoring purposes and to show a higher line to other creditors (who may use it as a guideline when assessing CLI's on your accounts with them).
As Verne suggests, use the account as you wish, paying in full each month. At minimum, it's best to kick off a statement once every 6 mo with a modest charge, just to ensure that credit reporting doesn't fall dormant.
I wouldn't look for Chase to improve terms down the road, although you certainly can ask. You stand a higher likelihood that they'll simply send you pre-screened offers for a new card when they're ready (best likely rate 8.9% F).
Speaking for myself, they're are plenty fish in the sea -- this would put Chase at the bottom of my CC list and ONLY a 12-mo no int offer would get me interested again in them in your shoes.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: chrys
Posted: Tue Feb 13, 2007 4:16 pm
Post subject: Ratejacking..
Thanks Verne and Harry for you comments and suggestions.
Harry, the Chase CSR read a list of reasons why the rate was increased. I tried taking notes but she was in a hurry. The notice sent to me in the mail mentions that I can obtain a written report why they did what they did. I have requested.
Regarding my Chase accounts about 9 months ago I reallocated all but $500 to one account which is now dormant (not closed) and the problem account had the bulk of the credit line of $11K. Then last month I requested a CLI of $2K. I believe it was an automated request (ie something like the LUV buttom).
Harry, one think you said caught my attention about putting a small amount on these cards that are used for BT's. The card they are ratejacking hasn't had any activity for almost one year. I pay 3.5% of the outstanding balance each month. Never late. Perhaps, from Chase's perspective the 7.99% rate was too low given that I didn't charge anthing for a year. I know they are in the business of making money but it costs them far less than 7.99% to raise money to lend out. I would rather them say that they were raising my rate because of low usuage instead of too many hard inquiries.
Author: b
Posted: Tue Feb 13, 2007 4:19 pm
Post subject:
I agree with Harry, but from what I've read about Chase and their ratejacking - it seems that they usually go after all the accounts the person has with them, including business. Some guys reported being ratejacked on the other cards 1,2 months after the first, so you should keep that in mind.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: b
Posted: Tue Feb 13, 2007 4:34 pm
Post subject: Re: Ratejacking..
chrys wrote:
Then last month I requested a CLI of $2K. I believe it was an automated request (ie something like the LUV buttom).
Most likely the CLI request was reviewed manually, and they didn't like what they saw + no usage and the low monthly payment = ratejacking. Good luck whatever you decide!
Author: hdporter
Posted: Tue Feb 13, 2007 6:04 pm
Post subject: Re: Ratejacking..
chrys wrote:
Thanks Verne and Harry for you comments and suggestions.
Harry, the Chase CSR read a list of reasons why the rate was increased. I tried taking notes but she was in a hurry. The notice sent to me in the mail mentions that I can obtain a written report why they did what they did. I have requested.
Regarding my Chase accounts about 9 months ago I reallocated all but $500 to one account which is now dormant (not closed) and the problem account had the bulk of the credit line of $11K. Then last month I requested a CLI of $2K. I believe it was an automated request (ie something like the LUV buttom).
Harry, one think you said caught my attention about putting a small amount on these cards that are used for BT's. The card they are ratejacking hasn't had any activity for almost one year. I pay 3.5% of the outstanding balance each month. Never late. Perhaps, from Chase's perspective the 7.99% rate was too low given that I didn't charge anthing for a year. I know they are in the business of making money but it costs them far less than 7.99% to raise money to lend out. I would rather them say that they were raising my rate because of low usuage instead of too many hard inquiries.
The whole situation is troublesome since it's entirely possible that they won't disclose what triggered the review -- only those factors that represent greater than average risk. I wouldn't expect your inquiries to trigger any action on their own. However, once they considered your account for a rate increase (for other reasons), the inquiries factor negatively (although likely modestly).
I expect you've hit on something when it comes to the rate. Chase has increased it's minimum fixed rate offers to 8.99%. While you're accurate in saying that 7.99% is profitable for them, there's no question that they target a stronger return and presume a certain amount of purchase fee revenue on these accounts. Your suggestion that low usage may have played a factor is likely on target. But don't look for them to cite that as a reason for the increase since it's not a risk related factor.
Everything that might be said about the rate jacking is speculative. There isn't sufficient experience from which to make definitive statements (although I thought we had someone around here with Chase insider experience who might have insight).
It would be my guess that more active usage would have weighed in your favor. Of course, it was to your disadvantage to do so if you have another account that you can pay off in full each month and avoid any finance charge. It's hard to say whether a modest charge each month would have made a difference.
I find your experience bizarre inasmuch as I'm carrying $13K on a 8.9% Chase card with a 18-mo intro 0% rate. They recently increased my line from $17.5K to $22.5 unprompted. However, one factor that likely weighed in my favor is that, despite not using the card the first 9 mo after a $8K BT, I recently added a $7K home improvement charge.
If nothing else, this whole experience points to it being desirable to at least maintain a moderate level of charging activity on a Chase account.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Tue Feb 13, 2007 2:20 pm
Post subject: Ratejacking With Clear Record Except For....
Dear Experts:
I was dreading this. Chase decide to do an account review and decided that I had too many inquiries and accounts (I talked with the CSR). Well, I have been very agressive in seeking the best rates available. I have had 12 inquiries over the last 2 years.
They want to increase the APR for purchases and BT's from 7.99% to 22.24%. This account has a 13K LOC with a balance of $2,800.
Did I really deserve this? I "restructured" my debt per much of the fine advice here. I moved about 10K to business accounts which I assune is not part of the Chase review unless something changed. The rest of the debt ($15k) is personal. I have 10 CC's; 2 business and 8 personal of which for 4 having a balance. The overall utilization rate on revolving and installment loans is 31%. The Chase card, in question, has a utilization rate of 22%. My FICO score is 745.
Questions:
1. I have the option of "opting out" per the new terms. My rate is locked at 7.99% but the account is closed. I just continue making the minimun payments (which I always pay much more than minimum). Should I accept this knowing that I will never be able to request a rate decrease after some of the inquiries drop off from my CR?
2. Don't opt-out. Accept the rate increase but pay off in full the balance before March 22. I can do a BT to another account.
3. Since I have a second Chase account would it be wise to "reallocate" after the balance is paid in full? This second account also has a 7.99% rate but is not currrently under review.
Are there any other options I should consider? Thanks
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Verne
Posted: Tue Feb 13, 2007 2:42 pm
Post subject:
If you can move your Chase balance elsewhere, don't opt out. Keep the card open for the available credit and better overall utilization, which in turn, results in a higher score. I'd just BT out of there to greener pastures.
Unless you're trapped, or about to be trapped, (derogs and the universal default clause) I'd not only keep the account open, I'd use it and pay in full each month. When you PIF the APR means nothing.
Eventually, with your high credit score, clean record, and low overall utilization, Chase may offer you better terms when they realize they didn't have you trapped at 22.24%, afterall.
Author: hdporter
Posted: Tue Feb 13, 2007 3:40 pm
Post subject:
You'll understand why I'm particularly interested in what prompted the account review. Excluding the business card debt, you might be outlining my debt profile in terms of balances, accounts and inquiries. Given my $50K in Chase cards (incl $17K just opened) - most at 8.99%F, your story is modestly unsettling, at best.
Was there anything else that you're aware of that might have stimulated action on their part -- a CLI request, a payment to them a day or two late, e.g.? Do you have a particular account that is maxed out? Did you report an income that is somewhat weak relative to the debt you held (say <$50K)?
Frankly, in absence of greater motivation, the ratejack by Chase is capricious. That's certainly not beyond them, but something I would expect of MBIA/FIA before than them.
Concerning the business cards, my understanding is consistent with yours -- if they're not reported on your credit report AND the accounts aren't held by Chase, then Chase would be blind to the debt. But bear in mind that accounts such as Citi-Prof aren't business accounts and are reported on your personal credit report.
-------------
I concur that you don't want to opt out of the increase. No reason to if you're prepared to BT your balance.
I definitely think it makes sense to reallocate CL while the account remains dormant subsequent to the rate incr. I'd leave at least $2K or $3K, but I'd use at least $10K to boost your other account, both for scoring purposes and to show a higher line to other creditors (who may use it as a guideline when assessing CLI's on your accounts with them).
As Verne suggests, use the account as you wish, paying in full each month. At minimum, it's best to kick off a statement once every 6 mo with a modest charge, just to ensure that credit reporting doesn't fall dormant.
I wouldn't look for Chase to improve terms down the road, although you certainly can ask. You stand a higher likelihood that they'll simply send you pre-screened offers for a new card when they're ready (best likely rate 8.9% F).
Speaking for myself, they're are plenty fish in the sea -- this would put Chase at the bottom of my CC list and ONLY a 12-mo no int offer would get me interested again in them in your shoes.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: chrys
Posted: Tue Feb 13, 2007 4:16 pm
Post subject: Ratejacking..
Thanks Verne and Harry for you comments and suggestions.
Harry, the Chase CSR read a list of reasons why the rate was increased. I tried taking notes but she was in a hurry. The notice sent to me in the mail mentions that I can obtain a written report why they did what they did. I have requested.
Regarding my Chase accounts about 9 months ago I reallocated all but $500 to one account which is now dormant (not closed) and the problem account had the bulk of the credit line of $11K. Then last month I requested a CLI of $2K. I believe it was an automated request (ie something like the LUV buttom).
Harry, one think you said caught my attention about putting a small amount on these cards that are used for BT's. The card they are ratejacking hasn't had any activity for almost one year. I pay 3.5% of the outstanding balance each month. Never late. Perhaps, from Chase's perspective the 7.99% rate was too low given that I didn't charge anthing for a year. I know they are in the business of making money but it costs them far less than 7.99% to raise money to lend out. I would rather them say that they were raising my rate because of low usuage instead of too many hard inquiries.
Author: b
Posted: Tue Feb 13, 2007 4:19 pm
Post subject:
I agree with Harry, but from what I've read about Chase and their ratejacking - it seems that they usually go after all the accounts the person has with them, including business. Some guys reported being ratejacked on the other cards 1,2 months after the first, so you should keep that in mind.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: b
Posted: Tue Feb 13, 2007 4:34 pm
Post subject: Re: Ratejacking..
chrys wrote:
Then last month I requested a CLI of $2K. I believe it was an automated request (ie something like the LUV buttom).
Most likely the CLI request was reviewed manually, and they didn't like what they saw + no usage and the low monthly payment = ratejacking. Good luck whatever you decide!
Author: hdporter
Posted: Tue Feb 13, 2007 6:04 pm
Post subject: Re: Ratejacking..
chrys wrote:
Thanks Verne and Harry for you comments and suggestions.
Harry, the Chase CSR read a list of reasons why the rate was increased. I tried taking notes but she was in a hurry. The notice sent to me in the mail mentions that I can obtain a written report why they did what they did. I have requested.
Regarding my Chase accounts about 9 months ago I reallocated all but $500 to one account which is now dormant (not closed) and the problem account had the bulk of the credit line of $11K. Then last month I requested a CLI of $2K. I believe it was an automated request (ie something like the LUV buttom).
Harry, one think you said caught my attention about putting a small amount on these cards that are used for BT's. The card they are ratejacking hasn't had any activity for almost one year. I pay 3.5% of the outstanding balance each month. Never late. Perhaps, from Chase's perspective the 7.99% rate was too low given that I didn't charge anthing for a year. I know they are in the business of making money but it costs them far less than 7.99% to raise money to lend out. I would rather them say that they were raising my rate because of low usuage instead of too many hard inquiries.
The whole situation is troublesome since it's entirely possible that they won't disclose what triggered the review -- only those factors that represent greater than average risk. I wouldn't expect your inquiries to trigger any action on their own. However, once they considered your account for a rate increase (for other reasons), the inquiries factor negatively (although likely modestly).
I expect you've hit on something when it comes to the rate. Chase has increased it's minimum fixed rate offers to 8.99%. While you're accurate in saying that 7.99% is profitable for them, there's no question that they target a stronger return and presume a certain amount of purchase fee revenue on these accounts. Your suggestion that low usage may have played a factor is likely on target. But don't look for them to cite that as a reason for the increase since it's not a risk related factor.
Everything that might be said about the rate jacking is speculative. There isn't sufficient experience from which to make definitive statements (although I thought we had someone around here with Chase insider experience who might have insight).
It would be my guess that more active usage would have weighed in your favor. Of course, it was to your disadvantage to do so if you have another account that you can pay off in full each month and avoid any finance charge. It's hard to say whether a modest charge each month would have made a difference.
I find your experience bizarre inasmuch as I'm carrying $13K on a 8.9% Chase card with a 18-mo intro 0% rate. They recently increased my line from $17.5K to $22.5 unprompted. However, one factor that likely weighed in my favor is that, despite not using the card the first 9 mo after a $8K BT, I recently added a $7K home improvement charge.
If nothing else, this whole experience points to it being desirable to at least maintain a moderate level of charging activity on a Chase account.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Labels: Balance Transfer After Credit Card Rate Hike, Credit Card Inquiries Solution
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