Recently, we’re seeing a surge in churning-induced Chase shutdowns, as reported by various outlets. Miles Per Day dubs it Chase Shutdown Week. Both Vinh and TravelinPoints have shared their thoughts on churning best practices going forward. In this post, I’ll share my path forward.
First, it’s good to keep in mind why Chase is conducting the shutdowns. It seems to me the goal is largely to curtail bust-out fraud, which I wrote about here. The problem is the predictors of bust-out fraud look a lot like the behaviors of churners. Although churners and MS’ers are “only” a secondary pest to Chase, I don’t think they mind squashing a few by mistake. It’s like killing two birds with one stone.
Both Vinh and TravelinPoints advocate greatly limiting the number of new Chase applications and/or other applications, to be on the safe side. That makes sense for heavy MS’ers, whose priority should be to protect their existing MS cards. In this case, a couple of sign up boni aren’t worth risking your “golden goose” (or geese). On the other hand, if your primary source of miles and points is signup bonus, your priorities might be different. In my case, I have zero UR to worry about, and I only value Chase insofar as they keep offering me signup bonus. If I have to severely limit that source of miles and points from them OR from other banks (let’s say reduce churning by half), then they will have lost their raison d’etre. At that point, it doesn’t matter if I shut them down or they shut me down. They become irrelevant either way. Of course, bank policies do evolve with the economy, and Chase could very well adopt a more friendly policy down the road. But I’d rather focus on the present. I’ll continue to get new Chase cards and other cards at my current, not-very-aggressive rate. In 2017, I got 11 new cards (2 from Chase) with 4 declined apps.
It’s worth mentioning that one of my family members had all their cards involuntarily cancelled by Amex (for reasons I won’t go into, so please don’t ask). After 6 months, it doesn’t seem like it has affected his ability to get new cards from other banks by much. So, I’m not too worried about that part, if I do get shutdown by Chase.
Having said that, here is my churning strategy going forward. Here are the things I’m already doing, which will continue:
- Low utilization across the board. High utilization seems to be a major contributor to shutdowns.
- Reduce credit lines across the board. I reduce it after the signup bonus posts to my reward account.
- Minimize the # of cards you have, especially at Chase. I cancel 99% of my cards after the 1st year. I generally don’t bother with downgrading or retention. My priority is easy future approvals. Having fewer cards helps.
Note, the above are good habits, but they’re no guarantee for success. For instance, TravelinPoints was shutdown despite reducing credit lines. He was a very aggressive churner though, with nearly 50/24 as of Oct 2017.
Here are the things I will change:
- No more multiple Chase applications in one day. I got 2 Chase cards in one day recently and have done so in the past. That seems aggressive and won’t happen any more.
- Less AOR, more spreading out of applications. I explained why in this post.
Another important consideration is to distance your family members from each other in the bank’s view, so that if one gets the ax, the others won’t by association. For instance, if you live with another family member who is also in the game, consider using an external (non-PO box) address for one of you. I haven’t looked into it myself (because I’m not in the aforementioned situation), but I have heard others doing it.
In a Nutshell
In short, you should adopt the strategy that best supports your earning goal. Heavy MS’ers of Chase cards should truly minimize churning. As a “traditional” churner (whose volume pales to TravelinPoints), I’ve decided it’s largely business as usual for me, save the two changes I outlined.
What’s your situation, and what’s your strategy?