Chase Now Lets You Reallocate Credit During New Card Application
When applying for a new credit card, you could sometimes come into issues if you reach a certain maximum credit limit with that institution. The solution is often to reallocate credit between your existing credit cards, in order to have enough left for your new card. But this whole process normally requires you to call in and talk to a representative.
Now Chase has made the whole thing much easier. When applying for a new Chase credit card, you will have the option to move credit around in order to have enough for the new Chase credit card you’re applying for.
A redditor says that this option showed up at the end of the application. He completed the application and received an email saying that he’ll be notified by mail regarding his application. Then immediately the application redirected to a page that let him reallocate credit between his existing credit cards, in order to open the new card.
Doctor of Credit reports that customers that meet a certain criteria will be presented with this option. It’s not clear what criteria this would be, but maybe it’s just existing cardholders that already have a very high credit line with Chase.
Conclusion
This seems like a great option that makes it easier for the customer to get approved and clearly see the options for reallocating credit. It’s also better for Chase as they don’t have to deal with all the additional calls to their reconsideration department.
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So, why not make an exception to the 5/24 rule?
Different subject. This change by Chase is clearly aimed at existing cardholders who are at “Max-Exposure” with Chase. Chase will happily open any new account for such existing prime borrowers, (they just won’t extend any additional credit without verification of income/assets beyond the “Stated Income” provided by the borrower and accepted by Chase).
IMHO, “5/24” is simply an internal risk model that Chase copied from FICO, (“Fair Issacs Company”). If you’re interested, google “FICO Bust-Out fraud risk model/score”. There’s a white paper about the model you can read. On the 4th or 5th page it states that the average “Bust-Out-Fraud-Risk” opened 2.4 new revolving accounts during the preceding 12 months. This tells me Chase likes and agrees with the risk model, (they just don’t want to buy the FICO risk score for every new Chase application, so they just created a policy to avoid this risk).
That happened to me last week, with my new Aeroplan card. A page came up listing my three highest limit cards and they told me transfer $5 to 9.6K from one or more cards. The new limit seemed low but I guess I can fix it later. Happy it was so easy! I did get an email saying they’d let me know if I was approved by snail mail, followed immediately by one saying my card would arrive in 3-5 business days.
Definitely an added way to do so which I’ll take advantage of. Saves me the regular call to Chase whenever opening new cards!