Consumer complaint received 2020-01-20
Product: Credit card or prepaid card — General-purpose credit card or charge card
Issue: Advertising and marketing, including promotional offers — Confusing or misleading advertising about the credit card
Company: JPMORGAN CHASE & CO. (NY)

Earlier this month, on or about XX/XX/2020, I applied for a Chase Freedom Visa card. I have been a Chase Sapphire Preferred cardholder for at least 4 years, and thought I would like to add a cash back card to my wallet. If memory serves, I applied for the card after signing in, as a customer, to the Chase website, which pushes out an array of cards for the customer to consider. To my surprise, my application was instantly declined ( via pop-up ), but no decline reason was included. 

The next day, I was on the XXXX website purchasing an airline ticket. There was a solicitation to apply for a United Explorer Visa card, advertising a sign-on bonus of up toXX/XX/XXXX miles, and a few other benefits related to flying on XXXX XXXX. Since I was buying tickets, I found these benefits appealing and so applied for the card. The application portal stated that I would receive an instant decision. When I submitted the application, however, a pop-up appeared stating there would be some delay with the decision. 

Also on XX/XX/XXXX, I received an email from Chase stating that they did not approve my request and instructing me to sign onto my online account, where also I found the adverse action letter for the Chase Freedom Visa application. Until then, I was unaware that the United Airlines Mileage card was issued by Chase. If I had known, I might have held off applying until I had a chance to read the adverse action notice for the instant decline I previously received. 

On XX/XX/XXXX, I received an email from Chase declining my application for the United Visa card, and with instructions for accessing the adverse action notice. 

Both adverse action letters stated the decline reason was, " Too many credit cards opened in the last two years associated with you. '' Soon after, I received an email from XXXX stating that my credit score had declined ( XXXX is temporarily providing free credit monitoring since I was affected by the data breach ). 

I was truly puzzled by these declines, since I have excellent credit and have been a Chase customer for at least 20 years. The decline reasons became clear after I spoke with a couple Chase representatives to attempt to resolve my complaint. One representative stated that there is an industry-wide rule, not specific to Chase, that a customer will be automatically declined if he/she has opened more than 5 new cards within the last 24 months. She then put me on hold, during which time I went on XXXX and found, on multiple websites, that this practice ( referred to as the 5-24 rule ) IS in fact a Chase-only policy. Therefore, what the representative said is not correct, and Chase should not be misleading customers by stating the 5-24 rule is an industry-wide policy. 

The only benefit I can see from this otherwise unpleasant set of experiences is that I now understand that these declines were the result of Chase policy aimed at onboarding only those new account holders who are likely to be profitable. Undoubtedly, Chase 's analytics have found that, on average, people who open more than 5 new credit cards within 24 months are not likely to generate sufficient spend to offset the cost of the sign-on bonus, and so Chase automatically declines all such applicants. 

While a company may have the right to institute any non-discriminatory rules to maximize their revenue and protect their profit, I think Chase 's sales practices need to be changed. Chase Credit Card application solicitations advertising new account bonuses should clearly disclose to the prospective applicant that he/she will be declined automatically if he/she has opened 5 new credit card accounts within the last 24 years. These disclosures should be in bold print, large font, so other customers do not have the same experience I have -- taking time out of my day to apply for a Chase card, feeling the sting of decline, and the subsequent hit to my credit score. 

As do many people using US banking  and credit products, I operate under the assumption that likelihood of repaying ( e.g., credit score ) is the primary factor that will be considered when I apply for a credit product. This is certainly the advice from credit counselors and financial literacy experts. 

When this is not the case, as with the Chase 5-24 rule, I think the burden is on the card company advertising their cards, to state auto-decline rules such as these, right up front and in plain view to the prospective applicant. Otherwise, their solicitations are unfairly misleading applicants who are affected by but not otherwise aware of these automatic rules to applying for a product when it is already pre-ordained that they will be automatically declined, and then suffer a hit to their credit score.