Chase Cracks Down on Credit Card Self-Referrals

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Last updated on March 6th, 2020

Chase has recently begun notifying cardholders of stricter measures to prevent misuse via credit card self-referrals. Faced with cardholders increasingly looking to cash in on rewards through deceitful means, the bank has imposed new rules. Under these new directives, those applying for cards using their own referral URL will not be eligible for referral bonuses.

How Credit Card Referrals Work

Credit card referral bonuses are a great way to rack up bonus rewards points. The process itself is straightforward. First, an existing cardholder invites a friend to apply. That person then applies and receives their own card. In return, the issuer gifts the referrer additional bonuses.

Credit card self-referrals bypass the need for a friend or family member. Instead, a cardholder sends themselves a referral code and applies for a different Chase credit card that offers a big introductory bonus, like the Sapphire Preferred. In this way, they get the initial signup bonus plus the referral bonus. This process can lead to a vast trove of points in practically no time.

Industry Clamp Downs on Reward Program Misuse

Chase’s recent actions concerning self-referrals are part of a growing trend. The issuer sent notices late last year warning cardholders against misusing their rewards program. Just some of the issues Chase highlighted were attempts to bypass their five-referral rule and using manufactured spending to reach spending bonuses.

Common attempts to bypass the five-referral rule include self-referrals, plus posting referral links on social media channels. Additionally, some of those manufacturing their spending to meet bonus requirements were purchasing gift cards to reach welcome bonuses.

Chase’s self-referral actions also mirror those of American Express last year. Amex also faced issues with self-referrals and initiated new language to reclaim bonuses from those they felt misused the system retroactively.

Clampdowns on misuse of rewards and unscrupulous actions are on the rise. This spike in issuer actions underscores the danger of such tactics with regards to credit cards and rewards programs. While the tactics continue to enjoy popularity on social channels, like Reddit, it’s always advisable to adhere to the rules and regulations of card issuers like Chase, American Express, and others.

Related Article: What is Credit Card Churning?

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About: Cory Santos
Cory Santos

Cory is the senior credit card editor at BestCards, specializing in everything credit card-related. He’s worked extensively with credit cards and other personal finance topics, including nearly five years at BestCards. Cory’s extensive knowledge is an essential part of the BestCards experience, helping readers to live their best financial lives with up-to-date insights and comprehensive coverage of all facets of the credit card space, including market trends, rewards guides, credit advice, and comprehensive credit card reviews.

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