Chase Bank is making it more difficult for those looking to get a new small business credit card. According to numerous reports, the bank is now requiring users to register and log in to the Chase website before submitting business credit card applications.
Chase has taken steps to curb the practice of credit card churning, which is when individuals open and close multiple credit card accounts to maximize signup bonuses. Whether this is another instance of the bank’s efforts is not known, but some of the common reasons for business application rejections points to this being the cause.
Reasons for Rejections Indicate an Attack on Churning
According to some users on popular site, Doctor of Credit, Chase is citing insufficient funds and the lack of a business structure as reasons for rejecting business credit card applications. This would indicate that the bank views these applications as predatory, rather than ordinary small business owners.
The news relates to a broader attempt by the industry to cut down on the negative impact of churners. We have covered the efforts by both Chase and American Express to claw back rewards in the past. This effort is likely another step in that process.
The Coronavirus Impact on Credit Cards
Of course, the news of Chase tightening the rules for applications follows closely on the heels of the bank reducing credit limits on some customer’s consumer credit card accounts. JPMorgan Chase has been taking proactive steps to insulate their finances during the coronavirus (COVID-19) pandemic. Reducing credit limits for some customers is one way the bank is protecting itself from potential defaults.
About Chase Bank
JPMorgan Chase & Co. is one of the largest financial institutions in the world. The bank is also the second-largest credit card issuer by total accounts in the United States. To date, Chase has approximately 83 million credit cards in circulation, second only to Citibank. Chase offers some of the most popular credit cards on the market today, including the Chase Sapphire Reserve and the Chase Freedom Unlimited. The bank also issues several co-branded cards with leading brands like Amazon, Marriott, Southwest, and more.
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