Chase reportedly ends credit card line transfers. Edit: "product trades" seem dead too. Please add updates

Credit-card companies are taking a double beating from rising defaults and tighter federal regulation but it is consumers who will likely feel the pain in the coming months.

"The combo of the two means there is no more business as usual for credit-card lenders," said Laura Nishikawa, a researcher for shareholder advisers RiskMetrics Group. "In general, consumers are going to borrow less and banks are going to lend less."

Fed holds key rate steadyDow Jones Newswires' Paul Vigna and Eduardo Kaplan discuss the Fed's decision to keep a key interest rate unchanged, and to go ahead with plans to buy mortgage-backed securities and debt.
Nishikawa authored a report this month saying that higher-than-expected credit risks and new federal restrictions on issuers will "fundamentally alter the credit-card industry in ways that will extend far beyond" the current business cycle.

"Companies are never going to experience the same types of margins that they used to," Nishikawa said. "They are going to have to find a different way to do business."

Losses that issuers take as charge-offs are closely linked to the unemployment rate, which jumped to 9.4% in May from 8.9% in April, experts said. A recent report from TowerGroup forecast that credit-card charge-offs could rise to $71 billion this year from 2008, a 30% increase.

"In general the losses the banks experienced are just going to get worse," said Ben Woolsey, director of marketing and consumer research for CreditCards.com . "They are in triage mode right now."

As a result, consumers with shakier credit histories may see dwindling or no access, while those with stronger profiles may face higher costs and a loss of perks, experts said.

Blood in the water
The new regulation, effective in February, will curb firms' ability to collect some fees and to hike rates on existing customers, among other actions.

"All that will chop away a lot of revenue for the industry," Woolsey said. "They are not going to sit idly by and watch that revenue come out of income. They will work on a way to replace it."

If issuers can't make as much money on people carrying balances from month to month, they may introduce annual fees and scale back rewards programs, among other moves, experts said.

"Since banks can't change rates on the fly going forward, they are going to have to figure out ways to make money off of people who used the cards for free in the past," Woolsey said. "I think we are going to see a tremendous reduction is promotional rates, teaser rates."

Consumers may also face less favorable terms as struggling banks lead to industry consolidation, said Cristian deRitis, a director at Moody's Economy.com in consumer credit analysis.

"It's just a tremendous time, a shake up. There might be more limited competition among credit-card issuers than there has been in the past," deRitis said.

The prepaid-card industry, which has experienced growth because of the crisis, will continue to gain as bigger players enter and start offering products, said Nishikawa of RiskMetrics. She added that banks may use additional forms of data to assess a customer's riskiness going forward
There are alternative credit-reporting companies, looking at more than just your credit history," Nishikawa said.

Economic impact
There's speculation that the card industry is going to pull in credit lines very significantly in the next year, Woolsey said.

"The reduction in credit lines is in reaction to perceived risks," Woolsey said. "So they are giving people less rope to hang themselves with, closing down some accounts."

Hard times for credit-card firms and customers could slow the economy's rebound, said Joshua Frank, senior researcher with the Center for Responsible Lending, a Durham, N.C.-based research and policy organization

"What you're going to see is the economy being held back by credit-card losses continuing to be a drag," Frank said.

Firms cutting access to credit could ding consumption, even though many consumers use only a fraction of their available credit line.

"It might have a psychological impact, with people spending less," Woolsey said.

The credit-card crunch could cause serious short-term spending problems for some, deRitis said.

"People that have been used to getting by with credit cards will find their lines reduced or cut off," deRitis said. "In this weak economy, they are having to address all the debt that's been piled on through the year. People won't be able to take on additional debt, which is not a bad thing in the long run."

Families struggling with house payments may still try to pay their credit-card bill, especially if their house has lost significant value, said Nick Bourke, project manager with the Pew Safe Credit Cards Project.

"There are some people who have been choosing to pay credit cards even if it means their mortgage would go delinquent," Bourke said. "You might pay your credit-card bill first because you are reliant on that to buy gas, to go to work, to pay for food. For people on the edge, that line of credit could be important. There may be a feeling that they have more time to work with a mortgage lender.
Ruth Mantell is a MarketWatch reporter based in Washington.

So let's all pool our collective knowledge and try to predict what the NEXT bubble will be and how to profit from it.

The earlier post about June 11th being the effective date seems just about right, from what I have read, and heard from multiple sources. As for those that couldn't consolidate earlier, that is on a case-by-case basis. Sometimes, even if generally you can consolidate limits, Chase will prevent a specific individual from consolidating their lines. What the criteria for that was, I have no idea. Also, as for product trades, I am not sure about that being dead. Just a few days ago I did a product trade from a plat -> freedom, with no problem whatsoever. It took all of about 30 seconds. Anyone else? More data points seem to be needed.

SuperG03

Although not my original intention, I was able to reallocate from chase personal cc to biz today
Before: 10k personal, 20k biz
After: 1k personal, 29k biz
6/15: In branch, through biz banker applied for CLI on 20k biz line, 2 years old. Asked for 30k
6/30: In branch, asked biz banker why no response yet. He called in, they said couldn't pull credit because credit reports frozen, need pin (I always keep TU and EX frozen). I said I didn't have pin on me. He gave me a phone number to call (800-527-7415) and reference number. Went home called number. Rep verified some personal info, and said unable to pull credit reports, asked for EX pin. I asked her to try EQ, said they had already tried twice and unable. I asked to try one more time, of course it worked, she seemed surprised. Said already at max exposure (55k total limits between several business cards and 1 personal), but she offered to close my 10k personal that I don't use (was an old wamu card) and reallocate to biz to make 30k. I asked if I could keep it open with 1k and reallocate the 9k. She said ok. New limit available online in 5 minutes. Now I need to use my 0.9% fixed apr BT check I received in mail recently to cash out the 29k biz line

I did a conversion from Freedom to Amazon late last week with no problems. The whole call took about 3 minutes.

I also just converted my Freedom Card (to which they added a yearly fee recently) to a no-fee card. Took no time at all. Then I had my wife call to convert hers, and they told her she had no annual fee for it. So we did not convert that.

I just got a change in terms notice on my Amazon card that said balance transfer checks written to self would be treated as a cash advance.

sethdallob said: So write them to your wife or sibling.

The exact wording is:

Any balance transfer checks made payable to cash, to you, or to certain persons or business as we will disclose to you, may, in or sole discretion, be assessed cash advance interest rates and fees.

Besides, if I wrote a check to my sibling, I doubt I would ever see any of that money again.

user12345 said: RedCobra said: So let's all pool our collective knowledge and try to predict what the NEXT bubble will be and how to profit from it.

im pretty sure it will be an energy related bubble. One one hand you have increasing emissions and imminent signs of the effects of global warming. On the other hand you have increased energy consumption mostly due to high growth in developing countries, and limited oil production and reserves. So there should be some sort of bubble with oil prices AS WELL AS alternative fuels and energy sources, especially so-called "green" technology. So there are lots of bubble inducing ingredients, but it's still hard to know which specific ventures will profit.

Very interesting, i keep hearing about a treasury bubble and short it.

I saw this post this afternoon, and I do have a WAMU credit card A(now also Chase credit card without any feature/CB) with 4,000 CL, besides a chase freedom card B with around 3,000 CL. So I just called chase for a try. I mentioned to the CSR that I may want to close this card A, and am wondering if I could move part of the CL to my freedom card B before I close it. The CSR told me this was stopped by Chase Company, considering the credit market... And again, I complained "Well, it seems I have to close this credit card A any way, rite?". The CSR then gave me an offer to put some rewards program on that card A. I requested the same rewards program as Freedom. No go. He told me that rewards program is no longer offered. Anyway, he offered to transfer that card A to "Chase perfectcard",which has 3% CB on gas and 1% on all others...Actually, it does no good to me cuz I already have an AMEX Business card which gives me 5% CB on gas.

Will try calling again at daytime for an American CSR instead of an Indian CSR like the one I talked to 10 min ago.

Any one got better luck?

PS: Although Chase PerfectCard doesn't mean anything to me, it may be useful to some of FWers here who don't have 3% CB on gas, especially if those of you have the same old WAMU card as me.

MikeR397 said: Is there anyone who can very recently report success in getting chase to consolidate/move your credit lines between cards?

Yes !!!

Well sort of...... because I didn't really asked for it.....

I have a Freedom Plus card with a $4K limit and a Sony card with a $14K limit but I only use the Freedom card. Last week I got a letter from Chase saying that they noticed I use the Freedom card a lot but don't use the Sony card, so they are increasing the credit limit on the Freedom card by $1K (to $5K) and decreasing the credit limit on the Sony card by $1K.

So I guess you can call that a credit line transfer even though I didn't ask for it and I don't really need it since I always pay in full and the old limit was more than enough.

Thanks for the feedback guys. I think people should continue to ask for supervisors and complain, over and over and over. Write letters, tell the higher ups how impractical this policy is. Use legitimate reasons, not that you want to do an AOR, but that you wanted to get a new Chase card b/c xxx and use that as your everyday spender, but you can't b/c they won't give you the credit line you need and therefore you are going to switch over to Bank of America and use thier credit products until Chase switches this policy.

Lets use the FWF effect to our benefit!

thinwallet4d said: user12345 said: lampy2k4 said: Chase refused to convert United Mileage Plus card into their no-annual-fee version, said that they no longer do conversions and my only option is to close the account, which they promptly did. This worked for other family members just a few months ago.

wow, now you can't even convert to a different card ????

Well, about a few days ago I converted a yearly-fee chase freedom card to a no-fee chase freedom card. Just a data pointThere's a thread here where several people have mentioned converting Freedom cards recently.

So has anyone had experience reallocating limit around but never going above the previous high limit card? Or in other words... Have 1st card at 20K - apply for a 2nd card and get approved at 5K - reallocate the 15K from 1st card to 2nd card - and never "increase" your limit on the highest card? It seems like that's really what they are trying to stop, and this would be the main test. AOR's would be more beneficial this way (than only using the new credit you receive on the promotional cards), but not as beneficial as free movement between cards which I hope returns again soon.

Data point:

Chase priority club business visa (1st free year expiring): $4000 Credit limit

I have other chase business credit cards (both lower than and well above the 4000 limit). Rep said there's no way to reallocate/consolidate whatsoever. So I just close it since I have all the cards i need currently. Per rep, this new policy applies to personal lines too.

Well, Congress... I never know whether they do us more good than bad or vice versa...

Some CC companies threatened to charge annual fees for every CC....if that would happen....shoot

notlarry said: fooshkee said: this policy is likely to stay for a while if not permanently in response to risk and the upcoming government policy changes (UDAP). it's a whole new world for credit guys... and it sucks.My data points: I have a Chase United Mileage Plus Visa & I called twice to cancel it & reallocate to another Chase card. Call #

1. Using the phone system, I selected the option to cancel my card & the loyalty dept answered. She said there have been no reallocations for ~ 1 month.
   
2. Called back but didn't pick the option to cancel my card. Spoke with a guy who confirmed no reallocations. He claimed that they are updating their systems due to new gov't regulations (thanks Congress!!) and that reallocations are temporarily banned. He expected them to be reinstated sometime in the future.
   

7890 said: Does anyone know if this is also the end of credit line transfers on chase business cards?Apparantly, yes.

Huh, I somehow totally missed this thread initially, just searched it out as the subject became relevant to my interests.

I recently received a letter from Chase regarding my "Flexible Rewards" Visa, formerly my WaMu ESPN Visa. They noticed I hadn't been using much of my credit line, so they were axing it to $5700 from $13,200. Separately, I've been considering paring down my CC portfolio in advance of creating a master info doc (in the event I'm incapacitated/dead), so thought I'd call in and get this (and probably my $1000 Sony card) consolidated into my $6k Cash Rewards Plus. And got shot down. Nothing about any of my specifics, just the high-level directive they can no longer consolidate. I told them it seemed stupid for us both to continue to administer a card I don't plan on using, but if they insisted.... obviously I have little incentive to close it and flat-out lose the CL. Guess I'll hit up Citi in an effort to get down to < 25 cards.

As of today, Chase still isn't allowing CL xfers. My Disney 0% only came with 6k on it, meanwhile I have $50k+ languishing on other accounts. ::sigh::

With regards to product transfers, that happened to me when I got a 4bucks card some 4-5 months back. They closed my VW card and moved the CL limit over without even asking me.

iluvnola28 said: I have a Chase card and a WaMU turned Chase card both have balances on them. Do you thing Chase will consolidate the limits or do both need to be paid off? I would like to have just one card. My original chase card is a Freedom Card
I had 2 Chase cards before the WaMu merger, so my WaMu/Providian card came over too. I decided that I don't really want 3 cards with Chase, and the WaMu card was the newest, so that was the one I wanted to get rid of.

I called tonight asking if they will do a line transfer. As expected, they're still saying no. I closed it anyway. So, no, I'm sure they won't consolidate them for you.