Shop until you’re dropped: Chase Financial Review freezes account

Update: See Chase Financial Review: Results are in for the conclusion to this story.

Recently, my wife opened a couple of new Chase credit cards; among them was a Chase Marriott Rewards card. A couple of days ago, she went to make a purchase online and received an error message that the purchase could not be completed — her card was declined. With the holidays coming, she had done some recent shopping and figured this was likely due to a security alert on her account….

No email, no call

She expected she would receive an email/call from Chase asking her to confirm the activity and the security hold would be lifted, so she didn’t think much of it and used a different card (from a different issuer) to complete her purchase.

Later, when she realized that she had never received a call, email, or text message, she decided to call the number on the back of her card before trying to use the card again. The rep she spoke with asked her to verify basic identity info. After completing verification, the rep explained that the account is under review and customer service could not even access the account during that process. The Chase rep provided my wife with a phone number to call for more information.

Chase Financial Review

My wife then hung up with customer service and called this other 800 number. While she was on the phone, I Googled the number she was given and found this guest post from Doctor of Credit outlining something about which I had completely forgotten: Chase Financial Review.

It’s funny that I forgot about that post…..because I included it in our Week in Review Around the Web the week it was published, titling the review post “Financial Review: It isn’t just an Amex thing“. In fact, in my recap of the post, I said this much: “Read about both the process and potential triggers. It’s a good read with cautions for those opening new Chase accounts.” What’s the saying?…..do as I say, not as I……

My wife proceeded to verify herself again and then received exactly as much information as you’d expect if you’d read the Doctor of Credit post: absolutely none. The rep told her that the account was under review and that process had just begun, so they wouldn’t have any additional information for her until next week. She pressed for any more detail about why or what it all means but got nowhere fast.

While it is under review, the account can not be used. Unlike with an Amex Financial Review, a Chase account freeze is individual — the rest of her accounts should not be frozen (though truth be told she has not made test purchases on all of them for fear of creating any further ill will, and I don’t blame her for that). Based on what I’ve read, there’s not much to do but wait and see what happens. My wife said she would try calling them back early next week and the call ended.

What caused it?

Of course it’s hard to say for sure since Chase is completely tight-lipped about it, but let me quote the Doctor of Credit post on Chase Financial Review for a moment:

What Causes It?

The common indicators seem to be:

• Brand new Chase accounts (regardless of how long you’ve been with Chase)

• Lots of recent hard pulls

• Suspicious usage of the new account such as high amount transactions, gift card purchases

Now let’s review that and mark what she may have done “wrong” (and I use that word loosely as I don’t think she’s done anything actually wrong in terms of her use of her credit card account):

1. Brand new Chase accounts: Yup
2. Lots of recent hard pulls: Sort of. (The only new accounts Chase would see would be the 3 Chase accounts she has recently opened. She is now at exactly 5/24. I don’t think that’s lots, but I’ve read in other places — like here and here — that several new Chase accounts in a short time frame can trigger this. More on this below)
3. Suspicious usage of the new account such as high amount transactions, gift card purchases: This might be it.

If we say that #2 isn’t lots, we’re down to two out of three. While the old adage may be that two out of three ain’t bad…….it probably isn’t good, either. I imagine that the third point is what triggered the review. There have been a lot of gift card sales lately with various holiday deals (many of which we’ve written about here in Quick Deals). Since my wife is working on meeting the minimum spending requirement on her Marriott card, she has taken advantage of a number of those.

Still, she was only about halfway to meeting the $3,000 minimum spend and she’s had the card for a couple of weeks. I’ve met the minimum spend on a Chase card in a day or two before, though usually buying merchandise (whereas she did mostly buy gift cards). I think what likely got her tripped up was that her card got declined after a gift card purchase last week. She called in shortly after and explained that there had been a sale and she was just trying to take advantage of it. They reactivated her account. Then, her next purchase was for an online gift card a few days ago — and that’s when her card appears to have gotten shut down.

Were three approvals too many?

Of course, maybe #2 does constitute “lots”. it probably doesn’t help that she had just opened the three Chase cards. In fact, she had applied for all three on the same day. She was instantly approved for both a personal and a business card before the Marriott application. Conventional wisdom is that two Chase personal or two Chase business cards in the same day will result in one hard pull, whereas a personal card and a business card would be two hard pulls. In other words, she was already going to receive two pulls, and a third application the same day probably wouldn’t result in a third pull.

She didn’t expect a third instant approval: the commonly accepted belief is that Chase won’t approve more than 2 cards in 30 days, but there are some data points of success with a third card. She expected that she would have to move some credit around to get approved for three, but didn’t see much harm in applying for the third after the two instant approvals. The third application (for the Marriott card) went pending and was denied. After receiving a letter, she called recon and it was less than ten minutes start to finish for a rep to answer, look over her file, offer to take credit from another card, and get the Marriott card opened. Overall, the process of opening the three cards wasn’t hard…..but in hindsight, spending on all three cards in the first month (she spent much less on the other two, but did use them some) probably wasn’t the wisest move.

What to expect

I’m not completely sure what to expect next. According to Doctor of Credit and the other reports I’ve read, there are basically three options:

1. All of her accounts could be shut down
2. She could completely clear the Chase Financial Review with no adverse action
3. Chase could give her a mixed result, cutting some of her credit lines

Honestly, I’m a little surprised by all this. Some readers will say I shouldn’t be — after all, she did open three Chase accounts at the same time and proceed to buy a bunch of gift cards. On the other hand, my wife has excellent credit (~800), has never missed a payment, and earns a better-than-average (though far from huge) income. It’s worth noting that her gift card purchases were only for merchant gift cards – no Visa/Mastercards – and we’re talking about what feels like a relatively small amount (around $1500 – doesn’t seem completely outlandish at Christmastime). That amount does reflect a decent chunk of her credit limit on that particular card, though she opened the Marriott card by shifting $5,000 in credit from another card that had a credit line that is still several times larger. In other words, $1500 isn’t a significant percentage of her overall available credit with Chase and the spending she did on all three cards combined is less than half of her monthly income (so no red flag on spending beyond her means).

Based on those factors, I would be very surprised if Chase takes option #1. At the same time, it isn’t an impossible scenario, and it would certainly be a major bummer on a lot of levels (losing out on great Chase rewards, an uncertain future in terms of getting a Chase product again someday, etc). On a small level, we had hoped to earn the Southwest Companion Pass in her name for 2019 in order to be sure that we had secured a pass for when Southwest begins flying to Hawaii (and to be able to take advantage of a free lap infant while we can!).

On the other hand, some data points indicate that even a complete shutdown isn’t always permanent, with some people getting back in within a few months. But with her 5/24 count now blown, that would not be an ideal situation.

More to come

At the end of the day, there’s nothing to do but wait. If there’s one thing my wife absolutely hates, it’s waiting. Thirty-five weeks into pregnancy, I don’t think it’s the aches or pains or stuffy nose or being woken in the middle of the night by a swift kick that bothers her….it’s knowing she’s got to wait 5 more weeks. So maybe I should thank Chase — at least she’ll be focusing on a closer carrot for a few days. I’ll be sure to post again when we get the results.

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