The first time I spent an extended stay in New York, I was amazed by a lot of things. In the mind of a recent college graduate with a bachelors’ degree in economics, New York was a finance kingdom, a prosperous land for financial institutions. This impression was enhanced by the presence of millions of banks and offices in tiny, packed Manhattan. It didn’t take long for me to realize though, that there is one bank that seems to have offices and ATM’s on every street corner? When I hang out with friends in New York and come out of a bar non-sober and see everything as patches of color like an impressionist painting, the most prominent color I observe is blue. It is the same kind of blue on emergency posts that I was used to at Colgate. It is the blue of Chase.
Chase is a gigantic bank. As a credit card issuer, they are among top 3 by many different bases.
And their credit card portfolio is about the most generous and most desirable. With that advantage, they can afford to be picky. My first two credit rejections since I started building credit came from Chase. Ever since I stepped into the non-secured credit card land, Chase has been a dream target. And I saw to it that the target be reached within a reasonable timeframe.
One week ago, the first Saturday of February 2013, I was approved for 2 Chase cards within 2 minutes of each other: the United Explorer, and the Priority Club Select, one of which is a Visa Signature which means the credit limit is at least 5k. I need to spend $1,000 on each card in the next 3 months to receive 50k United miles which are enough for 2 round-trip tickets and 80k Priority Club points which are enough for multiple hotel stays. Flying back and forth between the coasts will not be as daunting as before, budget-wise.
Being approved for 2 of the best cards Chase offers is despite the fact that 5 months ago they denied me even their most basic product, the Freedom. How did I get to this point?
Back in September 2012, Chase gave me a bit of a nightmare. I applied for the United Explorer card and was denied online. I then called their consideration department, explaining that I had such a short credit history because I had recently graduated from college, and since I had a stable income I can be trusted with a credit card. The representative on the application reconsideration line asked me to provide proof of address after putting me on hold for 5 minutes.
After taking my housing contract to a Chase branch to get it faxed to the appropriate department, I had to wait for 10 days for them to process my new item. As I called to follow-up, they demanded a utility bill since my housing contract had some handwriting on it. I patiently took my utility bill to a Chase branch to get it faxed. Then I called again, and this time the representative said she could not approve my application since the lowest limit on the United Explorer card would be $2,000, and up till that point in time, I had had only one card, secured with a $2,000 limit.
The kind lady informed me that other cards, such as the Freedom, do not impose a floor on the limit. Knowing that, I then applied for the Freedom, their most basic, most commonly used and most commonly seen card. The limit on this card could go as low as $500. And I also had a few thousand dollars in a Chase checking account. If their only concern is with the $2,000 limit floor, I should be approved for a Freedom easily. Or so I thought.
What’s their reason this time? That I had just a 9-month credit history and that my only card was a secured card. Yes, that’s right. I had a 9-month-old secured card and nothing else. No argument about that. But Chase, why didn’t you just tell me that from the very beginning and save me the time of calling you many times, submitting a bunch of documents, and waiting and waiting and waiting more? I don’t believe they made up reasons to deny my application to induce me to waste the time and effort on them. Maybe this incident is a result of insufficient staff training, or a result of arbitrary human decisions. In retrospect I should have called them again, speaking with a different representative and hoping to reach one who would concur with me.
Later on, I learned that Chase is very strict in demanding that an applicant for credit have at least a year of credit history. The representatives did tell me to let my credit history and my checking account at Chase “age a little bit” and give it a try later. I was not going to waste another credit inquiry on Chase anyway, so I held off on applying again until I would hit the one-year mark of credit history.
As of last week, I had one year of credit management experience with perfect payment history, along with a 5-month-old checking account. I had just pulled out a big chunk of my assets with BofA and deposited the money into my Chase savings account to get a promotional bonus. Since last September, I have also directly depositing a portion of my paycheck to my Chase checking account to build a banking relationship. As I have mentioned in a previous post, a banking relationship is a powerful leverage for credit applications. So really, it would be hard for Chase to justify another rejection. That said, I was prepared to call their consideration line multiple times if the worst case scenario were to happen.
And it didn’t. The only job left for me is to spend $1,000 on each card in the next 3 months to get the sweet bonuses. And Chase actually helped me out with this: upon hearing my slight disappointment with the short time window to satisfy the spending requirement, the representative on the phone said she was going to expedite the delivery of the cards. Both of them arrived through UPS Overnight on Wednesday, 3 business days upon the approvals, and 1 business day after I was notified of the new accounts. It sounds like Chase changed their attitude 180 degrees doesn’t it? All it takes is patience and a little bit of strategy.
As I am writing this, I’m on the way to New York City which is currently being hit heavily by blizzard Nemo. 3 months ago, on a similar trip which coincided with the days when storm Sandy devastated the city, I gave in to my inspiration and started my personal finance blog with the first and also most popular post. 3 months later, I have written 24 posts, have accumulated about 1,000 views, have inspired my friends to start building a credit history, and have gather positive feedback on the blog. Without you, my dear readers, this blog would not be running today. Thank you for following me on this financial journey.
It also happens that tomorrow, Sunday February 10, 2013, is the Lunar New Year. I wish you all a year of longevity and prosperity. Happy Lunar New Year!!!
(Still) From Seattle with love,