We devote thousands of hours of research to help you get Big Travel with Small Money. You support us by signing-up for credit cards through partner links which earn us a commission. Here’s our full Advertising Policy.
Two weeks ago, Emily applied for the fantastic Chase Sapphire credit card which offers 50,000 points after $3,000 in spend within 3 months [Now Expired].
These points are particularly valuable to us because we intend to transfer them to Hyatt at a 1:1 ratio and then redeem the points for 2 rooms at the Park Hyatt in Paris or the Park Hyatt in the Maldives – both of which regularly sell for $1,000 a night!
Yesterday, Emily got a denial notice in the mail. Below is an excerpt from that letter.
Chase Credit Card Application Status:
The denial reads:
Thank you for your interest in our CHASE SAPPHIRE Visa Signature credit program. Your application was given thoughtful consideration by CHASE BANK USA, NA.
After reviewing the information provided in the application and your credit bureau report, we regret that we are unable to approve your request for a credit account at this time. The reason(s) for our decision are as follows:
Too many requests for credit or opened accounts with us“
The Chase “6 Month Rule” Myth:
I know a lot of people who would read the letter and consider the decision to not approve the credit card to be final, and move on.
But that’s not true! You can – and SHOULD – always follow-up with the Bank to ask them if they would reconsider their decision. (This assumes that there were no late payments, bankruptcies or write offs on your credit report.)
Most banks set a limit on the TOTAL credit amount which they will extend to you. This limit is based on the bank’s internal risk-taking (or underwriting) policy, your income, length of credit history, and other variables on your credit report.
You may reach this total limit with 2, 3, or 4 or more credit cards, depending on the credit limit assigned to each credit card.
For example, $20,000 in total credit can result in:
- 4 Credit Cards with a limit of $5,000 each
- 3 Credit Cards with a limit of $6666.67 each or
- 2 Credit Cards with a limit of $10,000 each
Once you reach this limit, banks will no longer extend you any new credit (since doing so will increase the bank’s risk exposure) and will send you a denial notice. This was the type of denial notice which Emily received!
Note that this type of denial was sent to Emily only because she had reached the maximum limit of credit which Chase was willing to extend her. It was not sent because of concerns about her credit history, length of credit history or for too many inquiries (We’ll address how to overcome these concerns in later posts).
This type of denial is often – incorrectly interpreted – as evidence of the Chase “6 month rule,” where Chase will not issue a new credit card if you’ve had a credit card approved in the past 6 months. Don’t let this myth prevent you from getting bonuses on new Chase credit cards!
In fact, just 2 months ago Emily was approved for a Chase Southwest Credit Card which offered a free flight + $500 in credit cards, 1.5 months before that she was approved for the Continental Airlines Business Credit Card which offered 25,000 miles, and 1 month before that she was approved for the Priority Club Visa Credit Card which offered 60,000 Priority Club Points.
That’s enough evidence to suggest that the 6-month rule (where Chase would not grant you a new credit card within 6 months of your last approved Chase credit card) is just a myth!
Chase Credit Card Reconsideration:
I called the Chase Credit Card Reconsideration telephone line and within 1 minute I was speaking to a credit reconsideration analyst.
I strongly recommend calling the number above instead of the general customer service number or the application status line.
That’s because you’re more likely to be given incorrect information such as “Please mail your reconsideration request in writing to PO Box XX…” or “Sorry, we can’t reconsider your request” by inexperienced representatives through the general line or the application status line.
I started off by explaining that Emily was denied because she already had credit cards with Chase, but was willing to cut the credit line on her existing accounts in order to get the new Sapphire Preferred Credit Card.
The rep asked for Emily’s reference number (found on the denial letter) and verified her personal information.
She then said that since there were no issues with Emily’s credit report, she could approve the new Chase Sapphire Preferred Credit Card provided Emily reduced the limit on her other cards.
I suggested cancelling Emily’s Chase Southwest Airlines Personal Credit Card, since it was 11 months old and we didn’t want to pay the annual fee on the card.
The rep spent a few minutes processing the information in her system and Emily’s new Sapphire Preferred card was approved!
If the rep had NOT approved Emily, I would have called back again (call center agent roulette is the technical term) to see if another agent would have approved Emily.
The call took 5 minutes & 32 seconds to complete! Yes, that’s $2000 worth of hotel rooms for just 5 minutes & 32 seconds on the phone!
Bottom line: Don’t take credit card denial letters at face value, and always pursue a reconsideration. Sure, you might get denied again, but you NEVER know until you ask.
If you don’t get denied again, well, that’s more miles and points with which to have Big Travel with Small Money!
And don’t let the Chase “6 month rule” prevent you from applying for a Chase Credit Card with a good bonus offering. It’s just a myth!