In April I published a scary warning: Why Chase cancels accounts (and how to protect yourself). In that post, I reported that Chase had been shutting down accounts due to “perk abuse” and/or bad credit risk. A few weeks later, a thread titled “Nervous about high Ultimate Rewards balance?” appeared on FlyerTalk. Within that thread, quite a few people reported that they were transferring points out of the Ultimate Rewards program to try to protect themselves in case Chase decided to shut them down. The issue was that most people who were shut down lost all of their Chase points. Calls, letters, and emails to Chase had no effect.
Yes, it is scary, but…
In my opinion, a large part of the value of Ultimate Rewards points is their flexibility (if you have either the Sapphire Preferred or the Ink Bold). When I want to fly on a Star Alliance airline I simply transfer my points to United. When I want to stay in a hotel I transfer my points to Hyatt (other hotel options aren’t as good of deal, in my opinion). And, when I want to ride the train, I transfer my points to Amtrak.
To me, the risk of getting shut down is smaller than the benefit of keeping Ultimate Rewards points. In the post cited above, “Why Chase cancels accounts (and how to protect yourself),” I gave a list of Dos and Don’ts. If you follow that advice, I believe the risk of getting shut down will be very low.
Chase pays back
A few days ago, a reader sent me a link to this Fatwallet thread in which a guy reported that Chase redeemed themselves by sending him a check for the points that had been accrued in his forcibly closed accounts. This led me to the AARP thread in which many people reported the same thing.
To me, this turn of events is a big relief. It would still be a terrible thing to be shut down by Chase, but at least I would be likely to receive a penny for each point I had saved up. It helps me feel secure in my decision to keep my Ultimate Rewards points until I need them.
One FatWallet contributor posted a copy of his letter from Chase:
A word to Chase
Chase, if you’re reading this, I’m giving you a big thumbs up for the decision to pay back your customers for the points earned. I’d ask, though, that you make one more change: don’t close accounts without warning. I understand the need to tackle fraud head-on, but you should give customers a chance to challenge your findings. Give them a chance to prove their innocence before you lose them as customers forever. Sure, if you need to, freeze accounts until the matter is cleared up, but don’t walk out on your customers without a conversation. You may be surprised at what you find.
Have you had any run-ins with Chase freezing or closing accounts? Care to share your experiences? Are you keeping your Ultimate Rewards points or transferring them out? Comment below.