Don't get an Amazon credit card from Chase | Hacker News Reader

Don't get an Amazon credit card from Chase

4 pointsprirun8 comments

I've been buying stuff from Amazon for years. A few months ago I finally gave in and signed up for the Amazon credit card. Big mistake!

The card had a $500 limit, which I didn't realize or would never have signed up. I maxed it out the first month. When I called Chase to get the limit extended, it was a big runaround with non-native-English support reps I couldn't understand, plus to get it autopaid from my checking account, I had to sign up for online crap with Chase. So I canceled it. 2nd big mistake.

My insurance agent calls the other day and said my insurance went up more than 8% because my insurance score went from 950-something, a high score he said he rarely sees, to 851, which is high but not unusual. Trying to figure out what caused the drop, he asked about my credit - had anything changed. After talking about it, he guessed it was the new credit card that was canceled. It makes sense because one of the credit risks used in scoring is the balance to credit limit ratio. With that $500 card I hit the limit. LexisNexis goes into more detail:

https://consumer-solutions.custhelp.com/app/answers/detail/a_id/2523

My insurance is now costing me $400 more a year, and according to that page, it could stay on my credit report for 7 years. That's messed up.

Don't get an Amazon credit card!

When I signed up for Amazon’s credit card it was because 5% back is a meaningful amount given we spend >=$25k a year on Amazon. Using the card we do: ~400 orders a year online; ~2 shops a week at Whole Foods; 2-3 lunches a week at Amazon Go. I’ve had to reach out a few times to Chase for support.

As I recall the limit Chase offered was very clearly stated and it was >$500 but not incredibly high compared to other credit card products we had obtained in the last 1-2 years. They will raise it after 6 months of responsible usage but certainly not immediately.

Anything over 30% credit utilization seems to have the potential to impact your credit scoring negatively.

Length of financial relationships is also a factor in credit scoring.

Little or none of this is unique to Amazon’s card via Chase. It is unfortunate you got tripped up and I’m sorry to hear about your experience and the repercussions, however it seems somewhat unfair to blame Amazon to me.

It seems to me:

1. You failed to notice the credit limit was $500

2. You maxed out the credit limit

3. You didn’t have AutoPay configured

4. You didn’t want to sign up for online banking but equally want to complain about phone support

5. You canceled the card

6. You didn’t do any research or apparently have any understanding of how U.S. credit scoring works

Many of your statements imply a certain naivety on credit products, and I think you should examine how much fault here is really Amazon or Chase, and how much is personal. Sorry again.

PSA: Careful when you cancel a credit card or pay off a loan early. The average length of credit is a factor on your credit report, and a very short term will hurt that factor.

I think the issue could also be viewed from the perspective of arguing that the insurer has overweighted some variable in an overall opaque process for calculating premiums, and the conclusion might be "Don't get XXX insurance from YYY Corp"

And there was no other major event that happened? We don't know if this is home insurance or auto insurance or health insurance or even something like marine vessel insurance. You didn't file a claim at all? Didn't get in an accident? Purchased a new/second home or vehicle? Changed jobs? Are you part of a program like DriveWise that monitors your driving habits? Had a recent medical procedure done? I think it awfully pre-mature to just assume that getting and cancelling a credit card would be the cause of this change.

EDIT: Heck, if 8% is a $400 increase, where do you live? Have you been affected by any recent natural disaster events? Have you added anything or changed your coverage at all?

It's best to never get a credit card. The deals they give you are usually great, but they don't offset how much you pay in interest. If you need to get a credit card don't get one from a store, the terms are usually significantly worse than going straight to the credit card company.

I have a feeling this could happen with any credit card.

950 credit score is not possible

Insurance score, not credit score.

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