By Adam Jusko, ProudMoney.com, email@example.com
Chase has added a new sentence to the Terms & Conditions of its credit card applications that gives Chase the right to check any of your bank accounts or other financial accounts it may have access to when making a decision on your credit card application — even information from other banks:
“We may obtain and use information about your accounts with us and others such as Checking, Deposit, Investment, and Utility accounts from credit bureaus and other entities.”
Back in May of this year, the Wall Street Journal reported that an agency of the U.S. government had encouraged the largest banks to work harder at approving new-to-credit consumers for their first credit cards. Chase as well as a number of other banks (including Wells Fargo and US Bank) had agreed to participate in a pilot program that would see these banks share information with each other about their customers’ bank accounts, with the idea that this would provide a starting place to assess the credit risk of applicants who had little to no information on file with the major credit bureaus.
Chase took the lead in this process earlier this week by introducing the Chase Slate Edge Visa, a no-annual-fee credit card with modest features but presumably an easier path to approval for those with no credit history (and maybe those with lower credit scores than Chase would normally accept). Within the Terms & Conditions of this new card’s application was the sentence referenced above that allows Chase to check bank, investment, and utility accounts as part of the approval process.
However, this new sentence giving Chase greater latitude to check a wider array of financial accounts is not exclusive to the Chase Slate Edge card. It has been added to the Terms & Conditions of all online Chase credit card applications, with no ability to “opt out.” If you want Chase to consider your application, you must agree that they may look at financial sources beyond your credit reports.
Should You Be Worried?
As mentioned, the main reason that Chase would look beyond your credit report would be if there simply was not enough past credit history to make a decision on your card application. For those new to credit, or perhaps those with some history but lower scores than Chase might normally accept, they might welcome Chase accessing other accounts that prove their financial responsibility. Those with higher scores might see this as an infringement on their privacy, another way for banks to snoop on them for better or for worse.
While it’s unlikely that Chase would use this “second layer” of bank account information on those with higher credit scores, the fact remains that Chase is forcing the acceptance of these terms on all new applicants.