What’s the deal with [Seinfeld voice] Bank of America’s requirement to bank with them in order to get approved for credit cards?

Bank of America has never really been a big component of my churning strategy. They have a pretty good travel rewards/cash back hybrid card, although that card is not nearly as good as it sounds from advertisements like this one. My main issue with it is that it’s basically a Chase Freedom Unlimited unless you have a ton of money on deposit with BofA, in which case your return on everyday spending will be over 2.5%. It’s not like BofA invented the idea of a credit card pitched toward people who do a lot of business with a bank – HSBC and UBS both have similar cards, and of course there’s always the J.P. Morgan Reserve card for people who have $10M on deposit with Chase.

The difference with the BofA card is that it sets up a tiered structure, rewarding different levels of deposit, and it applies across account types, rather than it being a card for people with X dollars who can afford to set up X premium checking account. It also signals that growing the deposit base is important for BofA, which is a trend I really hope the other banks don’t follow.

Reason number one, to quote Miles per Day, is that you shouldn’t shit where you eat. A lot of the stuff we do is legal in a literal sense but against the spirit of the rewards programs we’re gaming, and banks have exceptionally wide latitude to shut you down for any perceived violations of their terms. If your banking is all with Chase and they shut you down for ramping up your gift card purchasing, it’s going to be a huge pain in the ass for you to recover and start over with a new bank. On the flipside, if you have your main account with a credit union or a lesser-used bank (in churning terms), you are much safer if you do want to test the limits with the big credit card issuers. If BofA wants their cardmember base to overlap with their deposit account customer base, it’s going to require those cardmembers to play a lot safer.

Reason number two is perhaps more worrying, which is that in addition to rewarding people with lots on deposit, BofA also may be punishing people who don’t bank with them at all. I don’t have a lot of data points here (well to be exact, I have three data points here), but it seems to be increasingly common for BofA to deny credit card applications for “Limited deposit and/or investment balances with us and/or our affiliates.” My friend applied for the Premium Rewards card this past fall and was rejected for this reason, and reconsideration was no help. The line was simple – don’t apply for any new cards (from any issuer) and establish a banking relationship with BofA, and you may get approved for it later.

I recently applied for my fourth Alaska Visa card (my fourth one ever — I only have one other one open right now), and today I received my first ever credit card rejection in the mail. Now, that’s pretty good given that between business and personal, I’ve applied for around 35 cards over the past few years. I know that BofA has some restrictions on how many of their cards you can open, but I’m well under those limits, so I didn’t really think I’d have a problem. Turns out I do have a problem: not only do I have “too many recently opened accounts,” I was also rejected for the “limited deposit” reason.

This is weird, since I have always been instantly approved for every BofA card I have applied for.  I already have an Alaska card open with BofA, and it has an enormous credit limit, so clearly they aren’t worried about my creditworthiness (although the rejection letter did come with a fairly condescending letter about how if I focus on paying my bills on time, I can restore my good credit rating and maybe get a card down the road). I’m hoping this will help me with the reconsideration call, since I may be able to move credit off of my current card onto the new one. However, even if I get this card, I don’t think I’m going to be able to continue opening an Alaska card every six months, which makes me retroactively super pissed that I hadn’t been opening one every two months for the past few years.

It’s no secret that it’s getting tougher to mine sign-up bonuses, and my concern here is that on top of BofA’s 2/3/4 restriction (described in the Doctor of Credit article linked above), they’re using the “limited deposit” thing as an all-purpose banhammer to make it harder for churners to get their cards. It’s a real bummer if this is the case, since the Alaska card was one of the last true churnable cards that I know of (although I’m sure there are other cards that I don’t know about, since they’re only talked about in secret forums on the dark web or something).

I will update this post once I have a chance to call reconsideration on Monday, but I’m not super confident about it. It seems like the tide at BofA is turning away from liberal approvals and toward a focus on profitable customers, which makes perfect sense for any business… but still sucks for you and me.

Any one else have data points here on recent rejections chez BofA? I’m specifically interested in people who are under 2/3/4 but who still have been rejected for either the “too many accounts” or “limited deposit” reason.

Update: I called reconsideration, and they were no help. I tried everything I could think of, including reallocating credit lines, and they weren’t convinced. My new card applications are going to slow to a trickle due to some big minimum spends I’m working on right now, so I may try again in a few months and maybe even open a BofA checking account too. At this point I want to see how easy/hard it is to overcome their new restrictions. BOOO!

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