If you have a Chase Mastercard that you received as a result of the split between the Exchange Credit Program's Military Star Card and Chase Bank, you need to know about changes to your Chase account.
Last month, Chase sent out letters explaining that they were changing all Chase Military Mastercards to Chase Freedom Unlimited Visa Cards, effective 15 August. It looks like this:
Some Background
Prior to 2015, the Exchange Credit Program offered two different types of cards: A store-branded Star card that could only be used at Exchange facilities, and a Chase Mastercard Star Card that could be used anyway. In September 2015, the Exchange Credit Program terminated its relationship with Chase. Customers who had the Chase Mastercard Star Card were given two new accounts: A store-branded Star card, run by the Exchange Credit Program, and a Chase Military Mastercard, administered by Chase Bank.
As a result of this split-up, many folks now had two accounts when before they only had one. And, often, they're really only using one of them. The other account is just sitting there.
The Change
Chase is eliminating the Military Mastercard, and moving all customers to a Freedom Unlimited Visa. This isn't uncommon for a credit card company to make a wholesale switch like this; USAA did something similar a few years back.
It is important that you know about the changes to the terms of the card, what impact this change may have on your credit report and score, and then you should consider whether you actually want to maintain the Exchange Credit Program Star Card, the new Chase Freedom Unlimited Visa, or both. You don't have to accept this new card. You can choose to close the account and pay off the balance under the old terms.
There are many different personal finance philosophies out there. Some folks think that all credit is bad. I don't agree with them, but I understand why they feel that way. Other folks feel that a moderate amount of credit, used appropriately, is a good thing. Some people are very picky about the companies with whom they'll do business (me!) Other people prefer to shop around for the best deal. How you want to proceed with this card change will depend a lot on your overall thoughts about credit cards in general.
Key points:
This change isn't adding or taking away any lines of credit or changing your interest rate.
It's likely that this "new" card will show up on your credit report with the same age as your original STAR card. For some folks, that's their oldest credit. Chase has not confirmed that this is true; we will have to see. If you are concerned about your credit score, closing your oldest account is not recommended. However, actual results will vary depending on your overall credit profile. If your credit is overall good, closing your oldest account should have only a small impact, and for a relatively short period of time. But no two situations are the same!
The new card will not feature the "Blue Star Deployment Benefit."
The new card will have a foreign transaction fee of 2%. If you've been using your Chase not-a-STAR card for foreign travel because it does not have a foreign transaction fee, you may want to reconsider.
Overall, this change is relatively small. But it is a good opportunity to decide whether you actually need to keep the card, and to look at your overall credit situation. While experts don't completely agree, the generally accepted wisdom is that you should have 2-4 general purpose credit cards in your credit portfolio. If you can be responsible with credit, that's probably a decent suggestion. But if the availability of credit helps you make bad decisions, then you may want to consider decreasing the amount of credit available to you, or closing your credit accounts altogether.
What's right for you won't be right for your neighbor, co-worker, or friend, but you need to make an informed decision based upon all the information.
