Chase plans to issue far fewer credit cards thanks to unfavorable changes tied to the recently passed CARD Act.

The Credit Card Accountability Responsibility and Disclosure Act (CARD Act), which became law on February 22, prohibits arbitrary interest rate increases, ends double-cycle billing, and eliminates negative payment hierarchy, among other things.

At issue is the inability to raise interest rates for those deemed higher-risk, along with the elimination of negative payment hierarchy, which forced credit card payments to low APR balances before higher APR balances.

It was a great deal for the banks because it essentially trapped consumers in a never-ending and growing credit card debt cycle.

But without such gimmicks, many potential cardholders are simply too risky to take on, so Chase plans to go after more affluent consumers via its Sapphire and Slate credit cards.

In his annual letter to shareholders, Chase CEO Jamie Dimon said the company would no longer market credit cards to approximately 15% of the customers it currently offers them to.

Additionally, he said Chase has reduced very low introductory and promotional balance transfers, which cut outstanding credit card balances by a staggering $20 billion.

The company has also reduced limits on credit lines and canceled credit cards for customers it hasn’t done business with over an extended period of time (me included).

The credit card industry on a whole reduced credit card limits from $4.7 trillion to $3.3 trillion over the past couple years, per Dimon’s letter.

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