How the Chase 5/24 Rule Affects Credit Card Rewards
Many credit card rewards enthusiasts use credit card churning to take advantage of the sign-up bonuses, a lump sum of credit card rewards paid to new cardholders who meet a minimum spending requirement. Unfortunately, if credit card issuers make it harder to get approved for new credit cards, it can hinder your ability to earn new credit card sign-up bonuses. Notable, the Chase 5/24 rule forces credit card churners to alter their rewards credit card strategy and can even make it more difficult to earn credit card rewards.
The Chase 5/24 Rule
The 5/24 rule is an unofficial rule from Chase that only allows applicants to be approved for a new Chase credit card if they've opened fewer than five credit cards in the past 24 months. (Note that Chase additionally limits the sign-up bonus on all their credit cards to customers who haven’t earned a sign-up bonus from Chase within the past 24 months.) Those five credit cards could have been opened from any bank, not just Chase. The Chase 5/24 rule also applies to any credit cards on which you’re an authorized user.
The 5/24 rule has been around for at least two years now. Doctor of Credit first reported Chase’s 5/24 Rule back in May 2016. When it was first introduced, the 5/24 rule only applied to a few Chase credit cards––the Sapphire Preferred, Freedom, and Freedom Unlimited cards. Within a few months, the rule was expanded to most Chase credit cards, even some co-branded and business credit cards.
You're not guaranteed approval simply because you opened fewer than five credit cards in the past 24 months. Chase will still review your credit history, your income, and your debts to determine whether you qualify for the credit card you’re applying for. You can be denied for any number of reasons. If you're denied, you'll get a letter in the mail detailing the reasons your application was denied.
Chase 5/24 Rule Exceptions
This is an unofficial list of Chase credit cards you can be approved for despite the 5/24 rule, as long as you meet the other qualifications:
- British Airways Visa
- Disney Rewards Visa
- The Hyatt Credit Card
- IHG Rewards Club Select
- Marriott Rewards Premier Business
- Ritz-Carlton Rewards
Note that the 5/24 rule doesn't count against you when you're applying for one of these credit cards with Chase, but opening one does increase the count toward your five credit card limit.
Chase only counts credit cards that are on your credit report. That means that small business credit cards that aren’t on your personal credit report may not count against you. If you haven’t kept records of the account you’ve opened or you just want confirmation of the accounts you’ve opened, check a recent copy of your credit report. You can get all 3 of your credit reports for free by going to AnnualCreditReport.com. You can also use Credit Karma, Credit Sesame, and Wallet Hub to check your credit report information.
Chase only counts credit cards you’ve actually opened––any denied applications won’t count against you. Though, if you were denied for a credit card, Chase could deny you for those same reasons.
The rule only applies to credit cards. It doesn’t include other types of credit accounts you’ve opened recently.
How to Deal With the 5/24 Rule
If you’re a credit card churner and you want to include Chase in your credit card rewards strategy you'll have to be more diligent about tracking your credit card applications. Space your applications so that you only apply for 5 credit cards within a 24-month period. This means applying for only 2 to 3 consumer credit cards each year.
The impact is that you can’t earn as many sign-up bonuses as you could if you could apply for, say 10 credit cards each year. It may also limit the number of credit card rewards programs you are participating in. However, having fewer credit cards could allow you to maximize the rewards you earn on the credit cards you do have.
You may include business credit cards in your rewards credit cards strategy since many don’t report on your personal credit report. This would allow you to continue earning sign-up bonuses without affecting your 5/24 rule status.
Chase isn’t the only credit card issuer to place limits on your ability to earn a sign-up bonus. American Express, for example, only allows applicants to earn one credit card bonus in their lifetime. It seems the 5/24 rule is here for a while, but keep in mind that any credit card issuer can change policies at any time without warning.