You may have heard of this pesky rule that Chase Bank implemented a few years back dubbed “the 5/24 rule.”
I’ll save you the long story but back in 2015, many people with excellent credit applied for Chase Ultimate Rewards-earning cards and suddenly found themselves being denied. Many of those applicants called Chase seeking an explanation for the denial and were told they had “opened too many new accounts in the last 24 months.” It wasn’t long before denied applicants began comparing notes and determined that the cut-off for a Chase denial was opening five or more credit card accounts across ALL BANKS in the previous 24 months, thus giving rise to the aptly named “5/24 rule.”
Chase does not explicitly mention this rule anywhere so the points community largely rely on data points (other people and their experience) to make conclusions.
If you spend any significant amount of time in this hobby, you will realize that it’s an ever changing landscape. Be smart, take it slow and plan out your applications with all credit card.
In order to be approved for ANY Chase card (that’s business and personal), you cannot have opened five or more personal credit cards across ALL BANKS in the last 24 months. This means you need to be 4/24 or lower to be approved. This rule only applies to being approved for cards issued by Chase, but your 5/24 status includes your cards from all banks.
Confused yet? Time to simplify….
Let me give you an example to demonstrate how this works.
Example #1: You have been approved for six (6) American Express personal cards within 24 months and then decide you would like to apply for a Chase credit card.
Your “5/24 status” = 6/24
Example #2: You have been approved for two (2) Bank of America personal credit cards, and three (3) American Express personal credit cards within 24 months and then decide you would like to apply for a Chase credit card.
Your “5/24 status” = 5/24 (2 BOA & 3 AmEx)
Example #3: You have been approved for two (2) Barclay Bank personal credit cards, 2 American Express personal credit cards, and three (3) Citi Bank personal credit cards within 24 months and then decide you would like to apply for a Chase credit card.
Your “5/24 status” = 7/24 (2 Barclay+ 2 AmEx + 3 Citi)
In all of the examples above, time has shown that you will, typically, be denied when applying for a chase credit card. There are some outliers (people being approved despite being 5/24 or above) but for the remaining 99% of us, denial is inevitable.
You may have noticed that I underlined the word ‘personal’ in the above examples. I did this because there are some nuances to this equation.
Example #4: You apply and have been approved for one (1) Barclay business credit card, two (2) American Express business credit cards, and one (1) Citi Bank personal credit cards within 24 months and then decide you would like to apply for a Chase credit card.
Your “5/24 status” = 1/24 (1 Citi Bank)
Yes, you read that correctly! Business credit cards do not appear on your credit report and your credit report is what Chase uses to assess your 5/24 status. However, there are three caveats here:
1) Discover and Capital 1 Business cards DO REPORT to the personal consumer credit bureaus.
2) The remaining big banks have said that they do report to consumer reports but in my experience I have never seen it on my credit report but obviously it’s always possible in the future.
3) Despite it being a business card, the owner has personal responsibility to pay the bill. If the bill falls into default, you can guarantee the business card will report to the personal credit report.
WHAT HAPPENS AFTER 24 MONTHS?
After 24 months, hard inquiries (e.g. credit card approvals, etc.) are removed from your credit report and your 5/24 status will decrease barring you did not apply for more credit cards or do anything that would appear on your credit report.
5/24 can be a difficult concept to understand. I thought I understood when I started using my credit cards but I didn’t so if you have any questions or need clarification, feel free to leave a comment below. I’m here to help.