What is the Chase ‘5/24 rule’ and how it works

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Personal Finance Writer
Summer Hull writes the weekly “Get to the Points” column for CreditCards.com

Get to the Points

A new
year brings with it new possibilities for travel and travel deals, but one of
the peskiest rules in the rewards credit card space, the Chase 5/24 rule, can put
the brakes on seasoned rewards card holders looking for a new deal.

The “Chase
5/24” rule, as it is commonly called in the miles and points community, refers
to the reality that even a perfect credit score isn’t enough to get you
approved for many Chase rewards cards. If you have opened five or more new
credit card accounts in the past 24 months, you won’t be approved for a new
Chase card.

Note
that this doesn’t just refer to the number of Chase accounts you opened in the past
two years, but rather the total of all new credit cards you have opened across
all banks.

Since
Chase is the issuer of many popular and lucrative rewards cards, including
the Sapphire Reserve and Sapphire Preferred, as well as co-branded credit cards
from Marriott, Southwest, British Airways, Hyatt, United and more, this rule can
present a hurdle if you’ve been playing the rewards card game for a
while.

Sometimes
if you don’t get an instant approval for a new Chase card, you can talk to a Chase
rep who can shift around credit lines or close an old credit account to get you approved for a new one. But if the reason for your denial is you are in
violation of its 5/24 rule, no amount of begging, pleading or swapping of credit
lines is going to get you an approval.

There
is no magic workaround to this rule other than simply waiting it out until you
have been approved for less than five credit accounts in the past 24 months.
However, there are some ways to at least mitigate the impact of the rule.

Not all Chase cards are
covered by 5/24 rule

While
most Chase rewards cards are covered by the 5/24 rule, there are some that are
not included, according to various card reward bloggers around the web. While this unofficial list of cards can change at any time, you
potentially can get approved for these Chase cards even if you are over 5/24:

The
catch is that getting approved for one of these cards will then count toward
your 5/24 if you apply for a subsequent card, but simply being over 5/24 won’t
automatically disqualify you from getting approved.

Apply for a pre-selected “Chase
Offer for You”

There
are reports that when logging in to your Chase account you notice the “Offers
for You” section has some Chase credit cards listed with green check marks next
to them may get you around the 5/24 rule for that particular card.

Go for business cards

The
Chase 5/24 rule counts credit and charge cards opened across all banks, but
many small business credit cards aren’t included on your personal credit report.

Small-business credit cards from Citi, American Express, U.S. Bank and even Chase don’t
typically report to your personal credit report. However, this isn’t a
universal rule as Capital One’s small-business cards do report to your personal
credit report and thus would count against 5/24 totals.  

Due to
the way these cards report, or in some cases don’t report business card activity, to your personal credit report, if you have a small business it may be an option to go for some of the
popular small-business rewards credit cards, such as the SPG Business AmEx,
Gold Delta SkyMiles Business AmEx or the CitiBusiness AAdvantage Platinum Select World Mastercard
instead of the personal versions of those cards if you want to keep your 5/24
count as low as possible.

Double-check your own 5/24
count

While
you can’t get around a denial from Chase for being over 5/24, you should do
your own count to make sure you really have opened five or more new accounts in
the past 24 months.

For
example, Chase’s automatic system seems to include authorized user accounts. You
can try to talk to Chase and explain that there is an authorized user account in
that total that should not count toward your 5/24 numbers. If this drops you
below 5/24, then you may be able to get approved for a new Chase card even if
you were initially denied due to being over 5/24.

The
most reliable way to count your new accounts is to access one of your annual free credit
reports

or your free TransUnion report from CreditCards.com and look at when your various credit card accounts were opened. Any cards that were
opened in the past two years and are reflected on your personal credit report
will likely count in Chase’s 5/24 totals, even if you have already closed the
account.

Chase
5/24 rules and limits are real, so it pays to be very strategic when considering
which new rewards cards you want to add to your wallet.

See related: Maximize credit card rewards miles redemption through partner airlines, Hot, new rewards cards to debut in 2018




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