The Chase 5/24 Rule Explained

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All the major credit card issuers have different rules when it comes to applying for credit cards, whether it involves approval, earning the sign-up bonus, etc. I’ve written about Chase’s rules when it comes to applying for cards, and one of the biggest restrictions is what we often refer to as the 5/24 rule. This was first introduced a couple of years ago, but has been expanded quite a bit since then.

I’ve explained the policy in the past, though there’s one consistent point of confusion readers seem to have, which I figured I’d cover in this post. But first let me recap the basics of the 5/24 rule:

What is Chase’s 5/24 policy?

With Chase’s 5/24 policy, you typically won’t be approved for a card if you’ve opened five or more new accounts in the past 24 months. This is more of a general guideline than a strict rule, though. Here’s what you should know about 5/24:

What confuses people about the 5/24 rule

Reader CA805JV asked the following in the Ask Lucky forum, and it’s a question I get asked all the time:

Hi, I have a question regarding the Chase IHG Card and the 5/24 rule. I’m currently at 3/24 and am very interested in the Chase IHG card. I know one can get this card if they are over 5/24, but what happens I f they’re below? If I get this card will my 3/24 become 4/24?

I understand where the confusion comes from. Typically when I write about cards I try to make the rules around approvals clear. So when I write about a card like the IHG Card, I’ll typically say the card isn’t subjected to Chase’s 5/24 rule. That’s to say that you can potentially be approved even if you’ve opened five or more card accounts in the past 24 months.

That doesn’t mean that applying for the card doesn’t count as an application for the purposes of applying for other Chase cards in the future. In other words, if you’ve opened four card accounts in the past 24 months and then apply for the IHG Card, you’ll then be at 5/24, and likely ineligible for cards like the Chase Sapphire Preferred® CardInk Business Preferred℠ Credit Card, etc.

The only cards you can apply for that don’t increase the number of new accounts that show as open on your credit report are select business cards not issued by Chase. This typically includes Amex business cards, and it’s because they typically don’t do a credit inquiry on new business cards if you’re an existing cardmember with them, as I explained in a previous post.

So hopefully this clears that up, and especially clears up what’s meant when I say a card is or isn’t subjected to the 5/24 rule.

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Comments

  1. You should clarify since I think you got it wrong above. You say “you typically won’t be approved for a card if you’ve opened more than five new accounts in the past 24 months”. I think it should either say:
    1) if you’ve opened five new accounts…
    2) if you’ve opened more than four new accounts…

    “More than five” accounts implies that if you only have 5, you would not trigger the rule. I don’t think that is the case.

  2. On the Amex biz cards, it’s not just that they don’t do a credit inquiry. None of my Amex biz cards are reported to the credit bureaus. My personal Amex cards, including my Platinum card, are reported to Experian, etc …. but my Business Gold Rewards and Blue Biz Plus are not.

  3. @Tom “More than five” accounts implies that if you only have 5, you would not trigger the rule. I don’t think that is the case.”

    Nope, as usual, Lucky has it more or less correct. 😉

    The 5/24 rule is a misnomer anyway. For most Chase cards, excluding the IHG card, the British Airlines card, and the Marriott Business (not personal) card, you will be automatically denied if you have opened more than 5 ccs in the past 24 months. If you have opened 4 or less ccs, and your credit history is good, you will almost certainly be approved.

    But if you have opened exactly 5 ccs in the past 24 months, it’s totally YMMV. Some people get approved with 5 cards in 24 months, some get denied for the exact same thing. It’s apparently based on how Chase feels about your credit worthiness.

    Business cards are a different matter, since as long as you keep your accounts in good standing they don’t appear on your credit report at all. Yes, the hard inquiry might appear, but the card itself will not appear. Since Chase goes on “new accounts opened”, instead of hard inquiries, business cards should not count at all.

    Now if your business card is issued by Chase, of course they know you have it. But some people report it still isn’t added to the 5/24 count. I’m guessing it’s like what I said above. If Chase likes you, they will ignore it. If they are uncertain about you, they might not.

    Finally, if you are new to this miles and points game, here is the strategy, which applies directly to the question Reader CA805JV asked above. If you have applied for less than 5 non-business cards in the past 24 months, don’t apply for the IHG card, or the Marriott Business card, yet. Apply for the cards that Chase won’t give you after you have 5 new personal accounts on your credit report. Apply for the Ink cards, the Southwest and B/A cards, the personal Marriott, and United cards first. Then when you are over 5/24 is the time to apply for the IHG and Marriott business cards that are, at least at the moment, immune to 5/24.

  4. In my experience, Chase will also generally hold authorized user cards against your 5/24 count in the first instance, though I’ve had success in the past getting them to reconsider by calling up.

  5. I have been searching for a while now to see how to actually count the 5/24, I have only found like 5 data points… If you fall off 5/24 on 8/16/17, can you apply 8/2, 8/17 or 9/1. I say 8/2 as opposed to 8/1 as Experian reports new cards opened on the 1st of the month. If we go by 8/1, then technically, if you opened a card 8/15/15, it would be reported opened on 8/1/15 and 24 months would end 7/31/2017, so I would think to apply in early august, but some posts say you have to wait until September, basically making it 25 months… I ask, because this is my exact situation, and I will be applying on 8/2 for the Ink Proffered!! But, if I know I won’t get approved, i might as well save the hard inquiry.

  6. My experience on managing several accounts is that Chase Business Cards do not count if you manage to get instant approval for a personal card (presumably because the automated system simply looks at your straight credit report which does not include business cards – not even Chase issued ones) but if it goes to manual review then a human will see whats on your credit report plus they have access to ALL Chase accounts and include it in the count. I was rejected for a Sapphire Reserve Card because of 5/24 and the analyst specifically mentioned that they counted business cards, I reduced my credit lines waited about 6 weeks, re-applied and was instantly approved. Same process for a friend of mine.

  7. Authorized User accounts definitely apply towards 5/24. My wife recently was turned down for a CSP (even though she was approved for a CSR within the past year) for being at 6/24. 3 of the 6 cards, were cards I added her as an authorized user on.

  8. @MikeL I fall off 5/24 sometime this month, but just to be safe, I’m waiting to apply for the Freedom Unlimited until the 1st. That way I know for sure I am out of 5/24. Waiting these last few days is excruciating, but I don’t want to potentially get denied now and then have to wait a couple months to try again.

  9. @Steve Yes, the computer will automatically deny an app with AU cards pushing one over 5/24. But by calling the Chase Reconsideration line, one can get a CSR to exclude the AU cards from consideration and approve the app. Maybe not the first time you call, you may have to HUCA until you get a cooperative CSR, or if everything else fails ask to talk to a Supervisor.

  10. Auth users can be ignored if you 1) call in and 2) get an agent who knows what that’s the case. I fought long and hard, multiple phone calls, just to get a ‘pass’ for my current 3 in 24 card collection. One would hope that Chase could figure this out. And I wish that bloggers would report this as being the case.

  11. I agree, the article above does not explain why there is a 5/24 rule. I have been able to open more than 5 cards in a 24 month period, but it does take some phone calls to make it happen. The reason being for the 5/24 rule is that Chase does not want to extend too much credit to any one individual, thus they limit to the 5 cards. There have been exceptions where Chase will issue a 6th and 7th card, but this is a case by case basis. I have personally been approved in such cases. The explanation given to me by Chase was because of the credit limit, and the work around was to transfer credit from an existing Chase card to the new card you are applying for. For example, if you had the Chase Reserve with a credit limit of $25,000, and you wanted to open up say a Freedom Unlimited, and this card would be your 6th card within a 24 month period, Chase could reduce the credit limit on your Reserve to say $15,000 and allow you to open up the Freedom Unlimited with a $10k limit. The allows Chase to keep your credit the same but giving you an extra card within that limit. If you wanted to go further and try to open up a 7th card and so on, the same applies. They would find an existing Chase card and reduce that card’s limit in order to open up a new card. Your total overall credit limit is the same, but instead of your credit limit spread out over 5 cards, it is now spread out over 7, which in my opinion, it better for Chase since they don’t have to worry about a $20,000 balance on any one single card. Again, I have experienced this personally so I can attest to it. I just recently opened up a Chase Hyatt for myself to get the 2 free nights before the promotion changed to the points. I didn’t get an instant approval but a couple of days later I checked my account and noticed I was assigned a Hyatt credit card #. Once I received the card, I received the notice that my Freedom Unlimited was reduced (my Reserve was reduced to get the Unlimited) in order to open up the Chase. Hope this helps explain how it is possible to get around the 5/24 rule, and why the rule is even in place to begin with.

  12. I don’t really understand why people even bother to apply for chase cards? their miles are usually good only for United and potentially, for their star alliance partners (most of the charge atrocious booking fees for award tickets, especially in business class). United, by itself, is a pretty mediocre airline, in terms of its service and quality of their premium class cabins). Very few, like SAS, are pretty good, and don’t change booking fees but in my experience, United rarely gives premium award seats on it. So why would the frequent flyer community wouldn’t ignore Chase altogether: there are enough competitors like Citi, Bank of America, Barklay, even Amex (even though they officially wouldn’t give bonus miles twice on the same product, in reality they actually do, perhaps even 24-36 month–depending on a particular card), which don’t have that stupid 5/24 rule, and their partner airlines are in no way worse than United and its partners… That is why I stopped applying for Chase cards for almost two years now, and I find plenty of of other miles card to get.. I hope many others in this community and beyond would follow my example; perhaps then Chase would think twice about maintaining that stupid rule…

  13. Sam,

    To begin, let’s clarify that Chase does not issue “miles” but rather points, that can be transferred to any of their partners. While you are correct in that Chase does not have as many transfer partners as AMEX, there are still some valuable transfer partners. Airlines that you can trasnfer Chase Ultimate Reward points to include British Airways, Korean, Southwest, United, Singapore, and Virgin Atlantic. However, through British Airways, you can also book on Alaska, and via Alaska, you can book on Hawaiian. We have used our Chase points this way before for trips to Hawaii flying on either Hawaiian or Alaska. And some of Chase’s hotel partners include Hyatt, Marriott, Ritz, and IHG. And since Marriott’s merger with Starwood, we now have access to Starwood’s portfolio. Chase points are also very valuable, second to SPG points. If you know how to use the transfer partners, Chase points can be very valuable, which is why many people continue to accrue Chase cards. I, for one, have at least 6 Chase cards all accruing Ultimate Reward Points. I do agree that the 5/24 is a silly rule, but they have their reasons. Chase doesn’t want to allow someone to have too much credit with too many cards, so they limit the # of cards, and thus, the available credit/risk to one person. But many people in this community continue to get Chase cards, and for good reason…

  14. Does anyone know if (and how) FAILED Chase applications figure into the 5/24 rule? I was denied twice for the Reserve card and am now thinking of upgrading my Sapphire to get the Reserve (foregoing the sign-up bonus). Perhaps, I will also need to adjust my credit limits on my open accounts (Sapphire, Ink Bold, Freedom, United Explorer). Thanks in advance.

  15. Quick question….My wife and I were at the 3/24 area on our credit reports. Then we purchased a new vehicle. Well the dealership and toyota both now show as hard inquires on both our reports pushing us now to the 5/24 mark. Will this make us possibly unable to apply for some chase cards or are they only looking at credit card inquires which we would realistically only be at the 3/24 mark then?

  16. Oliver,
    I can’t believe you find ANY good reason to defent Chase (unless of course you work that, or any other bank). I have a FICO score of about 780-790, have NEVER in 30+ years defaulted, or even been late with ANY of my financial obligation–so what kind of credit risk are you talking about?! (I’ve heard that because of the 5/24 rule, people with FICO score of even over 800 were denied Chase miles/points cards).

    Do you seriously believe that Chase has a better tool to make risk assessment than Fair Isaacs, or there major credit agencies?

    I do wish people in this community would act collectively to boycott Chase for that rule that even YOU called “silly” (a severe understatement)

  17. Sam,

    Why would I have any reason not to defend Chase. I have a FICO similar to yours and have never defaulted as well. However, it sounds like the only difference between me and you is that I got around the 5/24 rule. Maybe it helped that I also became a Private Client on the same day I applied. And I got my girlfriend approved as well. And she doesn’t have a FICO as high as yours. My point: FICO scores isn’t the only factor. Sure, one’s creditworthiness is a deciding factor, but also realize that a bank may not want to do business with someone who has $100,000 in potential liability. You may have never defaulted, but it doesn’t mean you can’t.

    Do I think it’s a stupid rule, sure. Has it adversely affected me? No. So until it does, I have no problem with how Chase does things. And I am enjoy accruing all my Ultimate Reward Points.

  18. Oliver,

    Yes, obviously it has not affected you, otherwise I’m sure you would have had a very different view. I assume that you make 50-100K purchases on your Chase card, then you don’t need to have any other miles cards: you accumulate enough miles/points to redeem them award tickets on United or whatever other airlines are linked to Chase. To spend that kind of money on purchase would probably require an income about 2-3 times of the above amount. So I guess you’re lucky one: you’re among top 1-2% earners.

    For the rest of us, mortals, who make much, much less, the only way to accrue enough miles for award ticket is to take advantage of various promotional offers from other cards: Citi. Barklay, BofA, etc, the banks that don’t have–at least not yet–this assinane 5/24 policy. Not surprisingly, in my situation you would quickly run up more than 5 cards in 24 months period, which shuts you off from Chase cards.
    My only reason to comment on this policy on this website is to hopefully find other people who like me, got affected by this rule and perhaps start a online movement that would affect Chase and would make either cancel, or at least substantially amend this policy.

  19. P.S. Oliver, your example of somebody raking up 100K in debt and still having FICO score above 750 is rather inaccurate, unless that person makes over 1 million dollars a year. But in that case, the whole discussion about miles/points is completely irrelevant: with that kind of income that person could subscribe to a private jet service and never deal with commercial airlines at all.

  20. Sam,

    I completely understand your point. In fact, I am the opposite of the 1%. I don’t have a 6 figure salary. My brother and sister and I own a rental property which we did a cash out refi, hence the ability to deposit some money into Chase. I have a 14 credit cards which I strategically use to get as many points/miles as possible. I have never flown in anything other than coach before and because of credit cards, I recently flew on my first flight on Alaska first class to Hawaii, and we just booked our first ever trip on business class to Hong Kong using nothing but points. In fact I just checked my credit score and it’s 750 because I have at least 7 new cards opened within the last 18 months, as well as a mortgage and other loans. And as you know, part of what determines your credit score is tied to your utilization ratio, which is the total credit you have available. Most lenders believe that borrowers who are close to maxing out their credit are more likely to miss payments. Which can help explain why Chase has the 5/24 rule and how I was able to get around it. I recently added the Hyatt Card because I wanted to get it before they got rid of their free night certificate. I applied and got denied. No surprise there. But then I called and asked to have one of my other Chase cards’ credit limit reduced so they can transfer to and open the Hyatt card. They did that I got my card. So I have another Chase card when I shouldn’t have gotten one. But it didn’t require Chase to extend any more credit to me, which is what they are worried about. They simply reallocated my existing credit amount in order to give me another card.

    Again, I agree with you that the rule is stupid. What I am saying is I can understand why Chase does it, and I suggested a way to help you get around it. Now, if you don’t currently have a Chase card, doing what I did will be hard. But anyone on this website will tell you, as much of a hassle Chase’s policy is, their points are very valuable. I think they are 2nd most valuable behind SPG. I disagree with you that Barclay/B of A or any other bank is as lucrative, but that’s just my opinion. BofA just came out with a card to try and compete with the Reserve but what good are BofA points if they don’t have many travel partners?

    And on your last point…I have a FICO score of 750, and I can rack up at least $140k in debt by the end of the week thanks to all the cards I have. Now, will I be able to pay it all off? Absolutely not. But my point being, I have the ability to rack up that much debt (not necessarily maintain that debt).

  21. Oliver,

    I appreciate your explanation. Obviously, your situation is rather unique: you somehow manage to spend enough money, or travel frequent enough– to accumulate enough Chase miles/points to earn award tickets. I travel almost exclusively to Europe, and I really can’t earn enough miles/points for award tickets without taking advantage of various promotions on different credit cards. I agree with you that Chase offers probably better deals for the points/miles than some other banks (by the way, Bof A offers a credit linked to Alaska Air, which could be quite useful, and doesn’t have a strict limitation on how often one can earn bonus miles–I usually do it one every 18-24 month. The same is true for Citi and Barklay).

    As I said before, in my situation it’s very frustrating to be unable to get any of Chase cards exactly because they could be quite useful. But bear in mind, using Chase cards is not one way street: Chase makes money on all transactions, even if you pay your balance in full every month–they charge merchants a pretty hefty fees for using its cards. Even if you use them to spend 3K in three months to earn bonus points/miles–a pretty standard promotion– they still make money on it. So the 5/24 rule is just to punish people like myself, even if it goes against their self-interest. That is why I appealed to the community like this one to boycott Chase products–to respond to their ugliness and mean-spirit. Only wish there would be enough members here who would join me in this campaign.

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