What is the Chase 5/24 Rule?

What is the Chase 5/24 Rule and how does it affect you?

Oftentimes, the realm of credit cards is perceived as a game and the goal is to earn as many points, rewards, and other benefits in the least amount of time. For example, a 29-year-old bought a $60,000.00 Tesla with his Chase Ink Business Preferred Card, yielding an estimated $5,000 in rewards (hello, Maldives). Although his decision has mixed reviews, it demonstrates the power behind credit card utilization. Like any game though, there are rules and one notable rule is the Chase 5/24 Rule. 

The Chase 5/24 rule has not been formally published by Chase, but the rule is rumored to be true by many – even CNBC, Forbes, and Nerdwallet have commented on the vague guidelines set forth through the experiences of others. 

What is the Chase 5/24 Rule?

In a nutshell, the 5/24 Rule focuses on how many credit cards a person has opened in the past 24 months. Rumor has it that if someone has opened 5 credit cards from any bank in the past 24 months, then they will be automatically declined for any credit cards in the Chase family (this includes co-branded cards like the Amazon Prime Rewards Visa Signature Card). 

Which Chase Cards Are Included? 

Deciding when is the best time to apply for a new credit card is important, especially with guidelines like the Chase 5/24 Rule in place. However, to fully understand the rule, it’s important to know which cards the rule applies to. 

Chase Cards

  • Chase Freedom® 
  • Chase Freedom Unlimited®
  • Chase Sapphire Preferred® Card 
  • Chase Sapphire Reserve®
  • Chase Slate®
  • Ink Business Cash® Credit Card
  • Ink Business Preferred® Credit Card 
  • Ink Business Unlimited® Credit Card – This is David's business credit card!

What is the Chase 5/24 Rule?

Co-branded Cards

  • Aer Lingus Visa Signature® Credit Card
  • Amazon Prime Rewards Visa Signature Card 
  • British Airways Visa Signature® Card
  • Disney® Premier Visa® Card
  • Disney® Visa® Card
  • Iberia Visa Signature® card
  • IHG® Rewards Club Premier Credit Card
  • IHG® Rewards Club Traveler Credit Card
  • Marriott Bonvoy Boundless® Credit Card
  • Southwest Rapid Rewards® Plus Credit Card 
  • Southwest Rapid Rewards® Premier Credit Card 
  • Southwest Rapid Rewards® Priority Credit Card 
  • Southwest® Rapid Rewards® Premier Business Credit Card
  • Starbucks® Rewards Visa® Card
  • The World of Hyatt Credit Card 
  • United Club℠ Business Card
  • United Club℠ Card
  • United℠ Explorer Card

Why Does Chase Monitor 5/24 Scores?

The 5/24 Rule prevents credit “churners” from costing the credit card issuers millions of dollars and negatively impacting the company. “Churners” is a term that refers to consumers that open credit accounts solely for the sign-up bonuses, then cancel the cards. This form of credit utilization is dangerous to companies because credit card issuers earn revenue from charging fees to merchants for accepting their cards. If the company pays out a sign-up bonus to a consumer that doesn’t use the card beyond the minimum spend requirement, then the company is no longer making money from that consumer. 

According to Forbes, a report from Instinent in 2016 indicated that credit card issuers paid out $22.6 billion in credit card rewards. The 5/24 Rule allows Chase to mitigate their risk and still offer generous rewards programs for current and future customers. 

How to Calculate 5/24 Score

The simplest way to calculate where you stand in relation to Chase’s 5/24 Rule is to keep track of all your credit cards, including the application and approval dates, with a spreadsheet. Once each account has been open for 24 months, then you’ll be eligible to open another account. Usually, this is referred to as a “slot” being open in your “5/24 score.” If you’re currently not using a spreadsheet, then just reflect on the accounts you’ve opened in the past 24 months.

If you’ve opened 5 or more accounts, then your score is maxed out at 5/24. For example, I have opened 3 new credit accounts in the past 24 months, so I am at 3/24. With this score, I could apply for 2 Chase credit cards. 

I keep track of my credit cards with a Google Sheets page. I consistently track the application and approval dates, sign-up bonuses, minimum spend requirements and annual fees. This allows me to have a solid understanding of my credit card arsenal and visually see what cards I have applied for in the past 24 months. As I’ve mentioned before, the Google Sheets is incredibly helpful for future card planning as well.

When we have to make large purchases, we always consult the Google Sheets page to see which minimum spend requirements we could feasibly hit. If we can feasibly hit the minimum spend requirement, then we apply for the card. 

Strategy for Acquiring Chase Credit Cards

The first step is identifying what is important to you, whether that is cash back, rewards points, or other perks like free hotel stays. Once you have identified what is important, then research cards that align with your goals. After picking a few cards that align with your goals, then rank them based on the sign-up bonuses, minimum spend requirements, and annual fees. Once the cards have been ranked, then you have created a custom credit card plan to reach your goals. The key is being intentional with the application dates and adhering to the 5/24 Rule. 

What Other Credit Card Issues Have Rules?

Although not every company has rules, there are a few credit card issuers that have implemented their own version of the 5/24 Rule. 

American Express 2/90 Rule: You can only be approved for two American Express products in a 90 day period.

Bank of America Staggered Rule: You can only be approved for a set number of Bank of America cards.

  • 2 new cards in a 30-day period
  • 3 new cards in a 12-month period
  • 4 new cards in a 24-month period

Capital One: At any given time, you can have up to two cards from Capital One, and only be approved for one new card every six months.

Citi: You can only apply for one card every eight days and no more than two cards in a 65-day period. 

Cards to Consider if You’re Below 5/24

If credit cards are used responsibly, then they can yield significant benefits for consumers. If you’re below 5/24 and are actively seeking a new card to apply for, here are several notable mentions. 

Although the 5/24 Rule isn’t formally published, it is my hope that this blog provides clarity to the vague guidelines often discussed in the credit card community. What is your 5/24 Score? Do you have a game plan to continue acquiring credit cards? 

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