If you’re a skilled credit card user and juggle multiple rewards credit cards to take advantage of their benefits, you know how great Chase’ Ultimate Rewards program can be. Offering excellent cash back, bonus miles, and perks, Chase rewards are extremely valuable.
However, you have to be careful not to open too many accounts, or you risk being declined because of Chase’s 5/24 rule. While it’s not an officially published policy, the 5/24 rule is common knowledge among credit card experts, and it’s important to understand how it works so you don’t run into trouble.
What is the 5/24 rule?
In short, the rule is that you cannot open five or more personal credit cards across all issuers and companies in the last 24 months. If you do, your Chase credit card application will be denied. Worse, all of your Chase accounts could be closed. Even if the cards you applied for were offered by other companies, such as Wells Fargo or Capital One, they count against the 5/24 rule.
It’s important to know that Chase has never acknowledged the existence of the 5/24 rule or issued any statement or document concerning it. Its existence is based on customer testimonials and data points.
What cards fall under the 5/24 rule?
As of 2019, all Chase cards fall under the 5/24 rule. That includes co-branded cards, such as the Amazon Prime Rewards Signature Card and the Disney Visa Card. The 5/24 rule, while primarily involving personal credit cards, also is in effect for business cards, as well.
How to calculate your 5/24 rating
To find out what your 5/24 rating is, it’s important to look up a copy of your credit report. Once you have access to the credit report, review it for credit card applications made in the past 24 months. If you have four or more, you’ll have to wait several months before you can apply for a new credit card.
Chase will look at all credit card applications; they don’t take into account if you closed an account.
What it means for you
The 5/24 rule isn’t new, but if this is the first time you’re hearing about it, you’re probably wondering how it affects you. It simply means that you need to be strategic in your approach toward credit cards, rather than submitting many applications to get as many rewards cards as possible.
Before applying for a Chase card — or any credit card — review your credit report to make sure it doesn’t put you over the 5/24 limit. If it would, hold off on applying until time has passed and you have fewer cards opened within 24 months.
Other reasons for being denied
Of course, the 5/24 rule isn’t the only reason why Chase might deny you for a new credit card. The company looks at many different factors when evaluating your application, including:
- Debt-to-income ratio
- Credit score
- Number of opened accounts
You can improve your chances of being approved by improving your credit score and making all of your payments on time.
Applying for a new credit card
While the 5/24 rule might seem strict, there’s unfortunately no way around it. Chase carefully scrutinizes your accounts and applications to make sure you don’t exceed five opened accounts within 24 months. So before you open an account, make sure it fits your overall credit card strategy and try to pace credit card applications out to prevent being denied.
If you’re looking for a new credit card, check out our favorite rewards credit cards.
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