Chase 5/24 And How to Check Your Status

You’ve probably heard people say ridiculous things like: “Travel hacking is easy, everybody should do it!” Or “Travel is free, just use points and miles!”

I hate to break it to you, but these are all myths. Travel hacking is not easy. Points and miles do not make travel free. And while anybody can travel hack, not everybody should do it.

The harsh reality is that nothing in life is easy. And there is no such thing as a free lunch.

Being a good travel hacker takes a lot of work. You often need to do a lot of research. You likely will need to spend a lot of money (again, nothing is free). And in order to join the club (while not getting burned), you have to follow the rules.

One of the most important rules in the game is the Chase 5/24 rule.

But before we talk about some of the rules, let’s discuss why they were implemented in the first place.

 

The Good Old Days

Seasoned travel hackers often reminisce the glory days of the points and miles game. Back then, there were so many creative ways to earn millions of points and miles.

For instance, there was a time when the US Mint sold dollar coins online at face value, with free shipping, and allowed customers to pay with credit cards at no additional fee.  It was a promotion by the US government to put more of these dollar coins into circulation. People bought these coins in huge quantities (one person reportedly bought $696,000 worth), paid with rewards earning credit cards, deposited the coins at local banks, and then used the money to pay their credit card bills. Net cost: ZERO. Net gain: hundreds of thousands of points/miles. After realizing that people were taking advantage of this, the US Mint shut it down.

Churning

One of the most common ways in which people earned a lot of points is through earning credit card sign up bonus more than once. This is referred to as “credit card churning”.

In the past, you could apply for a bunch of credit cards, buy a bunch of stuff to meet the minimum spend requirement, earn the sign up bonus, find a way to make money (like selling their purchased stuff on eBay of any other kind of manufactured spend techniques), then use that money to pay off the credit card balances in full. Shortly after, you would be able to cancel all of those credit cards then apply again for the same cards to earn the sign up bonuses again and again. Many people earned millions of “free” points this way. Rinse and Repeat. Easy peasy.

Eventually, the banks and card issuers caught on. To curb such behavior, banks started implementing rules to limit the number of cards or sign up bonuses that people can receive. For American Express, it’s the “once in a life time rule”. For Chase, it’s the 5/24 rule.

Because there are so many great Chase credit cards and because Chase Ultimate Rewards are the most valuable flexible points out there (in my opinion), I’m going to concentrate our discussion on Chase.

 

What is the Chase 5/24 Rule?

Simply put, you will not be approved for any Chase credit card subject to the 5/24 rule if you have opened five or more personal credit cards in the past 24 months.

 

What Counts Toward Your Chase 5/24 Status?

• Personal credit cards opened with ANY bank (even if they are now closed)
• Personal charge cards
• Business credit cards opened with Discover, Capital One, and TD Bank. (However, business cards opened with Chase, American Express, and Citi do not show up on your credit report and therefore do not count toward 5/24)
• Authorized user cards

For instance, if you’ve opened a personal credit card with Chase, another with Citi, a charge card like the American Express Platinum card, a business card with Capital One, and you’ve become an authorized user on your spouses credit card in the past 24 months… that’s 5 accounts on your personal credit report. Thus, in this case you will not be approved for a Chase card that is affected by this 5/24 rule.

It is important to note that auto loans, student loans, and mortgages are accounts that do not count toward Chase 5/24.

 

Which Cards are Affected by the Chase 5/24 Rule?

As of 11/2018, ALL Chase cards are subjected by the 5/24 rule. These include some great cards such as:

• Chase Sapphire Reserve
• Chase Sapphire Preferred
• Ink Business Preferred**
• Ink Business Cash
• Chase Freedom
• Chase Freedom Unlimited
• Ink Business Unlimited
• All versions of the Southwest Rapid Rewards Card (Plus, Premier, Premier Business)
• All versions of the United Mileage Plus Card (Club, Club Business, Explorer, Explorer Business)
• All versions of the Marriott Rewards card
• British Airways Visa Signature card
• Chase Hyatt card
• IHG Rewards Club Premier card**
• Ritz-Carlton Rewards card

Therefore, you will not be approved of any of the above cards if your status is over the 5/24 rule.

[11/14/2018 Edit: It appears that the Chase “5/24 rule” has started to expand to ALL Chase credit cards since 11/13/2018. Multiple people report being denied for “too many inquiries”. This can be separate from the “5/24 rule”. So far, data points on sites like FlyerTalk and Doctor of Credit are being collected to see if Chase has definitely expanded the “5/24 rule” to its entire credit card portfolio.]

**These are referral links to the best offers available for these cards. I will receive a referral bonus if you apply and are approved for these cards.

 

How Can You Check Your Chase 5/24 Status?

If you’re thinking about applying for a Chase card that is affected by the 5/24 rule (such as the Chase Sapphire Reserve), then you better know what your 5/24 status is. Wouldn’t it be a shame if you applied for the card and was subsequently denied because you opened too many cards in the past 24 months? This would result in a hard credit inquiry, a drop in your credit score by five to ten points, and no credit card sign up bonus points to show for it. That would suck.

There are several ways to check your 5/24 status, but the easiest way is through Credit Karma. If you don’t have an account, you can easily set one up in a few minutes. It gives you free access to your TransUnion and Equifax credit reports with full details about the accounts that show up on your report.

After setting up your account, here’s the steps to follow:

1. Log in to your account
2. Click on this link to access the old interface that shows the full report of all your accounts
3. Click on accounts
4. Sort accounts by “open date”
5. Count the number of qualified accounts (which are the ones that count toward 5/24 status) in the past 25 months***

*** 25 months gives you some leeway. According to most data points, you will not be below 5/24 until the first day of the 25th month after your fifth account was opened. For example, if your fifth-most recent account was opened on July 4, 2016, do not apply for a new card until August 1, 2018.

 

Let’s Check Out My Chase 5/24 Status

By following the steps above, I come to the following page:

I’m Under 5/24!

If you count the qualified accounts that count toward 5/24, I only have 4 accounts opened in the past 24 months. These are:

1. Barclaycard AA Aviator MasterCard opened on June 2, 2017
2. Bank of America Alaska Airlines Visa card opened on May 28, 2017
3. American Express Hilton Honors Ascend card opened on April 9, 2017
4. Citi Hilton Reserve card (no longer available) opened on July 12, 2016

The next card on the list is a Citi Hilton signature card (also no longer available) that I opened on June 29, 2016. This means that I can expect to be approved for a Chase card that is affected by the 5/24 rule if I apply after July 1, 2018. And since today is July 20, that means I can apply for one. Yippee!

Other Interesting Things to Note

• I have 35 accounts. Yes, I know. It’s a lot. But I’ve been doing this for a while now. How else am I able to score free first class flights?
• The “CHASE AUTO” refers to the auto loan on my Tesla. Remember: auto loans DO NOT count toward your 5/24 status. Also glaring at you is the $48,426 loan balance. Yes, this is high and I admit that purchasing a Tesla can be considered a frugal fail. But at least the interest rate is low at 3.28% APR. I have the means to pay off the loan in full right now, but I am holding off for now since I expect a higher return with investments. Plus I love the car and in many ways it saves me money.
• I have no missed payments, zero collections, and zero public records. This is a big reason why I have such a stellar credit/FICO score.

 

Did I Really Only Sign Up For 4 Cards in the Past 24 Months?

If you read my previous post about my diversified portfolio of credit cards, you know that this can’t be true. The credit report by Credit Karma only shows half of the story. The truth is, I signed up for way more cards than 4 in the past 24 months. I actually signed up for 10!

In addition to the 4 cards listed in the credit report, I also signed up for the following:

1. American Express Business Hilton Honors opened on May 5, 2018
2. Citi Business AAdvantage Platinum Select opened on May 5, 2018
3. American Express Business Gold charge card opened on May 5, 2018
4. American Express Blue Business Plus opened on May 27, 2017 (this one is one of my favorites!)
5. Amex Blue for Business opened on January 31, 2017 (this one is no longer available)
6. American Express Platinum Business care card opened on November 17, 2016 (I earned 100k MR points as a sign up bonus and closed it before the $450 annual fee was due)

What do all of these cards have in common?

They are all business cards.

Remember: Citi, Chase, and American Express business cards DO NOT show up on your personal credit report and therefore DO NOT count toward your 5/24 status.

Other Potential Benefits of Business Cards

In addition to not counting toward 5/24 status, business cards have other potential benefits.

Because business cards generally do not show up on your personal credit report, you can keep your credit report very clean. You may not even see credit inquiries in your personal credit report when you apply for a business card. This is beneficial in minimizing the impact on your credit report.

Spending money on business cards instead of personal cards can actually improve your credit score. This is definitely true in my case. Because I put a majority of my spending on business cards, I rarely utilize my personal cards. If you recall, the most impactful factors that determine your credit score are your payment history (I pay in full on time, every time, and NEVER miss a payment) and your credit utilization.

Below is my Credit Karma dashboard. As you can see, it shows that I have 0% credit card use (extremely low credit utilization). Out of the $700,000 of available credit I have from 35 accounts, I use nada.

Applying for Business Cards

Many people shy away from applying for business cards because they feel intimidated. Don’t be. Yes, you do need to have a business to apply for a business card. But it is common for people to have a business without realizing it. If you sell things online (using eBay for example) then you have a business. If you freelance or blog, that can be your business. House hack or AirBnb? That’s your business. Other examples include Uber/Lyft, handyman services, selling your stuff on Etsy, starving artist, and author in the process of writing a personal finance book. Any side hustle qualifies, even if it doesn’t make much money. Pretty much anything can be a business. In many of these cases, your business will be considered a Sole Proprietorship.

The legal name of business can simply be your full name. Under Tax Identification Number, you can put your social security number. It’s fine to put “1” as the number of employees. And be truthful when indicating your annual business revenue and years in business. If your blog only makes $100, don’t put down that it makes $1,000,000. That would be fraud.

Below is a sample using the Chase Ink Business application. Obviously that is not my address or social security number.

 

My Current Credit Card Strategy

Ever since Chase implemented the 5/24 rule back in May 2016, I had to radically change my credit card strategy. Back then, I was so deep into the credit card points and miles game that I was way over 5/24. So when the Chase Sapphire Reserve (the hottest credit card at the time) was launched in August 2016, there was no way I would have been approved for it. I was over 5/24 and I was not a Chase Private Client (back then, being a private client was a way to get around the 5/24 rule). I missed out on a rewarding card and its 100,000 Ultimate Rewards sign up bonus. Oh well.

Since then, I tried to apply for only business cards from Citi and American Express in hopes of eventually getting under the 5/24. However, I did opportunistically apply for a few personal cards (such as the Amex Hilton Honors Ascend card) when there was an increased sign up bonus that was too compelling to pass up.

On July 1, I was finally under 5/24 and now able to sign up for a Chase card that is affected by the 5/24 rule. I was eyeing several Chase cards for quite some time!

Which Card to Choose…

I was debating between the Chase Ink Business Preferred versus the Chase Sapphire Reserve or Preferred (note: you can’t have both).

After much deliberation, I ended up going with the Chase Ink Business Preferred because it has a lucrative sign up bonus of 80,000 Ultimate Rewards points and a low annual fee of $95. On top of that, it has valuable bonus categories as it earns 3x points on travel, shipping purchases, internet, cable, phone services, and advertising purchases made with social media sites and search engines. It doesn’t have foreign transaction fees and it has great car rental coverage.

Yesterday I applied for the card. Lo and behold, I was approved!

Since it’s a business card, opening the Chase Ink Business Preferred will not impact my 5/24 status and will not impair my approval odds for Chase cards in the future.

So if the Chase Sapphire Reserve has another welcome bonus of 100,000 Ultimate Rewards points again, I’m jumping on that opportunity!

Take Away Points

• “Travel hacking” is not easy and certainly does not make travel free
• To play the points and miles game you have to know the rules. One of the most important rule is the Chase 5/24 Rule
• As part of the Chase 5/24 rule, you will not be approved for any Chase credit card subject to the 5/24 rule if you have opened five or more personal credit cards in the past 24 months
• Certain Chase cards are affected by the 5/24 rule, know which ones they are
• Certain cards and accounts count toward your 5/24 status. In general, business cards from Amex, Citi, and Chase do not count.
• You can check your 5/24 status using Credit Karma
• Anybody can sign up for a business card because everybody can potentially have a business