Chase Credit Card Churning – Living with the New Reality (5/24 Rule)

[Some of this information might be outdated. Check out our updated post on 5/24 here.]

Background

We’ve discussed the fact that many people are reporting having problems being approved for new Chase credit cards. Most reports that I’ve seen indicate that it’s real and it’s bad. 

Chase seems to have severely changed their approval criteria. Specifically, if they see too many new accounts on your credit report they won’t approve you for a new card. This is even if the new accounts are non-Chase accounts. They always mention a 2-year time frame; if there were too many new cards opened within the past 2 years it’s much harder to be approved.

Basically, they’re looking at your credit report to see if you’re a churner. If you are, they’ll deny you no matter how good your credit is. And even for a basic card like the Freedom.

Typically, Chase is very good about approving a card by shifting credit from another card. For our issue here this doesn’t work.

Note that there are a few success stories in getting the cards despite having many new accounts, implying that it’s not a hard rule.

5/24

How many new accounts is too many?

Many mention the magic number of five. Having five or more new accounts will trigger denial. This number is mentioned in the Flyertalk wiki as well, and is now known as “the 5/24 rule.”

Chase Co-Branded Cards & Business Cards

Chase is only targeting Ultimate Rewards-earning cards like the Sapphire and Freedom. Business cards like INK are not included, although there is some spill-over effect there. And co-branded cards from hotels and airlines (like Southwest and United) are not included either.

Apparently the UR cards cost them more and they want to stop churners from causing them such losses. These cards are also the low-hanging fruit since it’s so easy for someone to cash out on the rewards and these cards were thus ‘abused’ more than the others.

Update: Business cards (i.e. INK) will have the 5/24 rule starting around March 2016, and Co-brands will have the 5/24 rule starting around April 2016. See also Is 5/24 In-Effect Yet on INK and Co-brands?.

Do Authorized User Cards Count toward 5/24?

When someone adds an authorized user (AU) on their credit card, the card shows up on the credit report and does affect the AUs credit score, See How Does Being An Authorized User Affect Your Credit? The account will usually pull up even when the AU was added without having given in their Social Security Number.

It appears that (somewhat illogically) even AU cards are included in the new Chase rule and having new AU accounts will deter you from being approved for new Chase cards. (This based on a Reddit data point.)

This is terrible news for someone who likes to add AU cards  on their Amex accounts in order to maximize Amex Offer promotions. Some Chase cards need an AU added to maximize the bonus as well. It’s possible that using a nickname could save the card from hitting the credit report. Also, an AU from a different address than your own may keep it off the report as well. (These suggestions are just of the top of my head.)

Since a lot is dependent on the Chase rep to decide, some reps may be smarter and not include AU cards into the equation of new accounts. There is one report of someone who was able to convince the rep not to count AU cards in the calculation.

Do Business Cards Count toward 5/24?

Do business credit cards count toward the 5/24 rule? Many card issuers don’t report business cards on the credit report and the only clue is the hard inquiry.

With regards to the new Chase rules, it seems that the main issue is the new accounts, not the inquiries on the report. As noted, AU cards do count despite the fact that there’s no inquiry on the credit report. As such, business cards can likely go undetected on that end and won’t count toward the max-account limit.

Note, however, that Chase business cards would probably count. Since they’re issued by Chase themselves, they’ll obviously know about it and they may count it toward the account-max.

Account Closures

Here’s another data point: A friend of mine has 3 INKs and applied for 2 more. Not only did they deny his applications, the reconsideration rep forced him to close two of his three existing cards.

I’ll repeat that: the rep denied his applications and forced him to close 2 of his existing cards.

Ultimately, he was able to call back and get one of the closed accounts reinstated. We wish him luck on getting the other one reinstated as well.

This case is likely an anomaly; still it could have us thinking twice before calling up and trying to convince Chase that we are worthy of another card. It may be better to lay low and keep what we have.

Summary

  • 5 or more new cards can trigger denial (occasionally even less can be problematic)
  • Even non-Chase cards count to this number
  • AU cards should not count toward the 5-card limit, but the reps often do count them unless you specifically ask them not to
  • Reps seem to have the power to approve you with more than five, but that usually doesn’t happen
  • Shifting credit lines doesn’t help
  • Co-branded cards are unaffected
  • Business cards (INK) are unaffected
  • Business cards shouldn’t count toward the 5-card max, but Chase business card may count

Final Thoughts

All-in-all, the news with Chase is terrible and it really changes the way we approach applying and keeping Chase credit cards, see Thoughts on Keeping the Chase Sapphire Card. The important thing for most of us is to keep at least one premium Chase product open so that it will be possible to use the points for travel redemptions. The Freedom and INK Cash cards can’t be used for for travel redemptions unless you have a premium product like the Sapphire Preferred or INK Plus. Paying the annual fee on the Sapphire is starting to make a whole lot of sense in many cases, unless you have an INK Plus to use for travel transfers.

So which route do we go? Limit our new accounts or keep churning and just avoid Sapphire and INK?

Being that there are so many credit cards out there to choose from, including many co-branded Chase cards, keeping up the churning would seem wiser. These cards are, however, from the best available and it’s definitely a big hit to the hobby.

Notes

Two important notes:

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hameshatumkochaha
hameshatumkochaha

Hi,
Need some help. I think I am 3 for 5/24 rule. So, I applied for a Chase Unlimited card. I already have an active Chase Ink Cash which I downgraded from the $95 Ink Preferred CC a few months ago. The article above was a little unclear to me about Chase Business Ink applications counting… I assumed that the worse case that Chase will count the application against me in the rule. My score is ~810+.
A: Online message after application said, “We need to review your application a little longer. We will contact you in 7-10 business days”.
B: An hour later, I got an email “We have received your request for a Chase credit card. We’ll let you know our decision by U.S. mail. This could take up to 30 days.”
I feel that both B was autogenerated as certainly was A.
Questions: Based on your experience(s),
1. Per the article, I was planning on not calling Chase. Should that still be my plan?
2. Should I expect information requests from them to submit my EIN letter etc?
3. If they’re blacklisting me for being at 5/24 (certainly I have not reached 6), is there a way to appeal / reconsideration? Is there a way to pull back the application? I will drop by 1 application in Dec 2020…
Please let me know your comments.
Thanks

hameshatumkochaha
hameshatumkochaha

How long does this take to get this letter? It says 30 days but I am hoping that it would be faster. It has been more than a week and no letter yet. I am still stopping myself from calling… Inputs are welcome. Thanks!

hameshatumkochaha
hameshatumkochaha

Applied Sep 28, Got a letter on Oct 14th which was supposedly mailed on Oct 5; basically asking me to submit the IRS document for ITIN and address etc. Faxed on Oct 15th and got an email on Oct 19th saying in 30 days response to my application will be provided. This is S L O W… I am ready to apply for my next CC (non-Chase) as it has an offer expiring on Nov 2. I have expenses held back since I want the Chase to approve my business application first…

hameshatumkochaha
hameshatumkochaha

Got an approval email today! Looking forward to the card…

Richard Hart
Richard Hart

I have a Chase Savings account and a Chase Checking account which pays a total of $600.00 bonus, $300.00 checking bonus and $200.00 savings bonus plus $100.00 having both. I had $725.00 in checking and $15,025.00 savings. They payed the $300.00 checking bonus with direct deposit, waiting for the remaining $300.00 once the time period is completed. Applied for a Chase Freedom credit card and was approved. Received the card in the mail and had a $200.00 bonus for spending $500.00 in 60 days. Spent $656.00 to meet the spending amount to collect the $200.00 bonus. After meeting the bonus deal they closed my credit card account due to my credit report! Guess they checked it to approve the card in the first place, but they don’t want to pay me the $200.00 bonus!!!! Sneaky aren’t they! Will see if they pay the remaining $300.00 bonus after the 90 day period.

Platypus
Platypus

This page should point to the new, more detailed 5/24 page: https://www.doctorofcredit.com/chase-524-rule-explained-detail-need-know/

Paul
Paul

Well add me to the list. Called recon last evening regarding pending status on CSP and was told 10 cards in last year even though other items are fine. Interesting though in my discussion with rep. I asked him how is someone to go about changing their cards from the lower level reward cards to the better cards? For example, i was told I have too many open accounts, but if you close accounts, age of accounts goes down which hurts your score. Sometimes a catch 22

Cindi
Cindi

888-245-0625 Is this the number you called? I didn’t get one in my cryptic email from them. I called this once because I usually have issues with my address, but they said that wasn’t it, it just hadn’t been processed yet. Then I saw other posts that said not to call the reconsideration line. Not sure if I should or not.

Flyer
Flyer

Great post! It looks like the rule also applies for co-branded cards like United Mileage Explorer. I applied for United Mileage Explorer and stayed in pending status for a week. I called the reconsideration line and got it approved after lowering some credit from my Chase Sapphire card.

Cindi
Cindi

Anybody have a phone number to apply for a Chase card over the phone?

I just 2 days ago applied for the Marriott card, figured I’d get in before the bonus expired and the 24/7 hit me. I have applied for several cards recently but not to churn but because I am flying a lot more than I did before so I wanted all the major airplane cards for free bags. I’ve also been figuring out a strategy about where to put my spend, on 2% cash back cards vs airline miles, etc.

Anyway, the very next day, the Chase Freedom Unlimited was introduced, and that is exactly the card I want to put the majority of my spend on. But I suspect they will deny me. I am hoping that if I call and offer to get rid of a different Chase card, and forgo my Freedom Unlimited signup bonus, they will switch cards for me.

Debbra

Hello, all is going well here and ofcourse every one is sharing data, that’s really excellent,
keep up writing.

Paul
Paul

What if I cancelled a card that I applied for a year ago? Would Chase count that in the 5 card limit?

Henri123
Henri123

I just applied the hyatt credit card with $50 statement and got pending with a reference number. And I called in and the rep just verified my basic information as address, mother’s maiden number and approved me with $5000 credit line. I have around 15 inquiries within the last year. I am pretty happy with that. As I assume that if chase increase the sign-up bonus with the co-branded card, it might be relatively easier to get approval.