The 5/24 rule is a strict criterion primarily enforced by Chase, a major credit card issuer, which dictates eligibility for most of its credit card products. Specifically, if you have opened five or more personal credit card accounts from any card issuer within the past 24 months, you will likely be denied for a new Chase credit card.
Understanding the 5/24 Rule
This rule is a significant hurdle for individuals looking to apply for new credit cards, especially those popular for their rewards and benefits. While many card issuers have their own criteria for new account approvals, Chase is known for being particularly stringent with its 5/24 policy.
How It Works
The name "5/24" directly refers to its core components:
- 5: Represents the maximum number of new personal credit card accounts you can have opened.
- 24: Refers to the look-back period in months.
If your credit report shows five or more newly opened personal credit card accounts within the last 24 months, your application for most Chase credit cards will automatically be declined, regardless of your credit score, income, or other financial standing.
Why Does It Exist?
The 5/24 rule is generally believed to be Chase's way of targeting individuals who are genuinely interested in building a long-term relationship with their cards rather than those who might be applying solely to "churn" sign-up bonuses. It helps them manage risk and ensures that new cardholders are not opening too many lines of credit too quickly.
What Counts Towards 5/24?
Understanding which accounts count towards your 5/24 status is crucial for strategic credit card applications.
| Counts Towards 5/24 | Does NOT Count Towards 5/24 |
|---|---|
| Most personal credit cards from any issuer. | Business credit cards (typically, unless they report to your personal credit). |
| Being added as an authorized user on someone else's card (though often reversible). | Store charge cards that can only be used at one retailer (e.g., store-branded financing). |
| Retail credit cards (e.g., department store cards). | Loans (auto, mortgage, personal loans). |
| Co-branded personal credit cards (e.g., airline, hotel cards). | Debit cards or checking/savings accounts. |
| Previously closed accounts (if opened within 24 months). | Product changes/upgrades to existing cards. |
Note: While authorized user accounts generally count, you can often call Chase's reconsideration line and explain that you are just an authorized user, which may lead to that account being manually removed from your 5/24 count.
Checking Your 5/24 Status
To determine your current 5/24 status, you need to review your personal credit report. You can obtain a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, TransUnion) annually through AnnualCreditReport.com.
- Review Your Report: Carefully examine the "accounts" section of your credit report.
- Identify Opened Dates: Look for the "date opened" for each personal credit card account.
- Count Accounts: Count how many personal credit card accounts have an "opened date" within the last 24 months.
Strategies to Navigate the 5/24 Rule
If you're interested in applying for a Chase card, here are some strategies to consider:
- Prioritize Chase Cards: If you are below 5/24, consider applying for desirable Chase cards first, especially premium travel cards or cashback cards that fit your spending habits.
- Focus on Business Cards: Most business credit cards do not count towards your personal 5/24 status, even if you are a sole proprietor. This can be a way to acquire new cards without impacting your eligibility for Chase personal cards.
- Wait It Out: If you are over 5/24, the simplest solution is to wait until enough time has passed for some of your newer accounts to fall outside the 24-month window.
- Authorized User Removal: If an authorized user account is pushing you over the limit, try calling Chase's reconsideration line after applying to explain the situation and request its exclusion from your count.
Understanding the 5/24 rule is essential for anyone strategically managing their credit card applications, particularly for those aiming for Chase's popular card offerings.
