The 5/24 Credit Card Rule Explained – A Detailed Guide of What It Is

The 5/24 rule is an unofficial credit card approval policy implemented by Chase. It states that you’re less likely to be approved for a new Chase credit card, particularly some of their most desirable ones, if you’ve opened five or more credit cards in the past 24 months. This applies to all personal credit cards you hold, regardless of the issuing bank.

Here’s a breakdown of the rule:

• Applies to Chase cards: This rule specifically impacts applications for Chase credit cards.
• Counts all new cards in 24 months: Any personal credit card you opened in the last 24 months counts towards the limit, even if it’s from a different bank.
• Approval threshold: You should ideally have fewer than four new credit card approvals in the past 24 months to ensure a higher chance of getting approved by Chase.

Chase typically applies the 5/24 rule strictly when considering applications for their Chase Ultimate Reward® credit cards, such as the Chase Sapphire Preferred® Card, Chase Sapphire Reserve®, and certain co-branded cards like the Chase Freedom Flex® and Chase Freedom Unlimited®.

If you fall under the 5/24 rule, it means that even if you have a good credit score and meet other eligibility criteria, Chase is likely to deny your application for one of their cards subject to this rule.

It’s essential to note that the 5/24 rule is not an official policy disclosed by Chase but rather observed by many applicants based on their experiences and reports from others. So, while it’s a useful guideline, there may be exceptions, and individual circumstances can vary.

It’s important to note that:

• Business cards: Business credit cards typically don’t count towards your 5/24 score, unless they report to your personal credit report.
• Not a hard rule: While Chase heavily considers this factor, it’s not an absolute rule. Other factors like your credit score and credit history also play a role in the approval decision.

Do other credit card issuers use the 5/24 rule?

The 5/24 rule is primarily associated with Chase, and it’s not commonly known to be used by other credit card issuers. Other credit card issuers including Citibank and Wells Fargo may have their own approval criteria and eligibility requirements, which can include factors such as credit score, income, credit history, and debt-to-income ratio.

The 5/24 rule is specific to Chase’s credit card approval process. Other credit card issuers like Capital One, US Bank and American Express have their own criteria for evaluating applicants. These criteria may involve factors like:

• Credit score: This is a major factor for most issuers. A higher credit score generally indicates a lower risk of delinquency and makes you a more attractive applicant.
• Income: Issuers want to ensure you have sufficient income to comfortably meet your credit card obligations.
• Credit history: Your history of managing credit responsibly, including factors like payment history and credit utilization ratio, is crucial.
• Debt-to-income ratio: This ratio compares your total debt to your income and reflects your ability to handle additional credit.

While other issuers might consider the number of recent credit card applications, they generally don’t follow a strict rule like the 5/24 rule. They might employ a more nuanced approach that considers the overall creditworthiness of the applicant.