Does the Chase 5/24 Rule Apply to Business Cards?
Understand Chase's 5/24 rule for business credit cards. Learn how it affects your application eligibility and personal card count.
The Chase 5/24 rule is an internal guideline that restricts approvals for new Chase credit cards. It limits eligibility based on the number of new credit accounts opened across all financial institutions within a specific timeframe. Understanding this rule is important for anyone applying for credit cards, including business options, as it impacts application strategies.
Understanding the Chase 5/24 Rule
The Chase 5/24 rule is an internal guideline where Chase declines applications for most credit cards if an applicant has opened five or more new personal credit accounts across any bank in the last 24 months. This count includes accounts from all card issuers, and both open and closed accounts on your personal credit report. While not officially published, its consistent application is widely observed.
New personal credit card accounts from any issuer, such as American Express, Capital One, Citi, Discover, Bank of America, and Wells Fargo, count towards this 5/24 limit. This includes accounts opened within the 24-month window, even if since closed. Authorized user accounts can also sometimes count if they appear on personal credit reports, though they may be disregarded by contacting Chase’s reconsideration line.
Conversely, certain accounts do not count towards the 5/24 limit. These include loans like mortgages, auto loans, and student loans, as they are not revolving credit card accounts. Most business credit cards are also excluded, particularly those that do not report to personal credit bureaus. This distinction is due to the separate nature of business credit reporting versus personal credit reporting. However, some business cards from issuers like Discover, TD Bank, and certain Capital One cards do report to personal credit bureaus and count towards 5/24.
Applying the 5/24 Rule to Chase Business Cards
Applying the 5/24 rule to Chase business cards involves two considerations: whether a Chase business card adds to your 5/24 count, and whether you need to be under 5/24 for approval. These aspects operate differently.
In most cases, a new Chase business credit card approval does not contribute to your personal 5/24 count. This is because Chase business cards do not report regular account activity to personal credit bureaus like Experian, Equifax, or TransUnion. Instead, their activity is reported to commercial credit bureaus, such as Dun & Bradstreet, Equifax Business, and Experian Business. This separation means opening a Chase business card does not add an inquiry or new account to your personal credit report that counts against the 5/24 limit. For instance, if you are at 4/24 and are approved for a Chase Ink Business card, you remain at 4/24.
While Chase business cards do not add to your 5/24 count, applicants are still subject to the 5/24 rule for approval. To be approved for a Chase business card, you need to have opened fewer than five personal credit card accounts in the last 24 months across all banks. If you are at or above the 5/24 threshold, your application will likely be denied. Chase conducts a hard inquiry on your personal credit report when you apply, assessing creditworthiness and potentially impacting your score.
An exception to the non-reporting rule for business cards occurs if an account becomes seriously delinquent or defaults. In these instances, Chase may report negative information to your personal credit report, despite the general policy. This is due to the personal guarantee required for most business credit cards, where the individual is personally responsible for the debt. Therefore, maintaining timely payments on business cards protects personal credit.
Strategic Considerations for Chase Business Card Applications
Understanding your current 5/24 status is a foundational step before applying for any new credit card, especially from Chase. You can determine your 5/24 count by reviewing your credit reports from Experian, Equifax, and TransUnion. These reports list all credit accounts opened under your name, including their opening dates. Manually counting accounts opened within 24 months, including closed accounts, provides an accurate assessment.
A strategic application order can help maximize approvals for desirable credit cards. For individuals interested in Chase cards, it is recommended to prioritize applying for Chase personal cards while still under the 5/24 limit. This approach ensures access to Chase’s personal card offerings, which are subject to the rule. Once personal Chase cards are acquired or you are approaching the 5/24 limit, consider applying for Chase business cards.
Since most Chase business cards do not add to your 5/24 count but require you to be under the limit for approval, applying for them strategically can preserve your “slots” for future personal cards from other issuers. After securing desired Chase personal and business cards, you can explore personal credit cards from other banks, as their approvals are not affected by the Chase 5/24 rule. This approach helps ensure access to a wide range of credit products.