What Is the 5/24 Rule for Credit Cards?

The 5/24 rule is an unofficial yet widely recognized policy some credit card issuers use to evaluate new credit card applications. It helps manage risk and deter “churning,” where individuals repeatedly open credit card accounts primarily for sign-up bonuses. This rule acts as a common hurdle for those who frequently apply for new accounts. While not officially published by any issuer, its consistent application makes it a significant factor in credit card application strategies.

Understanding the 5/24 Rule Calculation

The 5/24 rule refers to a limit of five new personal credit card accounts opened within a 24-month period. This count includes cards from any bank, not just the one to whom the application is submitted. If an applicant has opened five or more new personal credit card accounts in the last 24 months, their application with an issuer applying this rule will likely be denied.

The rule counts accounts appearing on an applicant’s credit report, starting from the opening date. Even if a credit card account has since been closed, it still counts towards the 5/24 limit if opened within the 24-month period. Closing an account does not reset the 24-month timeframe for that specific card.

Authorized user accounts can sometimes count towards the 5/24 limit if reported on your credit report. If an authorized user account causes an applicant to exceed the limit, contacting the issuer’s reconsideration line may allow for its exclusion.

Conversely, several types of accounts generally do not count towards the 5/24 limit. Most business credit cards are typically excluded because they often do not report to an individual’s personal credit report. Other types of loans such as mortgages, auto loans, student loans, and personal loans do not factor into the 5/24 calculation. Credit inquiries also do not directly affect the 5/24 count, though a high number of inquiries might independently lead to a denial.

Credit Card Issuers Applying the Rule

The 5/24 rule is most widely associated with Chase Bank. While many credit card issuers have internal policies to manage risk, Chase is known for its strict adherence to the 5/24 rule for most of its credit card products. This unofficial policy has become a significant consideration for individuals interested in Chase credit cards.

The rationale behind such a rule is primarily to manage credit risk and prevent “credit card churning.” Churning involves individuals opening credit card accounts solely to earn sign-up bonuses and then closing them, which can be costly for banks. By limiting new accounts, issuers aim to attract customers who intend to use their cards for longer periods, generating revenue through interchange fees or interest.

This policy helps issuers target a specific customer profile, typically those less likely to engage in rapid account openings and closures. Other banks like American Express, Bank of America, Capital One, and Citi have their own distinct application rules regarding new accounts. However, the 5/24 rule remains a particular characteristic of Chase’s approval process.

Impact on New Credit Card Applications

Exceeding the 5/24 limit has a direct and substantial impact on new credit card applications with enforcing issuers. If an applicant has opened five or more new personal credit card accounts in the last 24 months, their application will almost certainly be denied, regardless of their credit score, income, or existing relationship with the bank. This denial is typically automatic, making it a firm barrier to approval.

This rule particularly affects access to popular credit cards offered by the primary issuer, especially those known for valuable sign-up bonuses or travel rewards programs. Many of Chase’s highly sought-after personal credit cards, including Sapphire, Freedom, and co-branded travel cards, are subject to this limitation. Individuals aiming to acquire these specific cards must strategically manage their new account openings across all banks.

The 5/24 rule does not universally apply to all credit card issuers. An applicant exceeding this limit may still be approved for credit cards from other banks that do not utilize the 5/24 policy. However, ignoring the rule when applying for cards from an enforcing issuer will likely result in an automatic denial, making careful planning a significant factor in successful credit card acquisition.