Which Bank Implements the 5/24 Rule?
Uncover how banks assess credit card applications, including a key rule on new accounts and its impact on your eligibility.
Credit card issuers evaluate applications to assess an applicant’s financial behavior and potential risk. This helps banks determine creditworthiness and manage their portfolio risk. They consider factors like credit history, existing debt levels, and recent credit inquiries.
Understanding the 5/24 Rule
The “5/24 rule” is an unofficial guideline used by a prominent credit card issuer to manage new account approvals. This rule indicates that if an applicant has opened five or more new personal credit card accounts across all banks within the past 24 months, their application for a credit card from this specific issuer will likely be denied. The “5” refers to the number of new accounts, and “24” signifies the 24-month period. This policy aims to discourage individuals who frequently open new credit cards primarily to receive sign-up bonuses, a practice sometimes referred to as “churning.”
The Bank Associated with 5/24
Chase Bank is the institution most widely recognized for implementing the 5/24 rule. While not officially published by Chase, its existence has been widely observed and confirmed by applicant experiences since 2015. This unofficial policy means that even applicants with excellent credit scores, strong incomes, and low debt levels may still be denied a new Chase credit card if they exceed the 5/24 threshold. The rule applies to nearly all personal and business credit cards offered by Chase.
Counting New Accounts
When applying the 5/24 rule, most new personal credit card accounts opened within the last 24 months count towards the limit, regardless of the issuing bank. This includes credit cards from any issuer, such as American Express, Capital One, or Citi, as long as they appear on your personal credit report. Even if an account has been closed since it was opened, it still contributes to the 5/24 count if it was opened within the 24-month timeframe. Certain business credit cards, specifically those from Capital One, Discover, and TD Bank, may also count if they are reported to your personal credit report.
Authorized user accounts can sometimes count towards the 5/24 limit if they are reported on your credit report. However, there may be options to request their exclusion from consideration, potentially by contacting the issuing bank or the credit bureaus. Accounts that generally do not count include denied applications, as these do not result in a new account being opened. Most business credit cards do not count towards the 5/24 limit because they typically do not appear on an individual’s personal credit report. Furthermore, loans such as auto loans, mortgages, or student loans are also not factored into the 5/24 calculation.
To determine your current 5/24 status, review your credit reports. Consumers are entitled to at least one free copy of their full credit report from each of the three major credit bureaus—Experian, Equifax, and TransUnion—every 12 months via AnnualCreditReport.com. Some credit monitoring services, including free options like Experian’s app, allow you to view your accounts and sort them by the date opened, making it easier to identify accounts within the 24-month window.
Application Restrictions at Other Banks
While the 5/24 rule is primarily associated with Chase, other major credit card issuers implement their own distinct application policies and restrictions. These rules are designed to manage risk and prevent excessive credit acquisition or repeated welcome bonus collection.
For instance, American Express has a “once-per-lifetime” rule for welcome offers on many cards, and limits approvals to one every five days and no more than two within 90 days. Citi restricts applications to one personal card every eight days and no more than two personal cards within a 65-day period, also having a 48-month rule for certain welcome bonuses.
Bank of America uses rules like the 2/3/4 rule (two new cards in two months, three in 12 months, four in 24 months), with 3/12 or 7/12 rules possibly applying based on banking relationships. Capital One generally limits approvals to one credit card every six months for both personal and business cards. These varied policies underscore that while the 5/24 rule is specific to one issuer, a range of unique application criteria exists across the credit card industry.