5/24 Rule

The 5/24 Rule is an unwritten, informal policy from the credit card issuer Chase Bank that affects who gets approved for their popular rewards cards. In simple terms, Chase will almost certainly deny your application for most of their credit cards if you have opened five or more new personal credit card accounts in the last 24 months. This rule isn't just about Chase cards; it counts new accounts from any bank. For financially savvy individuals, this rule is a crucial piece of the puzzle, especially for those who practice “travel hacking” or “credit card churning”—the art of using credit card rewards like cash back or travel miles to generate value from everyday spending. While not a traditional investment principle, understanding and navigating the 5/24 Rule is a cornerstone of smart personal finance, which provides the stable foundation every successful investor needs.

At its core, the 5/24 Rule is a business decision by Chase to filter for the kind of customers it wants: profitable, long-term clients. From the bank's perspective, someone opening many new credit cards in a short period might be a “gamer” who is only interested in the initial sign-up bonus before closing the card, or worse, someone in financial distress who is desperately seeking credit. Both types of customers are less profitable and higher risk than someone who opens a card and uses it consistently for years. By setting this limit, Chase aims to attract customers who are more likely to build a lasting relationship with the bank. It’s a simple but effective filter to weed out high-risk or low-profitability applicants, ensuring their marketing efforts are spent on acquiring what they see as higher-quality customers.

For many investors, optimizing personal finances is just as important as optimizing a stock portfolio. Credit card rewards can be seen as a small, risk-free yield on your daily expenses. A massive sign-up bonus can be worth hundreds or even thousands of dollars in cash or travel, representing a significant return. The 5/24 Rule directly impacts your ability to maximize these returns.

This rule forces you to think like a strategist. Since your new account “slots” are a limited resource, you must plan your applications carefully. If a premium Chase card like the Sapphire Reserve or Sapphire Preferred is part of your financial plan, you should prioritize applying for it before you reach the five-card limit.

Understanding the fine print is essential. Here’s a general guide to what is typically included in your 5/24 count:

• Personal Credit Cards: Almost every personal credit card from any U.S. bank that appears on your personal credit report will count.
• Authorized Users: If you are added as an authorized user to someone else’s account, that card often appears on your credit report and will likely count. However, this can sometimes be disputed and removed by calling Chase's reconsideration line.

Here's where the strategy gets interesting. Certain cards and loans are often excluded:

• Most Business Cards: The most important loophole! Most business credit cards (including those from Chase, American Express, and Bank of America) do not appear on your personal credit report, and therefore do not add to your 5/24 count. This allows you to continue earning new bonuses without using up a valuable slot.
• Other Loans: Financial products like a mortgage, auto loan, or student loan do not count as they are not revolving credit card accounts.

The 5/24 Rule is a perfect lesson in scarcity and resource allocation, concepts any value investing enthusiast can appreciate. Think of your five “slots” over a 24-month period as valuable, non-renewable assets. Wasting one on a mediocre card offer is like buying an overpriced, low-quality stock. Managing your credit score and credit strategy is a fundamental part of financial health. A strong credit history can unlock lower interest rates on investment property loans, freeing up capital and boosting your returns. The 5/24 Rule reminds us that smart financial management extends beyond the stock market. It’s about optimizing every tool at your disposal—including the plastic in your wallet—to build wealth methodically and intelligently. Plan ahead, use your slots wisely, and make every application count.