I discuss reasons why people may consider not waiting to be under Chase’s infamous 5/24 rule.
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You’re listening to the Hurdy Gurdy Travel Podcast. I’m your host, Justin Vacula, here to help you travel the world at next to no cost through credit card points, miles, benefits, and rewards. Make money, save money, and take advantage of great deals!
Visit my website at HurdyGurdyTravel.com to contact me, find me on social media, read episode transcripts, and support the show with donations and use of referral links! More information at the end of the show…
Thanks for joining me for episode 35 – Chase 5/24 rule – How long to wait? I discuss reasons why people may consider not waiting to be under 5/24.
Those new to credit card and travel rewards spaces will likely hear about Chase’s infamous 5/24 rule. Long story short, with rare exceptions, you will be denied for business and personal Chase credit cards if you have opened five or more credit cards in the past 24 months which show on your personal credit report. Most business cards do not impact 5/24, but Capital One, TD Bank, and UBS will add to your 5/24 count.
Since Chase cards provide a great deal of value for many, even those who may travel only a handful of times per year, I often highly recommend tailoring a credit card strategy to prioritize Chase so that you don’t miss great value. I encourage listeners to consider long-term strategy often saying that you can get many credit cards at a later time, but once you are past 5/24, there’s likely no turning back because waiting many many months brings about significant opportunity costs. Embrace what many call the lol/24 status. One may be able to continue acquiring valuable business cards instead of getting no new personal cards while on their 5/24 quest, but when running out of new business cards, the wait may not be worth it.
Worse yet, in recent months, Chase Ink business cards have been more difficult to obtain according to numerous datapoints across several groups and websites. People are getting denial reasons, even if they already have business credit cards with Chase, stating things like ‘insufficient business structure’ or ‘lack of business tradelines’ especially when applying as sole proprietor. Other denial reasons point to lack of business checking relationship with Chase or at least lack of funds with some speculating that low average checking balances were insufficient.
While I really like the Chase Sapphire Preferred and World of Hyatt cards, the three Ink cards are likely to provide more value for most and were a main part of the, shall we say, 5/24 argument. If one is just starting in the credit space, perhaps at 2/24, the argument for getting cards like World of Hyatt and Chase Sapphire Preferred should be obvious assuming at least some Hyatt stays, but past that, there isn’t a very high amount of value absent Ink cards. Chase Freedom may provide great value, but likely only for those maximizing spend on the quarterly categories, and one can downgrade Chase Sapphire Preferred after a year to get the Freedom card without spending another 5/24 slot, waiting two or three months between Chase applications, and taking a hard inquiry.
What, though, about those over 5/24? What’s your breaking point? With six to twelve months remaining, perhaps one can justifiably wait even without the Ink cards depending on which business cards they can likely get and value including the Barclay’s Aviator and Jet Blue Business cards; Citi AA business; various Amex business credit and charge cards; Bank of America business cards; US Bank business cards, and Wells Fargo business cards.
However, Barclay’s may deny you if you are over 6/24. Bank of America, like Chase, is getting tighter on business card approval although they sometimes allow one to open a 13-month certificate of deposit to secure a business card. Wells Fargo only allows one business card per 15 months and you may have to have a business checking account and forms from your state showing you have a business – rules across branches and states vary. US Bank is the strictest here not only because they are inquiry sensitive as I’ve discussed in episodes 33 and 17, but also because they are looking for older EINs and reporting tradelines. Your mileage may vary.
American Express is great here, perhaps the best business card issuer, because you can have four total credit cards (down from five, business and personal combined) and up to ten charge cards. After your first Amex card, new Amex cards will likely be soft pulls which will allow you to get more cards not only with Amex, but also with other issuers. Amex is usually very lenient, but recent datapoints of recent applications from listeners of this show point to many many declines for those brand new to American Express likely because of the current pandemic.
6-12 months may be worth the wait for even two or three Chase personal cards if one can get multiple business cards, but even then there are more arguments for not waiting. What if Chase gets stricter? American Express, as I mentioned, now only allows customers to have four credit cards instead of five. Other banks I also mentioned are tightening. What if Chase only will allow one credit card every six months? Maybe Chase will only allow one to have two or three credit cards only allowing people to have four cards if they are grandfathered in? What if the strictness surrounding business cards continues through 2021 and even beyond?
Which personal cards will you miss while waiting? Missing out on cards like the Citi Costco Visa card will not be much of a loss. I spoke about this in episode 15, Popular Cards to Avoid, arguing why the card does not provide great total value even though it has some bonus categories. If one really wants the card for some reason, they can get it at a much later time well after 5/24 if low on card options, so why apply for it early in your credit card journey when you can instead get a more valuable card especially with Chase?
We won’t miss the Costco card, but what about the current increased offer on the UBS Business card I reviewed in episode 25? This card easily offers more than $1000 in value in year one and the offer is set to expire July 31 perhaps to never return. This card is absolutely worth a 5/24 slot in my mind. Other solid personal cards like the American Express personal Gold card are available, too, but you’ll probably be able to get it later with a high signup bonus, so that can wait although those spending $25,000 or more at grocery stores will surely be missing out.
What about the Schwab Platinum card with American Express? This, too, may be worth a 5/24 slot especially for those with a large balance of Membership Rewards they may want to cash out to make more money investing or even withdrawing? We see opportunity cost especially in limited-time offers.
One might, like I am at the moment, use some time waiting to be under 5/24 to get cards like the Altitude Reserve which usually is difficult to obtain because US Bank wants to see six months of no opened accounts or hard inquiries. Maybe one inquiry or opened account will be fine, but more will likely be a decline. Even then, I may be declined if US Bank looks back to 12 months of my history or declines me for some other reason.
Returning to cards to wait to be under 5/24 for, I really like the World of Hyatt card not only because of its 50,000 point signup bonus, but also for its additional free night certificate when one spends $15,000 dollars. More spend can also lead to high status levels with Hyatt and milestone perks which may give lounge access, room upgrades, and more. The World of Hyatt card, then, can be especially good for spending which doesn’t fall into bonus categories. As usual, high spenders stand to gain most from credit cards. Low spenders likely won’t reach the 15k spend goal and won’t fully benefit.
Chase Sapphire Preferred is wonderful mostly for its 60,000 point signup bonus and ability to transfer points to Hyatt and airlines. However, after the signup bonus, the card lacks a punch and continued spending isn’t very attractive when one can instead find better bonus categories on other cards and work towards new signup bonuses. Some, especially low spenders without other Chase cards and infrequent travelers, may also downgrade the card in year two.
The Chase airline and hotel cards can be nice, but on my estimation, aren’t much more valuable than cards offered by other issuers. Some frequent travelers can benefit greatly from the Southwest Companion Pass if they can get it…but maybe not so much benefit considering the current pandemic. A possible upgrade to the Ritz Carlton card can be nice, but the IHG and Bonvoy cards lacking an increased offer aren’t so special.
I’m not a fan of the Chase Amazon Visa, another card I suggest most should avoid in episode 15, because it doesn’t provide great overall value for low spenders and there are many ways to save on Amazon. The Starbucks and Disney cards are really subpar. Freedom and Freedom Unlimited are okay, but have low signup bonuses and low overall value unless, again for the Freedom, one is maximizing the 5x categories.
Hopefully these thoughts will help you better evaluate if it’s worth waiting several months to be under 5/24. As always, there’s no one perfect strategy for everyone, but I’m happy to work with you to provide tailored recommendations after learning more about your current situation. Visit my website at hurdygurdytravel.com and complete my free credit card questionnaire for a free consultation.
Returning to 5/24, high spenders who can reach many signup bonuses and get many new cards, will likely suffer most when waiting compared to low spenders who will not quickly reach new cards’ minimum spend requirements. I always aim to work on a signup bonus rather than just settling for 2% or 2x back on my spending well-aware of the fact that waiting for new cards, especially if waiting for 5/24, can come with significant cost.
I hope you enjoyed this episode, something different than my usual fare, and can have a better plan concerning your 5/24 status in the present or future!
Thanks for listening and stay tuned for more content!
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Visit my other podcast at stoicsolutionspodcast.com where you can find practical wisdom for everyday life inspired by the ancient philosophers of Greece and Rome.
Thanks to generous patrons and fans of this podcast who help support my work. Have a great day.