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Chase frequently won’t approve new credit cards for most customers that have had 5 or more new accounts in the last 24 months. That’s informally known as the ‘5/24 rule’.
This doesn’t apply to all of their cards, but Chase’s President of Co-brands tells me that we can expect that eventually it will.
If you’re under 5/24, getting a Chase business card is a no brainer. Get the Ink Business Preferred℠ Credit Card which offers 80,000 points after $5000 spend within 3 months and earns triple points on the first $150,000 spend on travel, telecommunications, shipping and advertising on social-media and search engines. It even comes with protection for your cell phone if you pay using the card. Since most business cards don’t report on your personal credit, they won’t usually count towards your 5/24 total.
Then if you’re under 5/24, getting another great Chase personal card makes sense. The best online card offer is for the Chase Sapphire Preferred Card: 50,000 points after $4000 spend within 3 months. This is a $0 annual fee the first year (then $95) card that earns double points on travel and dining.
But if you’re at 5/24, you may be stuck. These are great products and it’s not that you simply aren’t eligible for a signup bonus, many applicants will be declined for the product. Although it’s well known that 5/24 doesn’t seem to apply to the British Airways Visa Signature® Card, IHG® Rewards Club Premier Credit Card, or The World Of Hyatt Credit Card.
5/24 is why it’s important to get Chase products first, getting a Chase Sapphire Preferred Card now lets you get other cards from different banks without standing in the way of being approved for a Sapphire Preferred.
I get what Chase is trying to do here. I really do. Chase figures if you’ve had 5 or more new card accounts in the last 24 months you’re likely switching cards too quickly to become profitable.
Pouring Krug in Singapore Suites
They don’t think they’ll earn back their marketing costs (e.g. signup bonus). Limiting approvals to those with fewer than 5 new cards in 24 months only cuts off a small percentage of the population, perhaps 5%, and likely much of those cut off would be unprofitable.
But that doesn’t mean everyone is unprofitable. And it’s bad customer service for existing bank and investment clients, or major credit card spenders, to be rejected.
- Perhaps someone with 4 new cards in the past 2 years starts a business and wants a Chase Visa to keep their business spend separate. They want the Ink Business Preferred℠ Credit Card for triple points on social media and search advertising, and for the cell phone protection it offers — even apart from the card’s initial bonus.
- Maybe a United Global Services member or a Marriott 100 night customer with $20,000 a year in spend (enough to receive a designated Ambassador) wants their preferred travel brand’s card, they are a profitable customer but shut out of their brand’s card.
Marriott’s Al Wadi Desert Resort
So I wish that Chase would approve applications even without awarding the bonus to people who have reached 5/24. In other words, I wish they’d follow American Express’ lead. In any case, Chase could create applications with no promise of a bonus specifically for those at 5/24 or above.
Of course this would require investing in a new approval path without the bonus. They would pick up more card customers, and their acquisition costs for those customers would be much lower, but it would require an IT and compliance cost to make it happen.
Still, it would allow more customers to get and spend money on Chase cards, while meeting Chase’s objective not to acquire unprofitable customers.