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We’re living in surreal times. One can’t almost believe that the world’s major cities are completely locked down. When the economy was going steady, we saw many banks impose restrictions on who could get credit cards or how many cards one could get. With the economy the way it is now, many projections point towards a slowdown. In such a case, what happens to the many restrictions that are already in place, like the Chase 5/24 rule?
The Chase 5/24 rule
In simple terms, Chase’s 5/24 rule means that Chase will not approve you for a card if you fit certain criteria. If you have been approved more than 4 credit cards in the last 24 months by any bank, Chase will not approve you for any of their cards. Also, Chase introduced this rule initially only to a few of their cards. However, Chase expanded the rule and it now applies to almost all of their cards.
Also Read: The Chase 5/24 rule – The one thing you must know about it
Spend Thresholds
In addition to 5/24, Chase also added higher spend thresholds to meet welcome bonus requirements. For many of their cards, Chase introduced a tiered system. This meant that you had to spend more and spend for a longer period of time. For example, take the World of Hyatt Card. You’ll earn a total of 50,000 bonus Hyatt points. However, you’ll first have to spend $3,000 in the first 3 months to earn 25,000 points and then another $3,000 in the first 6 months to earn another 25,000 points, totaling to 50,000 bonus Hyatt points.
Also Read: Chase tightening the screws on churning sign-up bonuses
Targeted Offers
Over the last few months, we saw Chase target customers with offers. Chase targeted me with this offer as well. For many customers, they saw the offers after logging into their accounts.
Also Read: Chase sending targeted offers that bypass 5/24
The Pundit’s Mantra
As many predict, the economy could get worse before it gets better. How will Chase tweak their credit card acquisition strategy? I don’t see them completely drop 5/24. Also, remember that Chase 5/24 is pretty much an unwritten rule. Even if it were to ‘go away’, Chase has other restrictions in place like the One Sapphire Rule and the 2/48 rule.
Chase could well take a middle of the road approach. While 5/24 may still be alive, we could see them relax or lower spend thresholds for welcome bonuses. As people spend less, that could be their next avenue to still keep attracting customers for their credit card products. Who knows, Chase could simply keep 5/24 alive and start targeting more people with welcome bonus offers instead. Since 5/24 is an unwritten rule, Chase still holds all the cards. (no pun intended 😁)
Do you intend to apply for a Chase credit card any time soon? What’s your Chase 5/24 status? Let us know in the comments section.
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Massive typo: “Chase will now approve you for…”
“In simple terms, Chase’s 5/24 rule means that Chase will now approve you for a card if you fit certain criteria. If you have been approved more than 4 credit cards in the last 24 months by any bank, Chase will now approve you for any of their cards. Also, Chase introduced this rule initially only to a few of their cards. However, Chase expanded the rule and it now applies to almost all of their cards.”
Along with the title, makes it sound like they actually made the change
Hi Typo,
Fixed it. Thanks a lot for pointing that out.
Most people in the general population are not anywhere near 5/24. If you are, you are either churning, maximizing rewards, etc, and you aren’t a profitable customer so I doubt Chase would care to relax the policy. Yes, if the economy gets really bad, they will want customers, so they may lower overall lending standards a bit — but they still won’t want churners. I don’t think 5/24 is going anywhere.
Hi Kevin,
Thanks for your comment. Yes, that’s what I conclude at the end of the post. We may still have 5/24 around but spending thresholds for welcome bonuses may be lowered, more targeted offers may be sent out to entice customers to apply for cards.
It’s pretty clear that in general customers who get more than 5 Chase cards in 2 years are not profitable.
The premise of the article doesn’t make sense. 5/24 cuts down on churning while still leaving room for legitimate credit card acquisition of (likely to be) profitable customers. Why would they want to relax rules and encourage churning, and activity with which they lose money?
HI Em Jay,
Thanks for your comment. While weeding out churners may have been the initial motive, Chase also locked out many big spenders who had 4 or more cards in 24 months and were playing the miles and points game, albeit a lot less actively.. If the economy goes south, Chase may want to widen the net and still incentivize those customers to come back and spend on their cards.
I’m over 5/24 and spend $15-$20K a year on travel for work. I want to use the United Club card. I might be the exception to the rule. It would be nice if they’d find a middle of the road approach like Amex and still approve the card but if someone is over 5/24, not allow them to get the bonus.