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The Chase 5/24 rule intimidates many miles and points aficionados. It’s essentially Chase’s unpublished rule for putting restrictions on credit card applications. The Chase 5/24 rule means that Chase will not approve you for a Chase credit card if you have acquired 5 or more personal credit cards in the last 24 months. Business credit cards don’t count towards your 5/24 status. If you’re currently under 5/24, you can apply for a Chase business credit card like the Chase Ink Preferred and still get approved for the 80,000 Ultimate Rewards points sign-up bonus.

The Business Case for Chase 5/24

Why does the 5/24 rule exist in the first place? In simple terms, Chase determines that if you’re over 5/24, you’re likely to display behavior that may not be profitable for them in the long term. In short, they’ve set the marker where they think that anyone under 5/24 is a customer that’s worthy going after and keeping. From a business perspective, they are willing to incur the customer acquisition cost (sign-up bonus) in order to acquire that customer.

Other Vital Reasons

While business or financial reasons may be the primary driver, I think Chase 5/24 is one of the smartest word of mouth marketing campaigns of our time. I’ll explain in this post how.

Closely Knit Community

The miles and points community is very closely knit. We’ve always used this to our advantage. Chase turned the tables and turned this very aspect into a disadvantage.

Chase knows very well that the miles and points loving community is a closely knit community. Be it Reddit, FlyerTalk, BoardingArea or other events, you’ll bump into a lot of the same people. Chase knows well that once word spreads about this rule, it will spread fast. In short, every miles and points ‘hobbyist’ in this close knit community will ensure that a fellow hobbyist knows about this.

Why is this vital? It means that people in the community are effectively spreading the word about this rule for Chase. In short, Chase doesn’t have to spend a dime on communicating this. Also, it helps them deny the existence of such a rule if they ever get asked about whether this is an official policy.

Unpublished Rule

By ensuring that this is an unpublished rule, Chase also ensures that they don’t scare off consumers who are well under 5/24 and don’t really look at collecting miles and points as a hobby. In short, big spenders who don’t play the miles and points game.

Prioritizing Chase Cards

I’ve written previously about top of mind awareness and why it’s so important in a crowded market. With 5/24, Chase has ensured that their brand and cards stay top of mind. How many of us are planning our credit card applications keeping 5/24 in mind? Chase has ensured that when miles and points aficionados do apply for a credit card, it’s all centered around Chase.

Adding Restrictions

In addition to 5/24, this is essentially Chase’s insurance policy to reduce churning. In the miles and points game, the banks hold all the cards (no pun intended!) and can add/change restrictions on sign-up bonuses. Chase suddenly flipped the 24 month Sapphire Rule and changed it to the 48 month rule. What it entails is that even after you drop under 5/24, you can only hold one Sapphire card and earn the bonus only once every 48 months.

The Pundit’s Mantra

Unless you’re really looking for a particular credit card, should you really wait to drop under 5/24? I answer that question in this post.

I waited to drop under 5/24 because I wanted to get the World of Hyatt credit card (50,000 World of Hyatt points sign-up bonus) by Chase. After I got the card, I’ve stopped caring much about 5/24. I apply for a card every time I see an elevated sign-up bonus that suits my travel patterns. I always recommend that you get a card that suits your travel patterns. There’s no point in just collecting miles and points without a strategy, if they don’t help you attain your travel goals.

I think the Chase 5/24 is a genius marketing move. It’s an unpublished rule that targets a specific interest group and avoids spreading panic amongst Chase’s actual target customers. Chase has managed to cut their customer acquisition costs without spending a dime to talk about this rule or even mention it anywhere. So it’s a perfect storm. They’ve achieved their business objective without putting a drain on their financial or human resources.

What do you think about Chase’s 5/24 rule? Do you still care and wait to drop under 5/24? If yes, which card are you looking to get after you drop under 5/24? Let us know in the comments section.