What is the Chase inquiry rule?

Navigating the Labyrinth: Understanding Chase’s 5/24 Rule

In the world of credit card rewards, Chase stands tall, offering a tempting array of cards with lucrative signup bonuses and enticing perks. However, accessing these rewards isn’t as simple as filling out an application. You need to understand and strategically navigate a significant hurdle: the Chase 5/24 rule.

This rule, a cornerstone of Chase’s credit card approval process, dictates that you will likely be denied a new personal credit card from Chase if you have opened five or more credit cards across any issuer in the past 24 months. Let that sink in. It doesn’t matter if those five cards are from Chase, American Express, Capital One, or a local credit union – if you’ve opened that many, Chase considers you a higher risk and is likely to reject your application.

Why does Chase implement this seemingly restrictive rule? The underlying reason boils down to managing risk and targeting customers who are more likely to be loyal and active users of their cards. By limiting approvals to those who haven’t been on a credit card opening spree, Chase aims to attract individuals who are genuinely interested in using their products long-term, rather than simply chasing signup bonuses and potentially racking up debt they can’t manage.

Key Takeaways About the 5/24 Rule:

• It applies to all card issuers, not just Chase: The 5/24 clock counts every card you’ve opened in the last two years, regardless of the bank.
• It primarily affects personal credit cards: While business cards don’t count towards your 5/24 total (unless they are from certain issuers like Capital One and Discover that report to personal credit bureaus), applying for a Chase business card after you’re over 5/24 is often possible.
• Being an authorized user counts: Even if you’re only an authorized user on someone else’s card, it still counts towards your 5/24 count, as it appears on your credit report as a new account opened.
• Credit inquiries do not affect the 5/24 rule: While hard inquiries are a result of applying for credit, the 5/24 rule is specifically about the number of accounts opened.
• Chase monitors your credit reports: They automatically check your credit report to determine your 5/24 status. You can’t hide this information.

Strategic Planning is Key:

Understanding the 5/24 rule allows you to strategically plan your credit card applications. Here are some tips to maximize your Chase rewards:

• Prioritize Chase cards when starting out: If you’re building or rebuilding credit, prioritize Chase cards early on. Target the cards that align with your spending habits and offer the most valuable rewards for your lifestyle.
• Track your card opening dates: Keep a record of when you opened each credit card. This helps you understand your 5/24 status and plan accordingly.
• Consider business cards: If you’re over 5/24, consider applying for Chase business cards (if you have a business, even a small side hustle). These won’t be affected by the rule and can still earn you valuable Chase Ultimate Rewards points.
• Be patient: Sometimes, waiting is the best strategy. As older accounts age past the 24-month mark, you’ll gradually fall back under 5/24 and regain eligibility for Chase cards.

In Conclusion:

The Chase 5/24 rule is a significant factor to consider when navigating the credit card landscape. By understanding the rule and planning your credit card applications strategically, you can increase your chances of being approved for Chase cards and maximizing your rewards potential. Remember to track your card opening dates, prioritize Chase cards early, and consider business cards to stay ahead of the game and unlock the full benefits of the Chase ecosystem.