While I’ve been on vacation in Switzerland & France and catching up after that trip, I’ve given a lot of thought to the question posed by this case study – Should I execute on a 15-month plan to get under 5/24 by 11/1/2020?
I’m leaning toward doing this, but I wanted to pose the question and subject my analysis to peer review by savvy Middle Age Miles readers. In doing so, I hope to not only get your advice, but also spur creative and strategic thinking about your own credit card portfolios that I hope will help you maximize your credit card benefits and points-and-miles rewards!
Reminder About the Chase 5/24 Rule
As you’ll recall, in general the Chase 5/24 Rule works like this: If you have been approved for 5 or more new personal credit card accounts within the past 24 months, Chase will not approve you for a new card.
There is some nuance to the Rule. For one thing, business cards from CapitalOne and Discover are included in your 5/24 count. For another, sometimes people have been approved by Chase when over 5/24, using a pre-qualified offer that shows a fixed interest rate (not a range of rates).
At this time, the 5/24 Rule seems to apply to all cards issued by Chase.
The 5/24 count is based on the month on which your new card was approved; that is, it doesn’t matter whether you were approved on the 1st or the 30th. There are some conflicting data points on when cards fall off of your 5/24 count. For example, if I was approved for a new card on 8/23/2017, will it be gone as of 8/1/2019, or will it disappear as of 9/1/2019 instead? We’re not sure, and the answer may be different under different circumstances. For purposes of this article, we’ll make the conservative option and assume that the card will not drop off until the beginning of the 25th month after approval (in our example, it would be gone as of 9/1/2019).
As of today, my credit card situation with respect to the Chase 5/24 Rule is as follows:
- 12/24 (12 personal cards in the past 24 months)
- 7/12 (7 personal cards in the past 12 months)
- 1/6 (1 personal card in the past 6 months)
One important fact, though, is that I had 4 new accounts in the month of October 2018. I’ve only had 2 new personal accounts since then. So, if I go until the beginning of November 2020 without getting a new personal card, I would drop to 2/24 as of 11/1/2020.
Additional important background context relates to the time frame and situation when I started getting seriously engaged in credit cards and points-and-miles rewards. I started in late 2015/early 2016. At that time, the Chase 5/24 Rule was very limited. It applied only to Chase Ultimate Rewards (UR)-earning cards, and not to Chase-issued co-branded cards. And even at that, the Rule hardly applied to me, if at all:
- On the personal side, I was a Chase Private Client (CPC), which at the time exempted me from the 5/24 Rule. I even managed to get approved for the Chase Sapphire Reserve card in November 2016 as a CPC.
- On the business side, I had 1 Chase business card that I’d held for years, plus I was approved for the Chase Ink Plus business card in December 2015 (this card has since been converted to Chase Ink Cash). At the time, there weren’t any additional Chase UR-earning business cards that I didn’t hold.
Thus, I didn’t pay any attention to Chase 5/24 at the start. By mid-2016, I had blown past 5/24 without regard to any potential consequences. I’ve been at least 10/24 for almost 3 years straight now. I’ve cherry-picked the best cards and offers available to me for the past several years, and at the moment I hold a large portfolio of 30 cards – 20 personal and 10 business. Philly also has 10 cards in her name. If you’d like to see what we hold (as of 12/1/2018, at least), check out our reference article, What’s In Our Wallet? Part 1: Our Cards and Breakdowns by Annual Fee and Date Acquired.
Fast-forward to 2019 – My first group of applications this year didn’t go particularly well. In March, I applied for the Barclays Arrival Plus and Ebates Visa cards, as well as for a third Citi AA Platinum card. The Arrival+ and Ebates Visa applications were denied; my only approval was for the additional Citi AA Platinum card. One of three, despite a credit score around 800 and a perfect payment history spanning 30 years. That wasn’t too encouraging for additional applications, although I was subsequently approved in early June for the US Bank Radisson Rewards business card, leaving me at 2-for-4 on the year.
The denials suggested to me that it might be time to cool the jets for a while on new applications, in hopes of increasing my chances of approval later.
Benefits of Going Under 5/24
(1) Chase Business Cards Become Available
After the time I blew past 5/24, Chase has introduced 3 new business cards, the Ink Preferred, the Ink Unlimited, and the Ink Cash. Sign-up bonuses for each of these cards are generous:
- 80k UR points on the Ink Preferred (worth $1,200 at our baseline value of 1.5 cents per UR point)
- In addition, there’s a 20k referral bonus for the Ink Preferred card at this time, meaning that the total haul could be 100k UR points (worth $1,500) if Philly can refer me
- 50k UR points on the Ink Unlimited (worth $750)
- 50k UR points on the Ink Cash (worth $750)
If I was under 5/24, that would make me eligible for at least the Ink Preferred and Ink Unlimited cards. That would be $1,950 in value that I could seemingly capture easily; $2,250 if the referral bonus is still in place. I might be able to get two or more Ink Preferred cards. If you add an additional Ink Preferred card with another referral bonus, the total value available jumps to 250k UR points / $3,750. And I might be able to get an additional Ink Cash card as well.
As you can see, the opportunities on Chase business cards alone are huge.
(2) Additional Chase Personal Cards Become Available
Now, all Chase personal cards, including co-branded cards, are subject to the 5/24 Rule. Going under 5/24 means that I would become eligible for sign-up bonuses on the UR-earning personal cards that I’ve never held – the Freedom and the Freedom Unlimited. In addition, under the current 48-month restriction, I would become eligible in November 2020 for a sign-up bonus on another Sapphire card (either Sapphire Reserve or Sapphire Preferred (or potentially, even both, if the “modified double-dip” strategy lasts that long)).
Also, I would have options to apply for Chase co-branded cards such as British Airways, Iberia, Aer Lingus, United, Southwest and IHG (I already hold co-branded Hyatt and Marriott cards issued by Chase). I couldn’t get all these cards at once, of course, but over time I could cherry-pick the cards with the best sign-up bonuses and/or most valuable benefits to us.
(3) Other non-Chase Cards Also Become Available
Finally, going under 5/24 would open up other opportunities, such as getting a new card with Barclays, which applies a “6/24” rule to some of its cards. In addition, cooling the jets for a while will undoubtedly make it easier to get approved for other cards that do not have bright-line underwriting restrictions, as my credit report will show fewer inquiries.
Costs of Going Under 5/24
The major “cost,” of course, would be the opportunities that I’d have to forego over the course of the next 15 months.
We’ll examine these opportunity costs in more detail in the “factors” section below.
Additional Factors That Impact My Strategy Decision
Let’s look at several factors that impact my strategy decision that are in addition to the “benefits” I discussed above. I’ll examine each of them from the perspective of how they’d play out if I indeed implement an “under 5/24” strategy:
- During the 15-month waiting period, I can still get new business cards, and they won’t count against 5/24 (as long as they’re not Cap One or Discover).
- Note that I have 4 accounts that will fall off at once after October 2020; this would take me from 6/24 to 2/24 if I had no new accounts during that period – But importantly, I can still get 2 new personal cards during the 15-month waiting period and I’d still be under 5/24 as of November 2020
- This would allow me to cherry-pick 2 great offers somewhere along the way
- Philly has several 5/24 slots open at this time
- Thus, we can also cherry-pick good opportunities for her that come up during my 15-month waiting period
- Amex upgrade offers help in the meantime to pick up good-sized bonuses without signing up for new cards
- I just upgraded an Amex Hilton Ascend/Surpass card to Aspire, with an upgrade bonus of 150k Hilton Honors points (worth about $750 at our baseline value of 0.5 cents per point) for $4,000 spend in 4 months.
- I also just upgraded an Amex Business Gold Rewards card to Business Platinum, with an upgrade bonus of 50k Membership Rewards (MR) points (worth about $750 at our baseline value of 1.5 cents per MR point) for $10,000 spend in 5 months.
- I have 2 more Amex business charge cards that are eligible for a Business Platinum upgrade bonus of 50k MR points.
- We have other big-spend thresholds where we can place our spend to receive valuable benefits without signing up for new cards:
- Amex Hilton Surpass – Free Weekend Night for $15k spend
- Chase World of Hyatt – 2 elite nights credit for each $5k spend; valuable as we are Going for Globalist in 2019 with Hyatt
- Barclays AA Silver – we’re using this card for Philly to get benefits toward requalifying for AA Executive Platinum status, plus earn a 2-person companion certificate, and we have about $20k remaining of the $50k total spend to get these benefits
- Barclays AA Business – we’re using this card for me to get an extra 3,000 EQDs to requalify for AA Executive Platinum status, and we have about $15k remaining of the $25k total spend needed during 2019
- I’m not sure how much we’re actually giving up in terms of opportunity costs:
- As noted above, I already have 30 cards and have cherry-picked most of the best sign-up bonuses and benefits from non-Chase cards
- I already hold 7 Amex credit cards, so I’m not able to get approved for a new one without potentially having to close 2 cards – and I only have 1 that would be “easy” to close
- As discussed, I’ve had some challenges getting approved for personal cards during 2019
- The biggest “opportunity cost” might be foregoing applications for additional Citi AA Platinum cards with no time-restrictive language
- But it’s unclear whether these opportunities will continue
- And we have a very large stash of AA miles already; any incremental miles wouldn’t be used very soon anyway
- I might have to wait on some interesting cards such as Wells Fargo Propel (30k points bonus worth $300; additional access to Amex Offers) and the Ebates Visa (assuming I could ever get approved, that is)
- I’ve seen a few opportunities of late that are interesting, but they’re more supplemental-type opportunities that would be outside of our core travel patterns:
- 60,000 LifeMiles on the Avianca Vuela Visa card issued by Banco Popular
- 50,000 Choice points on the Choice Privileges Visa card issued by Barclays
And the Biggest Uncertainty Factor
Things change. Who knows if the 5/24 Rule will be the same in 15 months? The time period might be extended, or Chase might put other restrictions in place that would negatively impact this strategy. Given the changes we’ve seen in the past couple of years, it seems perhaps a fool’s errand to make plans for credit card strategies more than a year out.
In this case, though, it doesn’t seem like we’re foregoing any immediate “killer” opportunities to proceed with the “under 5/24” strategy. And, there are a couple of slots available that won’t delay getting under 5/24 if something huge comes up, plus we can also nab those opportunities through Philly in two-player mode. Finally, we can continue to monitor things, and if something changes to make the strategy unappealing, I can always change course.
Considering all of these factors – the relatively large benefits that would open up to me by going under 5/24 and the relatively small opportunity costs, plus the other mitigating factors that ameliorate the costs – it seems like proceeding with a 15-month strategy to get under 5/24 is the right way to go.
That said, I’m genuinely asking Middle Age Miles readers for insights and counter-arguments here. If I’m missing something important, or if you believe I’ve mis-analyzed, please let me know in the Comments! Many thanks!
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