Middle Age Miles

Credit Card Limits & Velocity Rules

[Featured image courtesy Travel + Leisure]

This article is part of Middle Age Miles’ “Resources” series.

When you’re collecting credit card sign-up bonuses to generate points and miles for travel and establishing your strategies on what cards to get and when, it’s important to have an understanding of the limits and velocity rules that are imposed by credit card issuers.  We’ll examine those limits and rules here:

Preliminary Comments & Observations on Card Limits & Velocity Rules

First, let me give a major hat tip and credit to the moderators and contributors at Reddit Churning and the Doctor of Credit website for helping me learn about this subject and providing many of the data points from which we deduce these limits and rules.

Second, it’s important to understand that each card issuer has its own limits, velocity rules, and underwriting standards.  American Express is different from Chase, which is different from Citi, and so on and so forth.

Third, it’s also important to understand that many of these “rules” are not necessarily hard-and-fast rules.  Rather, some “rules” are deduced from a set of data points that seem to fit into a pattern.  There may be exceptions to some of the “rules” we discuss here, for any number of reasons.  And in addition to the “rules,” there can be some less-certain guidelines that we believe should be helpful in getting cards approved.

And fourth, understand that all of these “rules” are not set in stone for eternity – rather, they are fluid rules that can – and do – change over time, sometimes with no advance notice.  The really serious points-and-miles participants follow these rules constantly, stay up to date, and adjust their card applications accordingly.

Card Limits & Velocity Rules by Issuer

American Express

One Sign-up Bonus per Lifetime, per Product – On each Amex credit card and charge card, Amex has a limit that you can only receive one sign-up bonus per product, ever.  Because of this rule, you will generally want to apply for an Amex credit card when its sign-up bonus is at or near an all-time high.  For example, the current public sign-up bonus for the Amex Personal Platinum card is 60,000 Amex Membership Rewards (MR) points.  However, there are targeted offers that go up to 75,000 or even 100,000 MR points, so it may be worth it to hold out for a better offer than 60,000 MR points.

One nuance to the “once-per-lifetime” limit is that different versions (sometimes called “flavors”) of the Amex Personal Platinum card are considered to be different products; thus, at least for now you can receive a sign-up bonus on each “flavor” – for instance, the regular (sometimes called “vanilla”) Personal Platinum, the Schwab Personal Platinum, and the Morgan Stanley Personal Platinum card.

There are also anecdotal reports that a “lifetime” with Amex may be 7 years, such that you could get a new sign-up bonus on a product after 7 years.  There are also other anecdotal reports of people receiving a second sign-up bonus on an Amex card even without waiting 7 years, but we have not found any discernable pattern, so these may simply be Amex system glitches.

Five Credit Card Limit – Amex limits each person to holding five Amex credit cards as the primary cardholder.  Authorized User (AU) cards do not count against the 5-credit-card limit.  Also, importantly, Amex charge cards (personal and business Platinum, Gold and Green cards) do not count against the 5-credit-card limit.

There are a fair number of reports of people exceeding this limit, but they seem to be specialized situations.  For example, in early 2018 Amex acquired a portfolio of Hilton co-branded cards from Citi.  The cards that were converted from Citi to Amex Hilton co-branded cards do not seem to count against the 5-credit-card limit.

Amex 1/5 Rule – Amex will only approve you for one credit card within a 5-day window.

Amex 2/90 Rule – Amex will only approve you for two credit cards within a 90-day window.

Financial Review and the RAT Team – Within the past year or so, Amex has begun to crack down on what it considers to be abuse of its cards and rewards.  If Amex believes that a cardholder is abusing its system, it may institute a “Financial Review” of the cardholder’s accounts and potentially shut down their accounts.  In addition, Amex established a Rewards Abuse Team (RAT) to police these issues. The Amex terms and conditions about sign-up bonuses provide some guidance in terms of what Amex may consider abuse: “If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit the welcome bonus to, we may freeze the welcome bonus credited to, or we may take away the welcome bonus from your account.  We may also cancel this Card account and other Card accounts you may have with us.”

If you’d like to read more in-depth information about American Express cards, consider this article from Doctor of Credit (the article is dated in 2015 but still contains valuable information).

Bank of America

BofA 2/3/4 Rule – You can be approved for no more than 2 BofA cards within a 2-month period; 3 BofA cards within a 12-month period; and 4 BofA cards within a 24-month period.

Other possible BofA rules – Some people have reported being limited to 4 credit cards with BofA, and there are also reports of students being limited to 2 BofA cards.

If you’d like to read more in-depth information about Bank of America cards, this article from Doctor of Credit is very useful.

Barclays

We don’t know of hard-and-fast rules related to Barclays cards and velocity limits, but there are a few issues worth highlighting here.  One, Barclays seems to be tougher than other card issuers in terms of approvals.  Two, there are reports of a 6/24 limit on at least some Barclays cards.  Three, there is a generally accepted guideline that you should not apply for more than one card from Barclays in a 6-month period.  Four, it is also generally accepted that Barclays likes to see spending on previously-issued Barclays cards before issuing another card to the same cardholder.  Five, Barclays recently seems to be getting very strict about obtaining supporting documentation for business card applications before approving them.

For more information about Barclays cards, see this article from Doctor of Credit.

Capital One

Capital One 1/6 Rule – You can only be approved for one Capital One credit card in a 6-month period.

For more information about Capital One cards, see this article from Doctor of Credit.

Chase

The Chase “5/24 Rule” – Basically, the 5/24 Rule is that Chase will not approve you for certain cards if you have 5 or more new personal credit card accounts within the past 24 months, from any issuer.  Here’s a rundown of how the 5/24 Rule works and how it’s applied:

The 5/24 Rule applies to all of Chase’s own cards (that is, cards that are not co-branded cards), including personal and business cards.

This includes all of Chase’s “Ink” business cards as well as personal cards such as the Sapphire Reserve, the Sapphire Preferred, the Freedom, and the Freedom Unlimited.

The 5/24 Rule also applies to some of Chase’s co-branded cards.  The 5/24 Rule applies to Chase’s United and Southwest cards, and also to its Marriott personal card.

However, the 5/24 Rule does not apply to other Chase co-branded cards.  The 5/24 Rule does not apply to Chase’s Hyatt, IHG, Ritz-Carlton (recently discontinued), British Airways, Aer Lingus or Iberia cards, and it also does not apply to its Marriott business card.  [Note, however, that even though these cards are not subject to the Chase 5/24 Rule, they do count toward your 5-card limit (except for the Marriott business card).]

Just being “under” 5/24 does not guarantee approval for any Chase card.  Other rules and underwriting standards as discussed below may still prevent you from being approved.

Chase also has other “velocity” rules about how quickly you can apply and be approved for Chase cards:

2/30 on all Chase cards – Usually, Chase denies a 3rd personal credit card application within 30 days. This is not a hard-and-fast rule, but exceptions are rare.

1/30 on Chase business cards – If you have applied for any Chase card within the past 30 days (business or personal), then Chase will usually deny your next application for a business card within that 30 day period. Again, this is not a hard-and-fast rule, but exceptions are rare.

1/48 on the Sapphire Reserve and Sapphire Preferred – The terms and conditions for the CSR and CSP card state that “This product is available to you if you do not have any Sapphire card and have not received a new cardmember bonus for any Sapphire card in the past 48 months.”  Despite this hard-and-fast rule, there are many data points of people getting approved for both the CSR and the CSP if they apply for both cards on the same day and receive instant approvals for the cards.  [This rule recently changed from 1/24 to 1/48.  As of mid-September 2018, we believe that the legacy methods of getting the 24-month limitation instead of 48 months have died.]

Tougher Chase Approvals – In very recent times (starting perhaps as recently as July 2018), Chase has gotten tougher with approvals. If you’re just starting with getting points and miles through credit cards, this shouldn’t be a problem.  But if you have many other open accounts and/or a high credit limit-to-income ratio on your existing credit card accounts, sometimes Chase will deny applications even if no other “rules” are violated.

Chase Shutdown risk – There are a fair number of anecdotes of cardholders being shut down by Chase and having all of their accounts closed.  Based on our review the data points, we believe these fall into two categories – one, cardholders who abuse the Chase rules and rewards structure; and two, people whose credit profile shows signs of “bust out” risk (for example, running up huge credit card debt and then fleeing the country).  Some cardholders have been successful at getting accounts reinstated after being shut down by Chase.  We do not believe that shutdown is a material risk for normal customers who obtain and use credit responsibly.

For more information about Chase cards, see this article from Doctor of Credit.

Citi

1/24 per Product Family – You cannot get a new sign-up bonus on a Citi card if you have opened or closed a card in the same Citi “product family” in the past 24 months.  The Citi “product families” to which this rule applies are the Citi “ThankYou” cards and Citi’s American Airlines co-branded cards.

This rule sounds simple, but it can become complex in application.  For example, does your 24-month clock reset if you product change a card?  I don’t believe there is a definitive answer to this question, but the conventional wisdom is that the 24-month clock does reset if your card number changes or if you product change to or from a different “product family,” and it does not reset if you product change within the same “product family” and your card number does not change.

There are several other rules and nuances that help reduce the impact of the 1/24 Rule:

Business cards are not in the same “product family” as their corresponding personal cards.  For example, opening or closing a Citi AA Business card does not impact your 24-month clock for Citi AA personal cards.

Citi AT&T co-branded cards earn ThankYou points, but they are not considered to be in the same “product family” as Citi’s ThankYou cards.  Likewise, opening or closing the new Citi AA MileUp card does not impact the ability to get a sign-up bonus on Citi’s other AA co-branded cards.

Finally, Citi sends targeted mailers (and perhaps makes other targeted offers) that do not include the 1/24 limitation language.  If you apply through a targeted mailers or offers without the 24-month limitation language, you can still receive the sign-up bonus on your new card.

Citi 1/8 Rule for personal cards – You can only be approved for 1 personal Citi credit card within an 8-day period.

Citi 2/60 (or 2/65) Rule – You can only be approved for 2 Citi credit cards (personal or business) within a 60-day period.  Most commenters recommend waiting 65 days; thus, this rule is sometimes referred to as the “2/65 Rule” rather than “2/60.”

Citi 1/90 (or 1/95) Rule for business cards – You can only be approved for 1 business Citi credit card within a 90-day period.  Most commenters recommend waiting 95 days; thus, this rule is sometimes referred to as the “1/95 Rule” rather than “1/90.”

For more detailed information on Citi credit cards, see this article by Doctor of Credit (the article is dated in 2015 but still contains valuable information).

Discover

Discover 2-Card Limit – You can only hold a maximum of 2 Discover cards at any time.

Discover 1/12 Rule – You can only be approved for 1 Discover card within a 12-month period.

For more information on Discover cards, see this article by Doctor of Credit.

US Bank

US Bank is somewhat like Barclays in that it seems to be tougher than other card issuers in terms of approvals, yet there seem to be few hard-and-fast rules.  We recently reported our own data points on Middle Age Miles that we believe are instructive, at least with respect to US Bank’s flagship credit card, the Altitude Reserve [see Persistence Pays – Approved for the US Bank Altitude Reserve Card!].  In our experience, 6 new cards within the previous 12 months, including a new card in the same month we submitted our Altitude Reserve application, resulted in a denial.  When I called US Bank to ask about the denial, the representative mentioned the very recent new account and the number of accounts within the past year as reasons for the denial.  So, I then waited several weeks until my stats were 3 new cards within the past 12 months with our most recent new card being 86 days old, and I re-applied.  This time I was approved.  These data points suggest some nice bookend guidelines – 6/12 with a new account within 30 days is too much; 3/12 with no new account within 60 days is ok (as of mid-2018, for the Altitude Reserve, at least).

For more information on US Bank cards, see this article by Doctor of Credit.


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