If you have excellent credit but recently got denied for a Chase credit card application, it may be because of a unique rule that denies most people new Chase cards if they've opened too many accounts in the past two years—five, to be exact. Here's a look at Chase's "5/24" rule.
What Is the 5/24 Rule?
Chase's 5/24 rule is an informal policy that essentially restricts anyone who has opened five or more credit card accounts in a period of 24 months from opening a new credit card with Chase. Chase has never officially outlined this policy, but the restriction is well-known by credit card experts and enthusiasts and is supported by numerous consumer posts in online communities.
Typically, when you apply for new credit, a hard inquiry is recorded in your credit file. That record is used by lenders to see how many credit applications you've had in recent months. Hard inquiries remain in your credit file for up to two years and, depending on how many you have in a short period of time, can negatively impact your credit score.
The Chase 5/24 rule, however, does not look at hard inquiries—it looks at credit card accounts that were opened in the past 24 months. Hard inquiries, along with other aspects of your credit reports, may be used in the overall approval process, but only opened accounts affect your 5/24 limit. That means if you applied for a credit card and were denied, that record does not count toward your limit.
What Counts Toward the 5/24 Rule?
Chase's 5/24 rule doesn't only include approvals for Chase credit cards—new credit card accounts opened across all banks count toward your five-account limit. That means if you've opened two American Express cards, two Chase cards and one Capital One card in the past 24 months, it is likely you will be automatically denied for a new Chase card if you apply.
Similarly, several types of accounts can count toward your 5/24 limit, including credit cards, charge cards, business credit cards and certain retail cards.
How Can I Check My 5/24 Status?
If you are thinking about applying for a Chase card and aren't sure how many accounts you've opened in the past 24 months, you can get a free copy of your credit reports and scores to see how many accounts you have and when they were opened.
Look through your reports to see when you opened your most recent credit card accounts. If you find that you've opened more than four credit cards in the past 24 months, it might be best to wait until you have cleared the limit before applying for a Chase card.
Periodically monitoring your credit score is a good way to understand how much credit you're applying for and how it's affecting your score. You can learn more about credit monitoring by checking out Experian's credit monitoring tool.