When it comes to earning travel rewards through credit cards, strategy is everything. One of the most important principles to understand is Chase’s 5/24 rule. This rule can significantly impact your ability to maximize rewards, especially if you’re just starting out in the points and miles game.
Ignoring the 5/24 rule can lead to missed opportunities, costing you thousands of dollars in potential value. Let’s explore why focusing on Chase cards early on is crucial and how a strategic approach can make all the difference.
What Is the Chase 5/24 Rule?
The 5/24 rule limits individuals from being approved for new Chase credit cards if they’ve opened five or more personal credit cards from any issuer in the past 24 months. This restriction applies regardless of whether the cards are still active or have been closed.
Chase is known for offering some of the most valuable credit cards, including the Chase Sapphire Preferred® Card, World of Hyatt Credit Card, and Chase Freedom Flex®. These cards feature high-value sign-up bonuses, ongoing rewards, and flexible redemption options. Missing out on these opportunities can severely limit your rewards potential.
The Cost of Ignoring the Rule
Imagine someone jumping into the points and miles game without a clear strategy. They apply for a variety of credit cards from different issuers, quickly reaching the 5/24 limit. While this approach may yield substantial rewards initially, it comes at a significant long-term cost.
Example:
- Credit Cards Opened: Five cards from various issuers, such as Citi, American Express, and Capital One.
- Total Points Earned: 315,000 points and miles, plus a $300 statement credit.
- Value of Rewards: Approximately $5,738.
This outcome might seem impressive, but because they maxed out the 5/24 limit without prioritizing Chase, they’re now ineligible to apply for any Chase cards. As a result, they miss out on lucrative bonuses and long-term rewards potential.
The Benefits of Starting with Chase Cards
Now, consider a strategic approach that focuses on Chase cards first. By prioritizing Chase before reaching the 5/24 limit, you can secure valuable bonuses and benefits while leaving the door open for non-Chase cards later.
Example:
- Credit Cards Opened: Five Chase cards, including the Chase Sapphire Preferred, United℠ Explorer Card, and World of Hyatt Credit Card.
- Total Points Earned: 270,000 points and miles, plus a $300 statement credit and $200 in cash back.
- Value of Rewards: Approximately $4,925.
While the initial rewards might seem slightly lower, this approach allows for greater flexibility. After locking in Chase’s rewards, the individual can apply for non-Chase cards in subsequent rounds, effectively earning both sets of rewards over time.
Why Chase First? The Long-Term Advantage
Exclusive Rewards
Chase cards offer some of the best sign-up bonuses and ongoing perks in the industry. Missing out on these due to the 5/24 rule can cost you thousands of dollars in value.
Greater Flexibility
By securing Chase cards first, you leave yourself the option to apply for other issuers’ cards later. This ensures you maximize rewards from both Chase and non-Chase ecosystems.
Avoiding Missed Opportunities
Once you exceed the 5/24 limit, you’ll have to wait until your account history falls below the threshold before applying for new Chase cards. This waiting period can result in significant lost value, especially if Chase introduces new or improved offers.
Maximizing Rewards with Business Credit Cards
One way to bypass the limitations of the 5/24 rule is by applying for business credit cards, which typically don’t count toward the 5/24 total. Chase’s lineup of business cards, such as the Chase Ink Business Preferred®, offers generous bonuses and rewards for common expenses.
Benefits of Business Cards:
- No Impact on 5/24: Business cards don’t count toward your personal card limit, allowing you to continue earning rewards without restrictions.
- High Rewards Potential: Many business cards feature lucrative bonuses and category multipliers for expenses like travel, office supplies, and advertising.
Strategic Steps to Maximize Rewards
- Understand Your 5/24 Status: Check how many cards you’ve opened in the past 24 months to determine your eligibility for Chase cards.
- Apply for Chase Cards First: Prioritize Chase cards with the highest value, such as the Chase Sapphire Preferred, World of Hyatt Credit Card, and Chase Freedom Flex.
- Diversify After Chase: Once you’ve locked in Chase’s rewards, branch out to other issuers like Citi, Amex, and Capital One.
- Leverage Business Cards: Use business credit cards to enhance your rewards without affecting your 5/24 status.
- Monitor Offers: Stay informed about special promotions and new card launches to ensure you’re maximizing value.
Final Thoughts
The Chase 5/24 rule is a game-changer in the world of points and miles. Ignoring it can cost you thousands of dollars in missed rewards, while a strategic approach can unlock unparalleled value.
By focusing on Chase cards early, incorporating business cards, and planning for long-term success, you can make the most of your credit card rewards journey. Whether you’re a seasoned enthusiast or just getting started, understanding and leveraging this rule is key to maximizing your travel rewards potential.
