Doctor of Credit is reporting that there’s a new modification to Chase’s famous 5/24 rule.
In this article
A reminder on the Chase 5/24 Rule
The rule states that if you have opened 5 new personal credit cards – from any issuer – in the last 24 months (plus any Capital One or Discover business cards, since those get reported to your personal credit profile) you will not be approved for a new Chase card.
Business cards (other than Capital One or Discover) you’ve applied for shouldn’t affect 5/24, since they don’t report to your personal credit file.
But it DOES apply to applying for a new Chase business card if you are already over 5/24.
The Tightening Credit Environment
All banks have been tightening credit severely during COVID-19 (and with good reasons, given the double digit unemployment) to guard against defaults.
Chase won’t even let you apply for a Chase Business credit card without already being a Chase customer (bank account or other Chase credit cards) these days and approvals from all issuers are way down, meaning even those with 800+ credit scores are seeing denials.
On top of that, issuers have been recently lowering people’s credit lines without warning – sometimes to less than half what it was. Pure risk management.
Does 5/24 Now Include Credit Line Increases?
It seems so!
The DoC reader said that he applied for a Credit Line Increase (so, to be clear, not a new card).
They were denied and the reason given was “Too many credit cards opened in the last two years associated with you”
An interesting question is if a Chase CLI would count as a 5/24 slot now – and I don’t think we have that data yet (if you were 4/24 and had a CLI and then got denied for a Chase card, that would be the data point we need here).
It’s also not clear if this is a new hard and fast rule or not.
If you have a data point, please share!
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