Thinking About Travel Hacking? Watch Out For the 5/24 Rule
So, you’re thinking about adding some plastic to your wallet. You want to take advantage of as many bonuses and offers as possible, and you definitely want to earn cash back where you can. You may even be thinking about travel hacking, where you open a number of new accounts in order to reel in a number of introductory point, mile, and cash back offers. Where do you look first?
Chase offers a wide variety of credit cards with different perks, including low-fee balance transfers, travel rewards, rotating cash back categories, and even 5% back at Amazon. They are one of the more prominent card issuers, and frequently issue large sign-up bonuses to encourage new customers. Chase, however, has an interesting rule that makes them stand out when it comes to travel hacking.
The 5/24 Rule
You may have heard about their 5/24 Rule, especially if you’ve spent any time researching card hacking.
Simply put, if you’ve opened up 5 new accounts in the last 24 months, you’ll be denied for most Chase credit cards. This rule is all but inflexible, even with calls to customer service to beg them to reconsider. This is unfortunate, as it could lead to you missing out on some of the largest sign-up bonuses seen on credit cards to-date.
One important note: there are numerous reports that being pre-approved in a Chase branch for these cards leads to approval for the card. Anecdotally, I traveled to New York City last November and was approved in-branch for the Chase Sapphire Reserve at 12/24 accounts. So, this work-around could be a possibility if you live near a Chase branch.
Check Out Its Brother Card, the Chase Sapphire Preferred
If you’re considering taking on the travel hacking game (beware: it requires strong organization skills and a lot of attention to detail!), Chase should be high up on the list of issuers to pursue. You’ll be applying for credit cards regularly, so you’ll quickly exceed the limitations for the 5/24 rule. For example, in the last 24 months, I’ve applied and been approved for 15 cards. In the world of travel hackers, that’s not even on the high side of new accounts.
Cards Not Under 5/24
The following cards are reportedly not under Chase’s 5/24 rule:
- Amazon Prime Rewards Visa (I was approved last month at 13/24)
- British Airways
- Disney (both Rewards and Premier)
- Marriott Business (note: there are conflicting reports on this but I was approved last October at 11/24)
Note that these credit cards will still result in a hard pull and the opening of a new account. So, if you’re interested in them, you should prioritize them after you’ve put yourself past the 5/24 threshold.
Which Card First?
First of all, a disclaimer: if you’re getting into travel hacking, here’s the criteria you need to meet:
- Have an excellent credit score (I would put this at 720+, if not 740+)
- Pay off your credit card statement balances in full each month
- Be disciplined and organized with your money
- Be able to meet the minimum spend on a new credit card without being financially irresponsible
- Be unafraid of spending time doing research — there are no shortcuts here!
I would prioritize Chase cards as follows:
- Chase Sapphire Preferred
- Chase Sapphire Reserve
- Chase Ink Preferred
- Chase United MileagePlus Explorer
- Chase Marriott Rewards
- Chase Freedom
- Chase Freedom Unlimited
- Chase Southwest Rapid Rewards Premier
Note that there are more than 5 on this list, so you’ll have to do some research as to which card is right for you. The Chase Sapphire and Ink lines earn Ultimate Rewards points. These offer flexible and valuable redemptions across a number of airlines and other travel partners. The Chase Freedom line offers cash back perks as statement credits. The other branded cards like United and Marriott offer brand-specific points and miles.
I’ve prioritized the United and Marriott cards ahead of the Freedom cards for a few reasons. First, it’s possible to change your credit card to the no-fee Freedom cards after some time. So, if you’re a Sapphire Preferred cardholder and you’d like to discontinue paying the fee, it’s possible to change that card over to a Freedom.
Second, the bonuses for those two branded cards are relatively valuable at the moment. The United offer at 50,000 miles is higher than it was in 2016. The Marriott points are now eligible to transfer to Starwood Preferred Guest® Credit Card from American Express at a good rate (3:1).
If I were just getting into travel hacking, I would be going straight down this list. You may be put off by the Ink Preferred being a business card, but applying for a business card isn’t as daunting as it might seem. Many people run small self-owned business through eBay selling or Etsy shops, and it’s perfectly reasonable to have a business line of credit for those expenses. The process is nearly exactly the same as a personal application; you’ll just need to provide some information about the type of business you operate.
To 5/24-ers and Beyond
My advice to the unfortunate folks who are past 5/24: don’t worry about it. While some of these bonuses are stellar (the previous Chase Sapphire Reserve bonus at 100,000 points was great while it lasted), the sheer number of other card issuers and bonuses means that there’s no shortage of great perks to be had.
Lately I’ve been focusing my efforts on airlines like Delta and American, as well as Membership Rewards points through American Express. New cards are constantly being rotated in and out. So, it’s more important to be able to jump on the higher bonuses when available, than to worry about getting back under 5/24.
Best of luck out there, and happy travels!