Point Me to First Class with Devon Gimbel MD | The Most Important Rule in Points Travel: Chase's 5/24 Rule with Dr. Disha Spath

26. The Most Important Rule in Points Travel: Chase’s 5/24 Rule with Dr. Disha Spath

Aug 28, 2023

The Chase 5/24 rule is one of the most important unofficial, unpublished rules when it comes to earning rewards points. I haven’t covered it on the podcast before because this is where things get a little technical, and risks becoming a little boring. However, I have a dynamic and inquisitive guest here to deconstruct the Chase 5/24 rule and make it as interesting and entertaining as possible.

Joining me today is Dr. Disha Spath, a practicing Primary Care physician and Hospitalist. She’s also the founder and CEO of The Frugal Physician: an award-nominated multimedia company that focuses on personal financial empowerment for healthcare workers. She helps doctors avoid common money mistakes, and she’s here to help me break down Chase’s 5/24 rule.

While Disha is an expert in personal finance, she doesn’t consider herself an authority in the world of points. Tune in this week for a simple explanation of the Chase 5/24 rule from somebody with a special interest in the rules that govern the most impactful rewards cards. We’re discussing some common beginner mistakes, how these mistakes can stop you from getting new Chase rewards credit cards, and how you can avoid them on your own points journey.


What You’ll Learn from this Episode:

  • Why, even for someone with a financial background, having some help on her points journey has made a massive difference for Disha.
  • Disha’s journey of realizing how useful points can be in helping doctors save money.
  • A simple description of what exactly the Chase 5/24 rule is.
  • The point in your rewards travel journey when you really need to be aware of Chase’s 5/24 rule.
  • How to determine the most valuable Chase cards for you.
  • The common mistakes you need to avoid to make sure you don’t fall foul of Chase’s 5/24 rule.
  • What to do if you’re already in breach of the Chase 5/24 rule.
  • Some common questions that points beginners always have about the Chase 5/24 rule.
  • How to integrate Chase’s 5/24 rule into your overall points strategy.


Listen to the Full Episode:


Featured on the Show:


Full Episode Transcript:

Welcome to Point Me to First Class, the only show for employed professionals, entrepreneurs, and business owners who are looking to optimize their higher-than-average expenses to travel the world. I'm your host, Devon Gimbel, and I believe that your expenses are your greatest untapped asset if how to leverage them. Ready to dive into the world of credit card points and miles so you can travel more, travel better, and travel often? Let's get started.

Devon: Welcome back to the podcast everybody. So before we dive in today, I want to give you a little bit of background on this week's episode. So usually when I sit down to decide what topic to discuss on the podcast, one of the things that I think about are what are the foundational points knowledge that you all need to be able to earn and use points for travel in a way that doesn't make you feel you've taken on another full time job?

if I can cover one of those topics in a way that's slightly interesting or entertaining, even better. as I've been looking at the topics that I've already talked about so far in previous episodes, one thing that has really stood out to me as crucial information that you really need to know and understand if you're in this hobby is a topic that I haven't covered at all so far.

But the problem with this crucial topic is that, frankly, it's also incredibly boring. I've been putting off doing an entire podcast episode all by myself around this topic up until now. But the truth is that if you are serious about becoming proficient in earning points, it's absolutely essential that you understand this aspect of rewards cards so that you don't accidentally make some really common mistakes that can prevent you from getting some of the most valuable rewards cards on the market.

the crucial topic that I'm talking about is understanding the Chase 5/24 rule, otherwise known as the most important yet unofficial and unpublished rule in the world of points earning credit cards. So what I decided to do to try to make this pretty boring topic just a little bit more interesting for you all to learn about is that I invited a guest here today to deconstruct the Chase 5/24 rule with me, and I would love to welcome her to the podcast now.

So joining us today is Dr. Disha Spath, a practicing primary care physician and hospitalist. She also happens to be the founder and CEO of the Frugal Physician, an award nominated multimedia company that focuses on personal financial empowerment for healthcare workers. Dr. Spath started writing about finances when soon after becoming an attending, she and her husband found themselves making many of the money mistakes that are common in the physician community. They decided to make significant changes financially and had great success.

now she's passionate about teaching other physicians and healthcare professionals about financial literacy so they can find their freedom and design their ideal lives. the reason that I wanted to do this episode with Disha is that even though she is an expert in personal finance, she does not consider herself an expert in the world of points.

I was so excited to bring someone on who still is also in the learning phase when it comes to really getting into the weeds of the rules that govern a lot of the cards that we talk about on this podcast that I'm sure you're hearing about if you're in any other points spaces on the internet, or in the podcast world. I really wanted to have someone who is still in the middle of learning about this very important topic to be able to come on and have a conversation with me about it because I am positive that she is going to illuminate some of the questions that many of you are dealing with when you are first learning about this rule as well.

I think that that's going to be so helpful for taking, I said, this topic that just to hear me talk about for 20 minutes straight, even though it's important content, I think it's probably not that compelling. But to hear a conversation about it I hope makes it even easier for you all to understand.

most importantly, we want to help you avoid making some beginner mistakes around the Chase 5/24 rule that can potentially impact your ability to get new Chase rewards credit cards for up to two years. So thank you so much for joining me on the podcast. Disha, welcome to the Point Me to First Class podcast.

Dr. Disha: Thank you so much. I'm a big fan of yours. you said, I am not a points expert. I love 401Ks and 457s, and I could think about stocks all day long. However, when I start reading the details on points hacking, my eyes somewhat start to gloss over. But you have made it really, really easy to pay attention and learn this stuff, and I'm very, very thankful to you for that.

I'm aware that points are important. I got my first Chase Sapphire Reserve card about six years ago and realized how important points can be in helping us save money. I'm very excited to share that message with other doctors. I love that you have just completely changed the game in optimizing points. I'm so excited to learn from you today.

Devon: Well, thank you so much. One of the things that you just said to me really, really stood out, which is that you've been in this world for a couple of years now. But even when you go to learn about a certain topic in a little bit more detail, that when you get into just reading all of these rules that your eyes can kind of gloss over.

I think that's exactly what happens around this particular topic, the Chase 5/24 rule, where there's a lot written about this on the internet, and I think a lot of it is accurate and helpful. But I think what's missing is a conversation around it. Because I think when we just read a bunch of sentences online, first of all, you said, we can just kind of lose our train of thought. if we're not interested in something, we're certainly not going to really try to absorb that information and integrate it.

I also think, at least what I saw for myself when this rule really first came out and started developing a bit over the years. is that there's a lot that is not explicitly really talked about online. that is where people can fall into making mistakes that then have ramifications, I said, on their ability to be eligible for more Chase credit cards.

so I really think this is an episode that is something that if you can just bookmark, come back to whenever you need it, and listen to especially if you're in the beginning of your points journey. My hope is this going to save some of you from making, again, some mistakes that can be a little bit painful to learn about after the fact.

So let's dive right in and just get to first of all what is this thing that we're even talking about? What is the Chase 5/24 rule? I'd love to hear how you understand this rule, especially as someone who is, you said, more in the beginning phases of interacting with it and kind of teasing it apart.

Dr. Disha: Okay, so if you're me, you start by applying for a couple of cards, right? Then you realize hey, this points thing is really quite beneficial. I'd to maximize it. then you start wondering okay, what card should I do next? So when you start looking into it, you come across the 5/24 rule. the way I understand it is that if you want to be approved for a Chase credit card, you must have fewer than five approvals for credit cards within the last 24 months. Is that right?

Devon: Yes. I feel that seems very straightforward, right? So I'm just going to reiterate a couple points here. So this is a rule that is specific to Chase bank. So in the world of credit card points, if you've been following the show, you'll know that there are lots of different flavors of points. There are the different transferable points currencies. There's American Express and Citi and Capital One and Bilt and Chase. so this rule is specifically governing your ability to be approved for new credit cards through Chase.

just you had mentioned, in a nutshell, all it says is that you will not be eligible to be approved for a new Chase credit card if you have opened up five new accounts in the prior 24 months. that sounds really straightforward.

Dr. Disha: Yeah, I mean, that's all well and good. Yeah. But okay, so when I actually started thinking about it though, what five cards? Does the card that I'm applying for now count in the five? What about my spouse? What if I'm an authorized user? There's so many questions that you start coming across when you actually start to think about it. So Devon, please, break this down.

Devon: I think those are all the critical questions, and I want to get into each and every one of those. But before we actually start teasing apart this big, important question of okay what actually counts towards these five new accounts and what doesn't is let's just take a momentary step back because I think there's one thing that we need to cover first, which is that next question.

Whenever I hear about a rule honestly, whether it's points related or just any rule in general, because I tend to be a little contrarian or I don't like being told what to do. I think my initial impulse whenever I hear rule is to say okay but why? Why does this even matter? Right? Is this a rule that I actually want to follow?

So I think it's very common for people when they hear about this rule, it's really natural to then wonder okay so what? Is this actually going to impact me? Why does it matter that I know what my Chase, quote unquote, 5/24 status is? Why does it matter if I've opened up seven new accounts in the last 24 months?

So why does it matter to you? Let me ask you, again, from where it just where you're sitting in your own personal experience and thinking about the cards that you may want to open up. One, I won't even assume. Do you even care about this rule? If you do, why do you care about it?

Dr. Disha: Well, first of all, I definitely care about it. Because, like I said, I've been sort of dabbling in the point space and opening up cards every year or so to get the points to travel. I love traveling. I love that I haven't paid full price for a trip in I don't know how long. It's amazing to save the money, right?

But I opened up a Chase sapphire Reserve. I opened up an Amex platinum. I have an Amex Marriott Brilliant, a Chase World of Hyatt, and a Chase Freedom. I have a Wells Fargo card that I kept around just because it has long history. I started when I was back in college. So anyway, so those are the cards I have.

So I've started to really open up cards. now I want to apply for another one because we're planning a trip to Spain. I'd like to have some points to play with in order to maximize that trip. Now I'm getting to the point where I have so many cards that I am starting to run into this rule.

I've realized that Chase points are really flexible and helped me get a lot more of the brands that I want because they have so many transfer partners, right? Amex points don't seem to build up as quickly and don't seem to transfer as well, at least from my perspective. So I still find that Chase is, the points are the most powerful currency in the marketplace. What do you think Devon?

Devon: Yeah, there's some of that I agree with just, again, from my own personal experience. I don't think all of that is exactly how I feel, but I think you bring up some really important points that we should dig into.

So just speaking from my own perspective, I've been in this hobby for like nine or 10 years. so some significant things have changed over that period. When I first started getting into points, this rule did not exist. I can distinctly remember the very first reports of this rule coming out and the fact that in the very beginning, it didn't apply to every single Chase credit card. There were some cards it did apply to. So it was still kind of a free for all if you wanted to get any of the other ones. then it just got rolled out more and more and more.

But all of that is to say that when I first started in this points world, there were not the same restrictions as there are now. But at that time, Chase was still a very popular points currency. that was one of the first points currencies that I got into. Actually, as time has gone on, Chase points have become more valuable to me because of the way that my personal travel patterns have changed.

what I mean by that is that for the majority of the time that I was really in points, for probably the first six years that I was doing points, my travel was very much focused on personal solo travel. I was traveling just for myself. I was traveling a lot for conferences internationally. so I really cared about number one, being able to use points for long haul business class flights for one person.

That's a very different priority and a very different game than where I am now, which is now having two little kids. when we do travel as a family, one of my highest priorities now is actually hotel stays. Before, I didn't care where I stayed. I was like honestly if it's in a location I need, has a door that locks, I'm fine. I don't care about luxury. I don't really care about a lot of bells and whistles. I wanted to save all my points for flights.

nine years past, my life looks a little bit different. I still love long haul international business class flights, but really kind of needing certain aspects of travel when it comes to hotel stays with my family. What happened for me is I really started to see the value, personally, of Hyatt points when it came to hotel stays or my family's travel patterns. It doesn't mean it's going to be everybody's priority, nor does it have to be.

But what I realized, and this does speak to one of the points that you were making, is that there are so many different options of points earning credit cards on the market. None of us have every single points earning card. I don't care who you are. Even when this is what you do full time for your business, when this is your passion, when you have a lot of cards, none of us have every single rewards card.

so we all have to start making decisions about what are the cards that make the most sense for me, right, based on the travel partners I want to have access to or based on what I spend money on, and therefore, based on the cards that will give me the most amount of points return for my expenses? That Venn diagram, where does that overlap?

So for me, the transfer partners that Chase offers are incredibly valuable. I think that that's one of the biggest arguments for why people should at least be aware of this rule. It's not that everybody should prioritize Chase points. I don't think everybody should. But if Chase points are ones that are going to be valuable for you then you absolutely want to understand what this rule is because it is going to impact your ability to be able to get approved for Chase credit cards.

So among the world of the transferable points, as I mentioned before, all of the different banks, they all have their own rules just in terms of how many cards they will approve you for, how often you can apply for a new card and potentially get approved. But even amongst all the different rules that exist, in my opinion, the Chase 5/24 rule is the one that is going to be the strictest when it comes to getting approved or denied for new credit cards within a specific bank.

So of course, we're talking about Chase. what it means is that if you open too many new cards in whatever the two years are prior to the date that's the present date then Chase might deny you outright for getting a new credit card. of course, that matters if you want to get Chase specific cards, so you have access to Ultimate Rewards points.

even though there's a lot of overlap in airline and hotel transfer partners amongst the different transferable points currencies, Chase does have some really unique transfer partners that I think if they appeal to you, the widely broad you whoever's listening to this podcast. That if they appeal to you then you do want to make sure that you understand this rule so you can incorporate into your plan for getting new credit cards.

I think some of the most important of those transfer partners, certainly one that is entirely unique to Chase is Southwest Airlines, which a lot of people love. People love Southwest Airlines in terms of not only family travel, but solo travel. They've got a great route network throughout the United States, Mexico, the Caribbean.

if you want to be able to use points for travel on Southwest, your option is Chase. Right? So if that's something that's important to you, then you really want to know oh, my gosh, how do I make sure that I keep myself in a position where I'm still eligible to be approved for new Chase credit cards?

Another one of the transfer partners that I've already mentioned is Hyatt. Even though that is not completely unique to Chase, there's another points currency that transfers to Hyatt which is the Bilt point system. Currently Bilt only offers one single points earning credit card, and it doesn't have really high bonus categories for a lot of different types of spend.

so when you compare Bilt to Chase, as it currently stands, Chase offers way more cards that earn transferable points, and, in my opinion, makes it much easier to earn a lot of Chase points quickly compared to Bilt. so, if you do want to focus on Hyatt then I think being able to get Chase points is going to be very valuable and important for you.

so that's kind of one of the main points to consider is just why anyone would care about this rule is because Chase has some really great opportunities within the points travel world. if those are the opportunities that appeal to you, then you want to make sure that you understand this rule and keep yourself eligible to get new Chase credit cards.

even if you know everything about this rule, I think it's really important understand how it works because Chase actually has I think close to if not a little bit more than 30 different points and miles earning credit cards. That is a lot. We're talking about, even for Chase, that they will not approve you for a new rewards card if you have more than five or more new accounts opened in the prior 24 months.

If you've got 30 options of points earning credit cards within the Chase ecosystem, including the seven cards that earn the transferable Ultimate Rewards points. I think there's around eight hotels specific credit cards between the personal and business credit cards that can earn you points specifically within IHG or Hyatt or Marriott. then around 15 different airline credit cards again, personal and business, lots of different airlines that you can actually get co-branded credit cards through Chase.

Again, none of us are going to get all 30 of those. so if you're going to be limited to getting approved for five new personal cards over the course of 24 months, and you want any of those 30 Chase cards, you really have to understand how this rule works and be able to incorporate it into your card acquisition strategy. So I think it's really important to just cover that point about who even cares about this, or why should I care about this?

I think especially if you're in the beginning of your points journey, it is generally recommended that if there are Chase cards that you want to get, that you focus on applying for those before you branch out into other points currencies. the reason people tell you that is because specifically of this rule.

So now that we've covered that part, let's get back to some of those amazing questions that you were throwing out to me earlier about some of the details of the Chase 5/24 rule. That on the surface I think it sounds very simple and straightforward.

But when you get into the details, it's not going to get super complicated. It's more that I don't think that Chase does an amazing job at telling people very clearly what counts towards your five. Five is the magic number. What counts and what doesn't count? So let's kind of get into those details. if you want to ask me again any of those questions, I think maybe that would be a helpful place to start.

Dr. Disha: Yeah. Okay. So first, if I'm applying for a card, does that count as one of the five?

Devon: It depends. Okay, so let's start by understanding is there a specific card that you are thinking about applying for right now? If so, what's the card?

Dr. Disha: Well, I was thinking about applying for the Chase Sapphire Preferred card. However, I don't think I'm eligible but that's not because of this rule.

Devon: Right. So in terms of the 5/24 rule, one of the things that I think everyone should try to, at like the starting point, is to understand just what is my current 5/24 number? So let's kind of talk about how you would know that and then what gets determined into that.

Because your question about if I'm looking to apply for a new card, is that new card going to count in my 5/24 score? So the answer is probably yes. When people hear this rule initially, I think it's very reasonable to assume that what Chase means is if you've opened up five or more new Chase credit cards in the preceding 24 months, then you're going to be over 5/24.

What I don't think Chase does an amazing job of explaining is that they don't just mean if you've opened five new Chase specific credit cards, okay? What they actually count towards your, we call it the five out of 24 score or five out of 24 status, is that all new personal credit card accounts opened over the preceding 24 months count towards your 5/24 score.

So you can imagine, I've talked to people before who they're just getting into points, and they come to me and they say oh, I should be fine. I haven't opened up any Chase cards ever. it's like no, it's not just the Chase cards. Let's talk about all the cards that you've opened up over the prior 24 months. then you hear that they opened up a Target card and a Macy's card and a Best Buy card and a Nordstrom card because there were sales around the holidays.

what people don't realize is that Chase will count any new personal credit card account that you have opened over the past 24 months as part of your 5/24 score. So if you've opened up a personal American Express card, that will count. If you've opened up, like I said, a store specific credit card, that will count. If you've opened up a Citi credit card or a Capital One personal credit card, those all count towards your five.

so you can actually exceed 5/24 never having applied for a Chase credit card. I think that's one really crucial point that people understand. That it’s not just what Chase credit cards have you opened, which I think is a really reasonable thing to assume. It's any personal credit card that you've opened over the last 24 months will count towards your 5/24 score.

Even, let's say you opened up a new credit card 15 months ago and then after a year, you realized I'm not getting any use out of the card. I don't really want to keep carrying it around. I'm going to cancel the card. Doesn't matter. You opened that card within the last 24 months. So even if you end up canceling it, that will still count as a new personal credit card account that you've opened in the prior 24 months.

Dr. Disha: I don’t like that.

Devon: I know, right? That seems it shouldn't be the case. You should be able to open it up and say hey, I don't actually need this card. Let me close that account down, and then you should get that slot out of your 5/24 opened up again. Chase? Nope, they are not buying that. So they're very, very strict about this.

So one of the things that you might kind of picked up on is that I keep kind of reiterating the point that it's five personal credit card accounts opened over the prior 24 months that count towards your Chase 5/24 rule. The sort of converse of that is that most business credit cards will not contribute to your 5/24 score.

So say you're running a business, and you've opened up 10 business credit cards over the last two years. Most of those will not count towards your 5/24 score. There are a couple of exceptions to that. But within sort of the major transferrable points type of credit cards you could get, this is what's really interesting. That if you get a Chase business credit card, that will not add to your 5/24 score.

Dr. Disha: That's interesting.

Devon: Isn't it fascinating? Yeah. American Express business cards will not add to your 5/24 score. One of the notable exceptions is that there are some Capital One business credit cards that will contribute to your 5/24 score. So if you are in business and you're looking for business credit cards, and you really liked the Capital One points currency system and want to get a Capital One business card, do your due diligence before you apply for it. Make sure that the one that you're applying for, just know whether or not it is one of the ones that counts towards 5/24. Okay.

Dr. Disha: Devon, how do I even like find out what is counting? Where do I go to figure out if something is on this 5/24 radar?

Devon: Yeah. So I think there's kind of two answers to that question. If you're just kind of doing just research so that you can learn about this more, I think you can find so much great information just by googling it. Right? So, you can absolutely google what cards count towards 5/24. You'll be able to come up with a lot of lists.

But if you want to look specifically at your own record, this is where having access to your own credit report is really, really helpful. Because you can pull your own credit report and look back at what accounts are reported as having been opened on your personal credit report in the prior two years. You will notice that there are business credit cards, if you've opened in the last two years, that will not show up on your credit report. So that's a really good indication that it's one of those cards that does not count towards your 5/24 score.

So that's a very easy way from a personal perspective to get a sense of wait a minute, if I have been opening up business credit cards, have they been adding to my 5/24 score? If you don't see that account listed on your personal credit report, it will not have counted towards your 5/24 score.

One other thing that is really useful for people to know in terms of what counts are what adds to your 5/24 score and what doesn't is that what counts towards your 5/24 score is specifically, again, new credit card accounts. So if you've opened up other types of credit or loans, that will not count. So if you have applied for student loans, if you have gotten a mortgage in the last two years, if you have gotten a car loan or a home equity line of credit in the last two years, all of those forms of credit those do not count, specifically to this five out of 24 slots that you have open to you.

Dr. Disha: Okay, what about if I'm an authorized user on my spouse's card? Does that count?

Devon: Yes, such a good question. Again, because I think, let's talk about kind of regular. I don't want to use the regular. I feel that can be kind of othering. Let's talk about typical kind of behavior versus what you do when you get into credit card points and miles.

I think very typical behavior for people, especially if you have a spouse or a partner. Very typical behavior is one of us will open up a credit card, and we'll make our partner the authorized user on the account. So they have their own physical copy of the card. If we have joint expenses or joint finances, that is a very logical and simple streamlined way of managing things.

So I think a lot of people come into the points world having it be very routine for them to add their partner or spouse as an authorized user on their primary accounts and vice versa.

Dr. Disha: Yeah because that helps me meet the bonus categories. If he has one then he can just charge his stuff. then we can meet the bonus

Dr. Disha: Absolutely. Makes perfect sense, right? Here's what you need to know, again, specifically about authorized user accounts and how they affect your Chase 5/24 status. So if we're talking about a personal account that's being open.

Let's say you open up a credit card and you add your partner as an authorized user. Your partner did not apply for that account as the primary account holder. So you would think oh, they should be safe in terms of their 5/24 score. No, no. Chase will actually consider authorized users as qualifying as one of those five out of 24 slots.

So, again, let's just from a very simple example, let's say you opened up five personal credit cards over the last 24 months. You made your partner, the authorized user on all five. Your partner hasn't opened up a credit card of their own in five years. Their 5/24 score would be five because all of those authorized user accounts would contribute as individual one, two, three, four, five out of the 5/24 slot.

Now there is a little asterisk to this, which is that let's say your partner now decides they want to go and apply for a Chase credit card because they're hearing from you how amazing the points are. They're learning everything from you. They want to have their own primary accounts as well.

So if they just go through the very standard procedure of applying for a Chase personal credit card online, they'll type in all their information, submit, they will most likely get denied because Chase’s computer algorithm will, again, see those five authorized user accounts and just count those all as new accounts for your partner.

So if they get denied, what they can actually do is then call Chase and speak to a real human. Bypass the computer algorithm part of the whole thing and explain listen, I know it looks like I have five new accounts opened over the prior 24 months, but those were all authorized user accounts. so Chase will manually reconsider that kind of then deduct any authorized user accounts kind of off of the 5/24 score, but it is something that has to be considered manually.

so that's why. Is it the end of the world if you've been adding your partner as an authorized user? No, it just means they shouldn't be surprised that those authorized user accounts will get included in a 5/24 score, but they can get Chase to kind of manually backtrack on those. But if you're a couple, especially if you're both wanting to apply for your own personal credit cards and you want to be able to refer one another, in general, it is good practice not to just automatically make each other an authorized user on every single one of your new accounts.

Dr. Disha: That's really good information. Thank you. I'm going to have to take that back and change our ways.

Devon: Listen, for all of you listening, you're going to probably hear some things on this episode where you're going to say oh, I've already done that. that is fine. I think that's the whole purpose of being in this hobby is that nobody knows all of the things from day one, right? This is just any other skill where it's a process of building and accumulating your knowledge. we are all going to find out some pieces of information and say oh, wow, didn't know about that. now I would do things a little bit differently. that's also not a problem.

But I think as much as you can kind of equip yourself with the information that's going to be really helpful and valuable from the outset, it does make it easier for you then when you are making some of those decisions. So if you've been adding your partner or yourself as one of your partner’s authorized users, it's not the end of the world. But now you'll know and understand if you go to apply for a Chase card and you get denied, it could just be because of those authorized user accounts taking up your very valuable five out of 24 slots.

Dr. Disha: Got it. Okay, well, I love that we can actually do something about it, and it's not the end of the world. So thank you for making me feel better.

Devon: This one is not the end of the world. Yeah.

Dr. Disha: All right. So now that we know about the 5/24 rule, what's the best strategy? What's the best order to apply for cards? Most specifically, I want to know what's the next card I should apply for?

Devon: Yes, I think that is a brilliant question. I think this is really the main reason to understand, again, just what this rule is, and to feel really comfortable with knowing how it works because it most likely is going to factor in to how you plan to apply for credit cards.

so kind of want to break this up into two different areas. I want to talk first about the scenario where you figure out what your own personal 5/24 score is and you're under 5/24. So I want to talk about that kind of scenario first. then we're going to talk about the scenario where there's probably some people listening who either intentionally or unintentionally are now over 5/24. they might be wondering okay well, what should I do? Right? That ship has already sailed. Now, how do I start making decisions that incorporate in this whole situation of the Chase 5/24 rule?

So let's start with the people who are currently under 5/24. I think the first kind of, it seems obvious, but a lot of people don't deliberately make this decision is just to think about do I even care about getting Chase credit cards? Because if you don't care about the Chase card system, then this rule doesn't matter. You can literally just turn off this episode. You don't have to think about Chase 5/24 status anymore. You don't need to understand it. This is really only relevant if you do want to get approved for new Chase credit cards.

So number one, if you're under 5/24, really consider do I care about applying for Chase credit cards? I'm going to assume the answer is yes. Because I think there's a lot of compelling reasons why a lot of people would probably want at least one of these cards. But if the answer is yes then I think the very first step is that don't apply for any new personal credit cards until you come up with your priority list of within that Chase ecosystem of cards.

I mentioned, there's over 25, almost 30 or so different rewards credit cards. You want to be really clear on what are the Chase credit cards that you want to apply for? Because you're not going to apply for all 30 of those, but you're going to want to know which are the ones that matter to you and in what order. Because you want to apply for the one that matters the most to you first while you have the best shot of getting approved for your Chase credit cards.

so that, I think, is why you hear very kind of colloquially in the points world that you should start with Chase. People aren't saying that because the other point systems are bad. People are saying that because once you hit, again, the five new personal credit card accounts opened in 24 months, then you are locked out of Chase until you allow enough time to pass for your number to fall below 5/24. So number one, if you do want to get Chase credit cards, make a list of the ones that you want and their order of importance to you.

One thing that we haven't touched on yet that is really important to understand about this rule. I kind of alluded to it before, but I want to be very explicit about it here is that you have to be under 5/24 in terms of your Chase score to be able to be approved for Chase business credit cards if you want to get them. But what's interesting is that after you've been approved for them, they don't add to your score.

So let's pretend you're at four out of 24 cards opened in the last 24 months. Within the Chase cards that you want to get, you want to prioritize applying for any of the business cards first. So let's just pretend you're at 4/24. you've identified you want all three Chase Inc Business cards. There's three different versions of the Chase Inc Business card. They all are great in different ways. Let’s say you've decided you want all three of those.

Well, at 4/24, you are eligible to get approved for a new Chase card. So let's say you add the first one, the Chase Inc Business preferred. You get approved. Great. Well, your Chase, five out of 24 score hasn't changed. You got approved for the card, but it's a Chase business card so it doesn't add to your score. So you're still at 4/24.

So then you wait an appropriate amount of time. You go for the second one, Chase Inc Business Unlimited. You get approved, wonderful. Your Chase score is still four out of 24. So you have to be under 5/24 to get approved for a Chase business card. But once you've been approved, it does not add to your score.

Dr. Disha: That’s awesome.

Devon: Yeah, it's amazing. But this is why you want to make sure that you understand these little, little tricky nuances, right? Because you think oh, if I'm at 4/24, I have one slot left out of my 5/24. But if you're applying for those Chase business cards, that one slot can actually carry you through getting approved for multiple business cards. It's not until you get approved for a new personal card that you're going to reach 5/24.

So if you're currently under 5/24 and you want to get Chase cards, again, you want to prioritize the ones just that are important to you that you want to get and apply for any of the Chase business cards first. That will preserve those five out of 24 slots. Then once you've gotten those, especially if you're bumping up against that 5/24 number, then you can pick okay, what is my priority in getting the personal cards? Because those will count towards your 5/24 score once you've been approved for them.

So this is the general approach that I think makes sense if you're under 5/24. We prioritize the Chase cards that we want to get. if we get very close to going over 5/24 that you want apply for the business cards before you apply for the personal cards.

remember that most other bank’s business cards will not add to the 5/24 score. So you can sprinkle in over time. If you want to add an American Express business credit card, or if you want to add in just a business credit card from a different bank, you can do that along the way. those are most likely not going to add to your 5/24 score.

But let's talk about that second group of people. So you're listening to this podcast. again, you realize either intentionally or unintentionally, you were at or over 5/24. What do you do then? How does this rule impact the way that you make decisions moving forward?

Well, I think the first step is similar to the people who are under 5/24, which is decide if it even matters to you. Are there Chase cards that you even want to get or not? If there's not, similarly doesn't matter, right? It's not going to apply to you.

But if you are over 5/24, and you do want to be eligible for Chase credit cards, then what you want to do is get very clear about understanding and knowing okay when are you going to fall under 5/24? it's just a math game, right? You want to look at if you've opened five new credit cards over the prior 24 months, great.

When is the oldest of those five credit cards going to be 25 months old? Because then it falls out of the 24 month period, and then you would drop down to 4/24. So you do want to know what your timeline is in terms of the cards that are currently counting towards your five out of 24 score. Essentially, how old are they in months? Do you have a bunch of cards that are all three months old? Or do you have cards that are 20, 22, 23 months since you opened up the account?

You want to know when your personal 5/24 score is going to fall below five new accounts open because that's going to open up a new slot for you. So then you will be eligible to apply for Chase cards. I would argue then the approach is very similar to what I just talked about. That once you fall under 5/24, know that any Chase business credit cards will not add to your score.

So I think it makes sense to prioritize applying for those first because as soon as you add in another personal Chase card, that is going to contribute to your 5/24 score. So then it just becomes a timing game of knowing how long it's going to be until one of your 5/24 slots opens and being very careful during that time period to not open up any new personal credit card accounts.

Dr. Disha: Yeah, that makes a lot of sense. So you wouldn't go through and start closing out accounts.

Devon: You know what? I personally wouldn't for a lot of different reasons. Number one, like we talked about before, that's not going to clear the account off of your 5/24 score. So that you don't get the benefit of then opening up one of your 5/24 slots from that. I think that's probably the most crucial point as it comes to the topic that we're talking about today.

then just kind of more broadly in general, I almost never advocate for people to just outright close down a credit card account because that can actually have a negative impact on their credit score. So I think what's better to do if you have the option is to do what's called a product change where you can actually switch that card that you're holding to a different version that that bank issues.

oftentimes, that would be a different version of credit card that has no annual fee. So it's not actually going to cost you anything to keep that card account open. But you, for the most part, do want to keep your credit card accounts open because of the positive impact that that actually has on your credit score.

Dr. Disha: Okay, so what if my, so my husband, for example, downgraded a Chase Sapphire Preferred to a Freedom. Can he then apply for another Chase Sapphire Preferred later on down the line and get the bonus?

Devon: Yes. it depends. So speaking from his 5/24 status, he would need to be under 5/24 to get approved for any new Chase card. So that is going to be sort of the first decision point in the decision tree is okay, is he under 5/24? Is he even eligible to get approved for a new Chase credit card?

Then if the answer is yes, this is where then kind of knowing the additional rules that a bank may have around their specific credit cards comes in handy. So for Chase specifically, they have a rule about if you have held a Sapphire card, so either the Chase Sapphire Preferred or the Chase Sapphire Reserve, those are the two personal Sapphire credit cards that Chase offers.

If you have earned a welcome bonus on a Sapphire card, you cannot earn the welcome bonus on another Sapphire card until 48 months have passed. So it really depends. Again, it's all about the timing. It depends on when he earned the welcome bonus for his original Chase Sapphire Preferred. So if he product changed to a freedom, that's a great option. As long as it's been 48 months or more since he originally earned the welcome bonus on the Chase Sapphire Preferred, then he would be eligible to get either a new Chase Sapphire Preferred or a new Chase Sapphire Reserve.

If it's been less than 48 months, he could still apply for a new Sapphire card and get approved, he just wouldn't be able to earn the welcome bonus on that card, which I think a lot of us would agree. We want to earn those welcome bonuses. Right? We don't want to sacrifice those because they are significant.

Dr. Disha: Yeah. Okay, that makes a lot of sense. That's why I wasn't eligible for the Preferred because I have the Reserve. Yeah.

Devon: Exactly. that's such a perfect example of a bank specific rule. So of course, we are not going into every single possible bank rule for all of the different banks and credit cards. But that is a reminder, and I think a really timely one.

That whenever you are thinking about applying for a new rewards card, I do think that it makes a lot of sense to spend a couple of minutes just doing some research around what are the specific rules of this bank’s credit cards in terms of what cards are you allowed to have open at the same time? Or how long do you have to wait in between certain applications to improve your approval odds of getting a new card? again, that is really, for the most part, straightforward google-able stuff. So I think that it's a lot easier to find that information now than it traditionally had been years and years ago.

Dr. Disha: So I had two cards that are in my 24 rule right now are the Amex Marriott Brilliant and the Chase World of Hyatt. I have otherwise the Chase Sapphire Reserve. I'm an authorized user on my husband's Chase Freedom, and I have the Amex platinum. What Chase card would you go for next personally?

Devon: Okay, so again, this doesn't mean this is going to be right for everybody. But the way that I think about this, especially thinking about the perspective of our topic today, is I always start from the place of what is the 5/24 score that we are dealing with now? as you had mentioned, you have actually only opened up to personal accounts in the prior 24 months. So your Chase 5/24 score right now today is two out of 24.

Which is amazing because what it means is that you have at least two slots open to potentially get new on personal credit cards, again, from any issuer, but we do want to focus in on Chase in terms of maximizing the value that you're going to get from those spots. so you already have a Chase Sapphire Reserve card, and you said that you're an authorized user on your husband's Chase Freedom card. So this is the one that he had product changed from his Chase Sapphire Preferred.

Now I'm going to ask you a question, which you may not know the answer to, which is totally fine. But when he product changed that Chase Sapphire Preferred to his current Chase Freedom card, was it the original Chase Freedom card or is it a Chase Freedom card that has another word?

Dr. Disha: Oh, goodness.

Devon: you don't even have to know, but here's why I'm asking. Because the Freedom cards that you can actually apply for currently as new accounts, there's really only two that you can apply for, again, as a new primary account holder. one of them is called the Chase Freedom Flex and one of them is called the Chase Freedom Unlimited. They're both really great cards, but they work very differently.

the reason I asked you the question about which one he has is because, in my opinion, for a couple who shares their finances and shares some of their credit cards and their credit card points, it doesn't actually make any sense for each individual in a couple to have their own Chase Freedom Unlimited card. I don't think there's an enormous benefit to that.

But for that other card I was talking about, the Chase Freedom Flex, it can actually be really beneficial for each partner to have their own Chase Freedom Flex card. I'm not going to get into all of the details on that right now because that's actually going to be the topic of my next podcast episode that's going to be coming out in a week.

Dr. Disha: Love it.

Devon: so you'll get all the spoilers. Spoiler alert, but the Chase Freedom Unlimited and Chase Freedom Flex card, they just have different bonus categories in the way that they work. so the very simple answer right now is that if he already has a Chase Freedom Unlimited, I really think, for the most part, families only need one of those in the family. So I would not get that card if that's the one he has.

Dr. Disha: That's the one he has.

Devon: Okay, so that's why this is so good to know. I then would probably not recommend that you get your own Chase Freedom Unlimited card unless Chase Freedom Unlimited right now, and we don't know how long this is going to continue to be offered.

They're actually offering a special promotion right now where if you get approved for a new Chase Freedom Unlimited card in addition to just the way the card usually earns points. Right now they have a promotion where they're offering, in addition to that, that you can actually earn five times points on grocery purchases for the first year that you hold the card. I think up until about $12,000 spent.

I say that because Chase actually does not have an amazing rewards credit card that bonuses grocery just baseline. so the fact that if you applied for your own Chase Freedom Unlimited right now, I think that would be the compelling reason to go for it for at least that first year that you hold the card is to benefit from that grocery bonus.

But aside from that, I would also consider whether or not you want the Chase Freedom Flex. I think that when you hold the Chase Sapphire Reserve card, like you do, it can make a lot of sense to have one or both of those Freedom products. They can be really, really strong points earning cards. so if what you want to focus on are additional Chase cards, they're going to be able to earn those really valuable flexible points. Those are some of the cards that I would look at.

I know you also run a business. so certainly Chase Inc Business credit cards can be really, really valuable. so depending on what your business needs are, one of those cards could also be really fantastic for you. so you have a little bit of room to play since you're only at 2.24 right now. So again, if you got one or two of the Chase Inc Business cards, you would qualify because your 5/24 status is really low, and they would not add to your overall 5/24 score.

so you have the really advantageous position of kind of looking and thinking do I want just one new Chase Card? Or would it potentially fit my expenses and what I want to get out of my points to consider getting more than one Chase Card? You’re actually eligible to get them. So congratulations, that's a great position to be.

Dr. Disha: Yeah, that's awesome. I'm actually trying to get the next Delta level with my Amex Delta Business card. So I'm going to focus on that. then I'll probably, right now, go for the Freedom Flex and try to get those bonus points. I will be listening to your next episode for all the details on that.

Devon:  Absolutely. For anybody who's wondering sort of that question of if I have to pick between one of the Chase Freedom cards, which one is better? It's a question that honestly drives me nuts, and I have very strong opinions about it. so that's we're going to be covering next week.

But I think so far for today, we have covered all of the really important points that I think are valuable for people to begin to understand the Chase 5/24 rule, what it is, why it matters, how you can actually figure out what counts and what doesn't so that you can make plans that work for you.

I think the last thing that's just useful to touch on is just a really practical point, which is for those of you listening to this podcast, and you're wondering oh, how do I know what my 5/24 score is? What if I haven't been documenting for the last two years the personal credit cards that I've been opening? It's really straightforward. I'll tell you kind of the way that I like to keep track of my 5/24 score. But Disha, tell me how do you keep track of your 5/24 score? I think it'd be helpful to hear different approaches that people take.

Dr. Disha: Yeah, I mean, honestly, I hadn't been tracking it. I just pulled it off yesterday.

Devon: Honest answer.

Dr. Disha: Yeah, I mean, I don't try to churn too many cards. that's why I still consider myself a kind of a beginner in this game. But I pulled off my credit report. I went to Equifax and looked at my revolving accounts.

Devon: Yeah. I think that that is an absolute perfect way to do it. Everyone has access to their own credit report. so whether you want to actually access it the same way that Disha did, and then you can print it up, and you literally just start with your present day, your newest account that was opened. You just count how many cards or how many accounts are showing up on your credit card if you count back 24 months. It's very, very straightforward.

That actually is how I to find my own 5/24 status as well. I also, just because again, I have been doing this for a long time, and I'm compulsive about organization. I have just a spreadsheet where I to keep track of all of the accounts that I've opened, personal and business, when I open them, details about the accounts.

so it's easy for me just to now open up my spreadsheet, because one of the things I have them all listed in order. so it's very easy for me to just eyeball that and see what my status is. so the reason that I was asking you this is for people to hear different approaches.

There are some apps that you can download on your phone, and you can enter in a lot of this information and then the app will tell you what your 5/24 score is. I don't think that that's better or worse way of doing it. I think it's just personal preference of how do you to interact with information. I'm old. So things like a spreadsheet make sense to my brain.

Dr. Disha: I love spreadsheets. I'm totally there with you.

Devon: I'm not super reliant on super fancy apps, even though I'm sure they're amazing for the people who can keep up with them. I think it's just a lot of information overload for my brain. so going just very old school and having your own spreadsheet that you update manually or just printing off a credit report can make it really easy for you to understand your 5/24 score.

So I hope that this episode has been useful for you all, again, to understand one of the most important rules in the points credit card space. I just want to thank you again, Disha, for joining me. This was certainly, at least for me, so much more enjoyable to have a conversation about than my just trying to read off pages and pages of notes about a really boring rule. So I really appreciate your coming on, all of your amazing questions. Thank you so much.

Dr. Disha: Devon, thank you so much for having me. This was a very selfish matter on my part because I'm a big fan of yours. I've been waiting to pick your brain about this question. So I will be listening to your next episode about the Chase Freedom cards and Unlimited versus Flex. I will be making my decision based on your sage advice. So thank you so much for what you're doing for our community. thank you so much for having me on.

Devon: Absolutely. for those of you listening who are really interested to learn more about the work that you're doing, where can people find you? Of course, we'll include all this information in the show notes, but I'd love for you to tell people how they can learn more about the work that you're doing.

Dr. Disha: Yeah. I'm at Finding Financial Freedom with the Frugal Physician. That's my podcast. My website is www.TheFrugalPhysician.com. I'm also available on Facebook, Instagram, Twitter. Not on the new Twitter yet, Facebook Twitter. Threads is it? I'm still old. We'll be there soon. But come find me.

Devon: All right, thank you so much. everybody, I will see you back here again next week. Have a fantastic day.

Thank you for joining me for this week's episode of Point Me to First Class. If you want more tips on turning your expenses into travel, visit pointmetofirstclass.com to learn more. See you next week.

Enjoy the Show?