In general, most business card approvals do not count toward your 5/24 total. That includes business cards from American Express, Chase, Citi, Bank of America, and more. The reason? Business credit card accounts typically don't show on your personal credit report.
According to most recent data points, you will not technically be below 5/24 until the first day of the 25th month after your fifth account was opened. For example, if your fifth most recent account was opened on Oct. 17, 2021, do not apply for a new card until at least Nov. 1, 2023.
Many card issuers have criteria for who can qualify for new accounts, but Chase is perhaps the most strict. Chase's 5/24 rule means that you can't be approved for most Chase cards if you've opened five or more personal credit cards (from any card issuer) within the past 24 months.
It's generally recommended that you have two to three credit card accounts at a time, in addition to other types of credit. Remember that your total available credit and your debt to credit ratio can impact your credit scores. If you have more than three credit cards, it may be hard to keep track of monthly payments.
It is not bad to have a lot of credit cards with zero balance because positive information will appear on your credit reports each month since all of the accounts are current. Having credit cards with zero balance also results in a low credit utilization ratio, which is good for your credit score, too.
In general, it's better to leave your credit cards open with a zero balance instead of canceling them. This is true even if they aren't being used as open credit cards allow you to maintain a lower overall credit utilization ratio and will allow your credit history to stay on your report for longer.
If you're at a Chase branch and told (without prompting) that you have been pre-approved for a credit card, you may be able to get approved in branch, thus getting around 5/24. Some data points also suggest submitting a paper credit card application in a branch location may also bypass 5/24.
Whenever you do decide it's time to open a new card account, it's a good idea to wait at least 90 days between new credit card applications—and it's even better if you can wait a full six months.
Generally, all personal credit cards, including charge cards and retail store cards, are factored into your 5/24 count. In addition, business cards with TD Bank, Capital One and Discover are included.
Credit card churning is the process of opening cards for the sole purpose of earning welcome bonuses or other benefits. Usually, it involves closing cards after the bonus posts to your account and before the next annual fee is charged.
Credit experts advise against closing credit cards, even when you're not using them, for good reason. “Canceling a credit card has the potential to reduce your score, not increase it,” says Beverly Harzog, credit card expert and consumer finance analyst for U.S. News & World Report.
Does AmEx have a 5/24 rule? No; in fact, the AmEx welcome bonus rules work differently than Chase.
The Bottom Line
Having a lot of credit cards can hurt your credit score under any of the following conditions: You are unable to keep up with your current debt. Your outstanding debt is more than 30% of your total available credit. You added too many cards in too short a time.
The Chase 5/24 rule is an unofficial policy that applies to Chase credit card applications. Simply put, if you've opened five or more new credit card accounts with any bank in the past 24 months, you will not likely be approved for a new Chase card.
You should only keep items you need in your wallet, like your driver's license, credit and debit cards, and your health insurance card. On the other hand, you should avoid carrying items like your Social Security card and your birth certificate with you unless you need other forms of ID.
There's no such thing as “too many” hard credit inquiries, but multiple applications for new credit accounts within a short time frame could point to a risky borrower. Rate shopping for a particular loan, however, may be treated as a single inquiry and have minimal impact on your creditworthiness.
The biggest risks of applying for multiple credit cards at once are: The applications will lower your credit score. It can lead to credit card debt. You could have trouble managing your credit cards.
There isn't a set number of credit cards you should have, but having less than five credit accounts total can make it more difficult for scoring models to issue you a score and make you less attractive to lenders.
2/30 Rule. The 2/30 rule says that you can only have two applications every 30 days or else you'll automatically be rejected. If you don't have a high credit score (700+), your chances of getting approved for the Chase Sapphire Reserve® is slim. Chase usually looks for a great credit score or a banking relationship.
Bottom line. A charge card can be a good choice if you want expanded (but not unlimited) buying power and everyday rewards. Plus you'll be able to improve your credit score by using your card responsibly and paying on time every month.
When you've been pre-approved for a credit card offer, this means that you've been prescreened based on specific criteria, including your credit and payment history. Lenders prescreen consumers by requesting a soft inquiry to check credit and determine who qualifies.
Bank account information is not part of your credit report, so closing a checking or savings account won't have any impact on your credit history.
In short, yes—paying off a personal loan early could temporarily have a negative impact on your credit scores. You might be thinking, “Isn't paying off debt a good thing?” And generally, it is. But credit reporting agencies look at several factors when determining your scores.
Will opening a new credit card hurt my credit scores? Applying for a new credit card can trigger a hard inquiry, which involves a lender looking at your credit reports. According to credit-scoring company FICO®, hard inquiries can cause a slight drop in your credit scores.