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Signing up for credit cards is, by far, the fastest and easiest way to amass a fortune in points and miles. Chase, in particular, often offers the best welcome bonuses. They also offer a number of co-branded cards that you can’t get anywhere else (Hyatt, IHG, Southwest, United, etc.). Unfortunately, Chase’s 5/24 Rule makes it difficult to get all of the cards you may want. There is, though, an approach where you can keep signing up for cards even while staying under 5/24.
What is the 5/24 rule?
In a nutshell: if you apply for a Chase credit card, they will deny your application if you have opened 5 or more credit card accounts, from any issuer, in the past 24 months.
To determine your 5/24 status, see: 3 Easy Ways to Count Your 5/24 Status.
The trick to flying under 5/24
More:
According to Doctor of Credit, the following banks do not routinely report business accounts to the personal credit bureaus:- American Express (except for Canadian Amex)
- Bank of America
- Barclaycard
- Capital One Spark Cash
- Chase
- Citi
- FNBO
- Navy Federal CU
- PNC
- US Bank
- Wells Fargo
The following banks do report business cards on personal credit reports (and therefore do count towards 5/24):
- Capital One (except the Spark Cash Plus charge card)
- TD Bank
- UBS Bank
So, the trick is simply to focus applications on business credit cards from the banks listed above that do not report them to the personal credit bureaus.
Other benefits
When you apply for business credit cards, banks do issue hard inquiries that appear on your credit report. And those do have a small short term negative impact on your credit score. That said, when business cards do not show up on your credit report they won’t hurt your average age of credit (good!), and they won’t impact your credit utilization (this can be good or bad, depending upon how much spend you put on these cards).
Regarding credit utilization: Usually, signing up for new cards helps your credit score in the long run by making more credit available. This way, if your spend remains constant, your credit utilization ratio gets lower and you get a better score. If you plan to spend a lot more than before, though, the spend can hurt your utilization ratio and would therefore hurt your credit score. With business cards that don’t show up on your credit report, neither happens: your available credit does not appear to be larger and spend put on the card is not reported. For those who manufacture spend, this is an obvious big plus, but for others it may be a small negative.
Are you eligible for business cards?
You must have a business to apply for business cards. That said, its not uncommon for people to have businesses without realizing it. If you regularly sell items on eBay, for example, then you have a business. Similar examples include: consulting, writing (e.g. blog authorship!), handyman services, owning rental property, etc. In any of these cases, your business is considered a Sole Proprietorship unless you form a corporation of some sort. If you want to keep things simple, you can use your own name as the business name and your own social security number as the business Tax ID.
Finding business card Best Offers
To help people find credit card offers, I usually point them towards our Best Credit card Offers page. In this case, though, you may prefer our page dedicated to business card offers:
Note that this page includes the banks that report business cards to personal credit bureaus. If your goal is to get cards that don’t add to 5/24, make sure to ignore the cards from Capital One, Discover, and UBS.
More Info
For more info about credit scores and inquiries, please see: Free Credit Scores, Reports, and Monitoring: Complete guide.
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Well that works fine for people with businesses but not for most people. Sure you can “create” a business but then you are on the hook to report it on your taxes (on personal return if sole proprietorship or separate return return otherwise). Also the IRS states that for a business to deduct losses there must be a reasonable expectation and attempt at earning profit (within 5 years as I recall from when I had my consulting business).
Wait you don’t “really” have a business? Then you are scamming the credit card company and any bank where you open a business account. Too many on here act like business cards are a perfectly legal and acceptable account for anyone to have. That isn’t the case. I agree bloggers and others really do have businesses and can get them (especially since you should always keep business and personal expenses separate). However, many people that read this blog (and others) simply don’t qualify for a business card without committing fraud.
Sorry, I don’t agree with your assessment. If you do something that earns a profit, you are supposed to report it on your taxes regardless of whether or not you declare it as a business. Declaring that you have a sole proprietor business doesn’t change your tax requirements in any way.
I don’t think there is anything fraudulent about realizing that things you do anyway are actually businesses. Many people have rental property and don’t realize that that’s a business. Same for those who sell things on Ebay or Etsy, those who do consulting, etc.
I don’t disagree with anything you posted. Sorry for any confusion. I’ve owned vacation rental property and it was definitely a business. As I recall I had to use Schedule C on the tax return for income/expenses/depreciation associated with that property. I also set up and ran a national consulting business which I established as a sole proprietorship (could have gone S Corp, LLC, etc.) which had its own tax ID number but I was able, as a sole proprietorship, to include that on a form of my personal tax return.
The examples you gave are all legitimate ways to have a business. Others could be gig economy (Uber driver, Doordash, etc.) workers. Others can’t be just because you call them a “business”. For example I gamble a lot but it is a hobby and I have to file tax returns on my income and can use losses to offset that income but can’t deduct travel and other expenses which I could if I declared myself a professional gambler (typically poker or sports/horse betting) and kept all the records.
Basically I think we are saying the same thing. My issue is that business credit cards are widely promoted on blogs and many people don’t have outside income or self employment businesses where they can legitimately apply for a business card. If you read comments there are plenty of people that have a W2 job with nothing else that could qualify as a business and they still apply for and get business cards (making up whatever info may be required). That is why I call it fraud. If you legitimately have a business or can separate a revenue stream into something you would classify as a business then definitely get them but I feel many on there blogs just apply when they really don’t meet the qualification for a business. Little, if anything, is ever posted about the qualification criteria to get a business card and consequences if people aren’t truthful.
Honestly, I think you’re looking for a crusade where there isn’t one to be found. If issuers weren’t interested in approving people with very small businesses that expect to earn low-to-no revenue, they wouldn’t approve those customers. I don’t encourage anyone to lie but rather not to ignore the fact that the banks are willing to extend credit even to those with much smaller businesses than they may realize. Whether you expect to earn $1 or $1 million and whether it’s a side business you engage in now and then or it’s a major international conglomerate doesn’t make it any more or less legitimate. There’s nothing fraudulent about having a very small side hustle and leveraging that into opportunities for rewards and many people can and do.
In terms of “meeting the qualification” for a business, I think you’re just applying your own vague personal set of criteria as to what “qualifies”, but I’d argue that it’s up to the bank to determine the criteria that qualifies one to be approved for one of their business cards and how you or I feel about that criteria isn’t all that relevant.
I called and spoke to two reps from US Bank because I was interested in a business credit card opened under my S Corp. They both said that they DO report to consumer credit reports, which confused me since every website I’ve seen including this one says they do NOT. Did it change? Can you try to find out? Thanks.
My guess is that the people you spoke with simply don’t know the right answer, but it’s also possible that this has changed. If anyone on this thread has opened a business credit card with US Bank recently, can you let us know whether it has shown up on your personal credit report? The hard credit inquiry will show up, of course. We just want to know if it is reported as an open account.
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In the past 24 months I applied for and received the Amex Platinum, BoA Alaska Airlines, Hyatt, IHG, and United Airlines (AU) and just got the 5/24 not approved letter after applying for Sapphire. I called the reconsideration line and they specifically asked me about the UA AU credit card. “How do you use that card?” It’s my wife’s and I never use it.(Of course only an AU to get her 5K). Representative is pushing it through and I should find out my updated status in a week.
Great to hear that you got around the AU issue so easily!
[…] Frequent Miler shares a way to fly under the radar for Chase’s 5 inquiries in 24 months “rule.” […]
I applied and was approved for the Ink a few months ago. The card itself doesn’t show up on my personal credit report, but the hard pull when I applied does. Wouldn’t they be able to see that?
I might not be the best example because I applied for the Sapphire Preferred on the same day and that shows up as a separate hard pull, despite everybody saying Chase combines hard pulls if you apply for more than one card on the same day.
Chase can see your Chase business accounts, just not your business accounts from other banks. That doesn’t necessarily mean that they count the Ink card towards the 5/24 rule, but a FlyerTalk Wiki states that they do. So, yes, Chase probably will count you as having at least two new accounts (Sapphire Pref and Ink), but not because of the hard inquiries.