Flying under 5/24

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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

Many business cards do not add to 5/24. Chase uses your personal credit report to determine how many cards you've opened in the past 24 months. However, most business credit cards are not routinely reported on personal credit reports. Even Chase's own business cards aren't routinely reported and therefore do not count towards your 5/24 total.  That is, if you are under 5/24 you can get approved for a Chase business card.  Once approved, that card will not worsen your 5/24 status.
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 Spark Cash)
  • Discover
  • 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:

Best 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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[…] in the past 24 months. So much focus in fact is placed on this rule that there are posts about Flying under 5/24 and which are the best Chase cards to get before you go over 5/24. But over the past few days, it […]

[…] also imagine that some of you have floated under 5/24 since the pandemic. There’s going to be a lot of sexy offers coming, so stay tuned for […]

TheBrain

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.

TheBrain

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.

Nick Reyes

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.

Lee

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.

[…] can also continue to pickup business cards from most banks without affecting his 5/24 status (see: Flying under 5/24).  One notable exception is that Capital One business cards are reported to the credit bureaus and […]

[…] Flying under 5/24 […]

[…] the posts “Flying under 5/24” and “Business card advantages (and a straw man plan)” I suggested an approach […]

[…] In the long run, you and/or your significant other or spouse may be able to get more Ultimate Rewards cards by breaking 5/24 or by flying under 5/24. […]

[…] Don’t apply for any other cards in the meantime (Unless you want business cards, which do not appear on your personal credit reports) […]

[…] Flying under 5/24 […]

[…] Flying under 5/24 […]

REI

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.

[…] Frequent Miler shares a way to fly under the radar for Chase’s 5 inquiries in 24 months “rule.” […]

Christopher

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.

[…] Flying under 5/24 by Frequent Miler. I honestly only think this type of strategy is worth it if you’re already under 5/24. This hobby moves a mile a minute and there is no knowing what other rules will be in place in two years time. […]

[…] does not report to the personal bureaus (1, 2, 3, 4, 5, 6). Both credit cards and charge cards do not get reported. (Canadian Amex does […]

Jack

Be aware that most consumer protections, such as the CARD Act, don’t apply to business cards. Not really a big deal if you only plan to keep the card long enough to get the bonus.

Jordan D.

Trying to get a little clarification: Do the AU’s count at part of the 5 cards limit if those accounts are older that two years? or do all AU’s added count regardless of the age of the account? Here’s an example of the distinction:

Let’s say my friend add’s me to his Citi account that has been open for 5 years. This AU card would report on my account as being open for 5 years, thus circumventing the 5/24 rule (because the card is reporting 5 years of activity). I believe the only major bank that reset’s the clock with an AU added is Amex since they start the calendar over for an AU regardless of how long the primary holder has had the account. Am I wrong? Any data points?

Jerry

If I currently have a Chase Southwest Business card, but apply for another under a different business name, what are the chances for approval

Farnorthtrader

It is possible to be approved for two of the same business cards for two different businesses, unlike AMEX, which restricts cards based on the principal of the business.

P

Could someone give some clarifications: I thought the 5/24 is for applications even if those applications resulted in denial for a new credit card. For example, if you applied for 15 new cards from other banks but only 1 got approved, Chase will still deny you. So, wouldn’t applying for 15 cards still result in 15 or fewer credit inquiries that the banks will see?

P

When social security card is used for TIN.

P

OK. Thank you,

P

I mean if you apply for 15 business cards using your social security number and only 1 got approved, wouldn’t there still be 15 or fewer credit inquiries in your credit report?

Raj

Applied for Ritz Carlton before the 5/24 rule went onto effect, but have to send veri proof (ssn). Will my app be affected by this rule?

Liz

How does Chase count AUs for the 5/24 rule? Is it based on the day you were added as AU or based on how old the card you’re being added to is? I was recently added as AU to a very old card.

Liz

It was an American Express card that I was added as an AU for.

Chase checks Experian to count how many cards you have newly opened, right? I should probably order a report then to find out.

wise2u

Wrong!!! Chase does look at your business cards with them, even if they don’t post them to your credit report.
I asked a personal card reconsideration person a while back and they said chase based their CL for customers on total credit extended through BOTH business and personal cards. They pay attention to the income stated on applications and are only willing to extend 60% of the total, she actually said that was the max and that they like to keep it at much lower levels..this included personal AND business limits, and she had access to all of my profiles and cards on her screen….since they tend to give me way too high limits on my business cards, I found success for a new app of either kind was easier if I had the credit limit lowered on those and waited until it hit their system. They treat personal and business products separately and have 2 different divisions, so lowering a business card limit with a personal card rep is impossible, and the first time I had to cancel a personal card to make room for another….then after lowering limits on 2 business cards I was able to get instant approval on my next personal app….so they may not post on your report, but chase sees all your chase cards and limits….they used to only care about your ability to pay.

Farnorthtrader

Nope, in the flyer talk 5/24 thread, there are reports that Chase business cards were counted against the 5/24. Their computer pretty muchas to check you against their records to make sure they aren’t advancing you to much credit. You can get the same business card for multiple businesses, so if they did not check, you could have dozens of cards that would not be counted against their total outstanding with them.

Ken

If you’re applying for a Chase card that the 5/24 applies to, they can and will be able to see your Chase business cards in the past 24 months, and they will hold them against you.

Jonathan

So here’s the important, unanswered, follow up question:

What if someone signs up for some of these business cards, and later wants to sign up for a Chase business card? For that, will Chase review the applicant’s business credit report (and if over 5/24, decline)?

Daniel Gordon

So let’s say I’m at 4/24 – then in theory I could apply for 3-4x Chase business cards over the next few months? And as long as I’m applying to business cards, I won’t hit the 5/24 rule?

Farnorthtrader

Nope, wrong, Chase can, of course, see their own new business cards and count them among the 5/24. Only cards from other banks are not counted.

Oliver

Chase knows you have Chase business cards. You have to be under 5/24 to get a new Chase business card. Business cards do not increment/add/change your 5/24 status. If you were 4/24 before being approved for a business card, you will still be 4/24 after your approval.

Sam

Does this apply only to open accounts? Would it work if you closed (and removed youself as AU from) enough accounts such that you you have less than 5 open accounts under two years old?

Lynn

Recently applied for the Mileage Plus Business card. Got denied and letter stated “too many new accounts within past 24 months.” I called and was again denied. Sounds like the rule applies to business cards, even if those inquiries don’t show up?

Can

Interesting! I’ll need to check if AU business cards show up. Or did you already check that?