Chase (Temporarily?) Expanding 5/24 Policy to Credit Limit Increases

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Times are tough in the financial world. With the pandemic continuing to wreak havoc on the market, banks have updated policies and tightened rules. One place where this directly affects consumers is in their lines of credit.

Whenever the economy enters a period of uncertainty, it's reasonable to see banks lower credit lines and close inactive accounts. This practice serves to limit the bank's exposure and lower its burden of risk. But, while it may make sense for the bank, it's naturally pretty inconvenient for its customers.

Unfortunately, Chase appears to have taken this opportunity to expand its notorious 5/24 policy. More specifically, Doctor of Credit reports that cardholders have recently been denied a credit limit increase for being over 5/24.

Chase Bank

What is Chase's 5/24 Policy?

The Chase 5/24 policy is one of the most infamous application rules in the world of credit card rewards. It started as a rumor in 2015 when reports indicated that Chase wouldn't approve applicants for a card if they had five or more new accounts in the last two years. It remained unofficial until Chase briefly included it on a Chase Sapphire Reserve® application page in 2016. They didn't mince any words:

You will not be approved for this card if you have opened 5 or more bank cards in the past 24 months.

That made it official. Over the years, we've seen Chase continue to expand this policy: first to all Ultimate Rewards-earning cards, then certain co-branded products. Now, virtually all Chase card products are subject to the 5/24 rule.

What does that have to do with my credit limit?

With the current financial climate, banks curbing credit limit increases isn't surprising in the least. However, what has caught some people off guard is Chase using a policy (assumed to be) designed to combat credit card application abuse to make the decision.

In reality, the decision to not extend further credit to someone—in any financial climate—is based on risk assessment. Banks want to know that you won't default on the card or miss payments. This is why applications for a credit limit increase often involve at least a soft pull on your credit report. Does this mean that 5/24 was meant as a risk-management tool all along?

The answer is ‘probably not'. In general, Chase simply seems to be reigning in how much credit it extends to customers. While we've never seen the 5/24 policy used this way, it's ultimately not that surprising for Chase to use it as justification for denying limit increases.

Bottom Line

Chase has tightened up a lot in response to the shifting financial climate. We've seen far more application denials than usual, and more than a few people have had their extended credit lines lowered. With that in mind, it stands to reason that Chase would be stricter with credit limit increases.

It's still unclear whether Chase is implementing this rule across the board. If you're contemplating applying for an increase in your credit limit, double-check your 5/24 status before applying—just to be safe.

Have you been denied a credit limit increase because of your 5/24 status?

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  • Thank you for the blog..

  • Totally understand Chase being cautious when granting increases to existing credit limits, especially in this COVID-19 environment. I just find their implementation of a rigid rule to be very inflexible. Would seem to make more sense from both the card holder & Chase’s perspectives to make a case by case determination of each individual’s credit worthiness (much as was done on the initial credit card application).

  • I can understand not wanting to extend credit to those who may not be able to pay it back, especially in a climate where there are record unemployment claims and no indication of when things will start to bounce back or even stabilize. Banks are trying to survive this, just like the rest of us. And if they don’t survive, then there goes all the rewards we were all working on building.

  • Gabriel L. Boisvert says:

    Unfortunate, but not surprising given the economy.

    • Not at all, especially when you consider that banks are proactively lowering credit limits across many users, moving in the opposite direction to understandably reduce their exposure, for all the same reasons.

  • Stephanie Lightle says:

    I wish there was an easy way to track where you’re at in the rolling 24 month periods. I wasn’t doing a good job tracking when I opened my first account, and I’ve already closed it and don’t have details. I’m not sure how long I need to wait to open another Chase card.

  • Michael Dikovitsky says:

    I have no issue with the 5/24 policy. Banks need to be cautious.

  • How odd. I wonder if you lower your credit on one card to increase it on another? They probably are watching that too. I understand but do not understand the reasoning. I am not up that tier of people of how to figure out that kind of stuff.

  • I think they want to cut down on the bonuses they issue in the foreseeable future.

  • Correct, I have been rejected to Chase card as 5/24 rules. Anyway, I will not use chase card anymore.

  • I have no issue with Chase’s 5/24 policy. Abuse of the system results in negative changes for everyone long term.

  • I was denied a Chase biz card a few months ago even though I was under 5/24 and had a credit score of 820 plus. Their reasoning was because I was not listed on Dunn and Bradstreet. I’m certainly not going to pay big bucks to do a builder credit. Looks like I may never get a small business chase card for legitimate small business ventures!

  • I guess the banks want to make sure they are not over-extending credit to people who might not be able to pay it back in the future- Good time to apply for more if you need it though before changes go into effect!

  • This doesn’t make sense. It comes across as incompetence for not looking at other angles when making such decisions.

  • Chase is doing what any financial company should do. As much as I detest 5/24, i don’t see that as relevant to the credit line decrease. Overall this is a sensible business play by the bank. Reducing their exposure, when so many are struggling with debt and income, is a necessity.