If you’ve ever noticed your bank offering credit card rewards, you may have heard about credit card churning. It’s important to remember that signing up for multiple cards to receive rewards for each card can be risky. If you don’t have the financial stability to make sufficient payment to pay off these cards, you’ll end up damaging your credit score and increasing your debt. This would be extremely counterproductive, especially considering you’re just looking to enjoy the perks and free rewards. Before we get into all of that, let’s assume you don’t know much about credit card churning, and start from square one.
Understanding the Basics of Credit Card Churning
Our credit card churning guide will help you save money and travel the world for little to no cost at all.
What is Credit Card Churning?
Credit Card Churning is the act of repeatedly opening and closing credit cards so that you can earn the sign-up bonuses over and over. If you’re able to do this with several cards it will allow you to build up many more rewards than using just one card. There are strategies you can use, which we’ll cover in this article, that will allow you to maximize the amount of rewards you’ll be able to earn.
For example, I’ve been able to earn the Southwest Companion Pass, which allows free travel for a companion every time you book with Southwest.
If you’re not sure what we mean by rewards, many credit cards issuers have offers you’ll receive for signing up. For example, you could earn airline miles, free nights at various hotels, and other big bonuses. These are typically rewarded to the cardholder for spending a specific amount during a set timeframe of opening the card. Typically, this period is 90 days of opening the card, but it can vary. Be sure to remember, the more cards you open, the more signup bonuses you’ll be able to earn.
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My Free Travel Hacking Spreadsheet Template
Well the first tool that is a must-have is my travel hacking spreadsheet that is completely free to download. My travel hacking spreadsheet includes:
- Credit card churning tracker
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- Hard pull credit inquiries
How to Stay Under the 5/24 Chase Rule
The Chase 5/24 rule is something that everyone should know and understand before getting involved in credit card churning. Chase offers one of the best rewards programs through Chase Ultimate Rewards.
What is the Chase 5/24 Rule?
The Chase 5/24 rule refers to the rule created by Chase to deter Credit Card Churning. The rule states that even a perfect credit score, it may not be enough to get you approved for many of the available Chase rewards cards. If you’ve opened five or more new credit card accounts within the past 2 years, Chase will not approve you for a new card. Chase doesn’t exclusively look at cards you’ve opened with them. They look at the total number of all cards you’ve opened across all banks.
Chase is the issuer of most of the popular and more lucrative reward cards, so this rule is something you’re going to want to stay under the limit of. Currently there is no way around this rule, but there are possible ways to lower the impact of the rule. One way to do this is simply go for business cards. Many small business credit cards aren’t included on your credit report. These will not be counted towards the 5/24 rule.
Also, try and take advantage of the pre-selected “Chase Offers for You”. These seem to bypass the rule for specific cards. You can also bypass it with in branch pre-approved offers. Sometimes mail offers with RSVP codes will bypass this rule as well. As you can see there are ways of getting around it, but it is a little tricky.
How to Stay Under the Chase 5/24 Rule
As stated above, a major way to avoid breaking the 5/24 rule is signing up for business cards that do not appear on your credit report. This will allow you to sign up for plenty of cards but not have them show up. It’s extremely important that you are not added as an authorized user to any personal cards. If you are directly tied to them, they will show up on your credit report. If they’re tied to a business, they won’t. Simple as that.
It’s important to note, to be eligible for a business card, you’re going to need a business. It’s possible that you may have a business without realizing it. If you sell things online, that counts as a business. Owning a rental property, writing and consulting are also examples of things that may qualify you as a business. These are considered Sole Proprietorships.
Can I apply for a business card with Chase?
It is also worth noting that the vast amount of business credit cards available these days makes the rule not as scary. Almost anyone has access to dozens of business credit cards that offer rewards of all kinds. If you still want to get all those Chase rewards, however, be sure to follow this guide and stay under that ratio.
Be sure to double check your own 5/24 count as well. Just because you get denied doesn’t mean you’re over the limit. Sometimes Chase’s automatic system is wrong, and you can explain that to Chase. They will look into it and correct an error if it has occurred.
The most reliable way to check this is to access any of your annual free credit reports. Any cards that were opened in the past two years will be reflected on that report and will most likely be counted on Chase’s totals. Are you above the Chase 5/24 rule? There are several Chase cards not subject to 5/24. We’ve built a list of credit cards that are not subject to 5/24 to help you continue your credit card churning journey without limitations.
Are you going to try credit card churning? What step will you take first? Comment below. We have a private Facebook group focused on sharing the very best deals in travel.
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