The Chase Sapphire Reserve is the most anticipated card product of the year. It’s an outstanding product with killer benefits like 3x points on dining + travel, Priority Pass Select, Primary Auto Rental Collision Coverage, and more! However, Chase has this irritating little rule called the 5/24 rule. Basically, if you’ve opened 5 cards in the past 24 months, your request for credit will be denied. The rule does not apply to co-branded credit cards like the Marriott Premier. I totally understand why the rule is there, but there must be exceptions. There aren’t, and in the case of the Sapphire Preferred, the Chase 5-24 rule is unfair.
I know a lot of you are in the same situation and are probably thinking the rules are the rules. Here me out. My personal situation saw a few applications in the past couple of years, one of them being my very first Sapphire Preferred card just a year ago. Had I know then that the Sapphire Reserve was going to come out, I wouldn’t have applied for that card. Why would I want to Sapphire Preferred when this better, but more expensive product is available? Wouldn’t Chase want me to have it too? The card carries a much higher annual fee and gives me more incentive to use it. But no. Chase is choosing to be stubborn and kind of dumb about this. I mean their rules already make it so you can’t really churn their cards. And if I want the Sapphire Reserve to replace my Sapphire Preferred that I use regularly, why wouldn’t they let that go? I explained all this to the Chase reconsideration folks and a retention specialist. But they said there’s nothing we can do.
Now, you’re probably wondering about what the other 4 cards are. Well, according to Chase, those are my Alaska Air Visa, the Amex EveryDay Preferred, the Hyatt Visa, and a PenFed Visa. That last one really ticks me off because I didn’t apply for the card. The card was simply given to me because I have an auto loan with PenFed. The loan was opened in 2013, while the credit cards says Jan 2015. I explained this to the Chase reps too, but it didn’t matter. Even though I didn’t apply for a card, the fact that it’s been opened under my name means I’m still ineligible. The fact that I’ve been a loyal (as loyal as I can be since there are no branches in my state and am thus not eligible for an account) cardholder and have never churned cards didn’t seem to matter either. Stellar credit with zero derogatory marks and a long history of always paying with Chase? Who cares.
And this is why I think the Chase 5-24 rule is unfair in regards to the Sapphire Reserve card. While many of us knew the card was coming, we only knew about a month away from it’s launch. Chase is being extremely customer unfriendly, in my opinion, and often to its best and most loyal customers in this case. I even asked the retention specialist if there’s anyway I could get this product and he flat out said no. Not even an upgrade for my Sapphire Preferred? I’ve always loved Chase and the service they’ve furnished, so this post isn’t coming from someone that harbors animosity towards them. But I also feel that Chase needs to learn something called common sense. Or perhaps they’ve become too popular for their own good? I stated that I thought the situation is unfair given the overall circumstance and they didn’t care.
What I think Chase should have done, and should still do, is provide a one-time exception for the launch of this product, especially if one of the 5-24 accounts is a Sapphire Reserve. We’ll see what a call to the normal customer service line and request to upgrade (without signup bonus) does for the account.
Not 100% sure, but I thought others had reported that they were able to upgrade an existing Chase card to the Reserve… but without the sign up bonus, unfortunately. HUCA?
DWT, I’m thinking about trying that next. The “retention specialist,” though, didn’t want to give that option.
Simple solution: Vote with your feet. Stop doing all business with Chase, let the CSR (customer service rep in this case) know the reason you are closing all of your accounts and moving your money out of Chase is due to 5/24. Only when it impacts their bottom line will they take notice. This is what I am preparing to do (after I secure my current bonuses of course). You turn me down for the CS(R)? Buh bye.
WR, I’ve been thinking of doing this too. Problem is, because my Chase accounts account for the majority of my available credit and are my oldest accounts, it may do serious harm to my credit. For now, I plan on avoiding spending on their cards.
For what it’s worth, I told the retention specialist how disappointed I was in them and that I would move my business elsewhere, and he didn’t care. He gave a canned answer with a whole lot of attitude!!
That means they are doing a good job with brand entanglement. By getting you stuck in their network, they can reduce their reinvestment and grow their margin. While some people will leave, if they keep enough they grow profits.
That’s just smart business. If you look at their releases, their margins in their Consumer division are expanding. Obviously there are a bunch of other things going in that, but high level it looks like whatever they are doing at a macro level is working.
That is true, Jim, however, there seems to be a lot of negative backlash from similarly loyal customers. Many, myself included, are willing to move their spend elsewhere because of this. I have other accounts I can use to make this spend, as I’m sure most others do too.
Chase doesn’t care. There are millions of people out there that want credit. You walking away isn’t going to bother them one bit. Nice in theory, won’t matter in practice.
KS77, that’s exactly what I get from their employees.
I was denied too. Best is to avoid spending on Chase cards. If they want be idiots so be it. Its not the end of the world if you cannot get the Reserve Card. They are not getting my money to establish a Chase Private Banking Account.
MrChu, good idea. Will likely do something similar. Unfortunately, though, Chase has seem to become incredibly arrogant. Their reps don’t care if you choose not to do business with them any longer.
Do you think Chase would make money if they gave you this card? My guess is no, so it is a smart decision on their part. They are running a business, not a government service. They can give a card to whoever they want.
If you really want the card, you can always have them convert your Sapphire to this one…But you really want the bonus (i.e. their money) and likely won’t be profitable to them. So smart move on their part.
Jim, I disagree. If they took a look at my history with them, they’d see that I put a very large amount of spend on the cards. I personally may not spend more than the average person, but I make tens of thousands of dollars in purchases on behalf of my employer every year. And I ALWAYS put that spend on my Chase cards. Oh, and I don’t churn. Never have and never will. And as I’ve said in my post, I’m contemplating converting my CSP, BUT the account is fairly new I and would not have applied for it if I knew the CSR was being released.
Agree and Disagree with you statement. Agree that it should not be based on just the 5/24 rule. That should be the trigger to launch a deeper investigation if you deserve the card and not be used just to deny your application. However, I disagree it is unfair. I would imagine that with the grow of travel related blogs and lots of them offering glamorous reviews on how easy is for anyone to fly Singapore or Emirates first class for free by just getting a credit card has caused a lot of trouble for credit card companies like Chase. I can imagine how many people apply for these credit cards, meet the minimum requirements of spending, use the points/miles and then cancel the card. That in my view is unfair with the credit card company. Thus, what Chase is doing is to close that option since many people complaining they cannot apply for this card because of the new rule would do exactly what I just mentioned here. I was on the fence in applying for this card since I did not know if I was under 4 or 5/24 applications excluding businesses cards. I ended up applying online 2 days ago and got a note saying they would let me know in 30 days by mail if I was approved. This morning I logged on my Chase account and the Chase Sapphire Reserve card was showing in my account with a very large credit line. One of the reasons I applied for this card was that I only had 1 Visa card which was the CSP and since I spend a lot of money at Costco I wanted a better Visa card to use there. I plan to downgrade the CSP to a card with no annual fee.
Yes! That’s exactly what I think this rule should be, Santastico! And while it’s true that blogs have likely had a negative impact to a certain degree, they also leverage it. Chase has MANY affiliations with bloggers, like the Points Guy, to help push their products. So to me, it’s all a bit hypocritical. They want us to know about their cards, why we should have them, and want us to apply for it. But at the same time, they don’t want us to have it. I can see them not wanting to make life more difficult for churners, which, fine. But don’t, as you’ve said, lump us all in as one. Take a deeper dive into our relationship. If I put a good amount of spend on your cards and have a ton of other cards with other lenders that I rarely use, how does that affect you, Chase?
Anyway, does Chase still offer the no-annual fee Sapphire? I converted mine into a Freedom Unlimited after opening my CSP.
I meant I will convert it to a Freedom card which has no annual fee. Yes, it should not be just a rule applied to everyone that is over 5/24. But also, I agree they promote their cards for people to have but they want people to use them and keep paying the annual fee and not churn on it. Again, it should be a case by case decision but maybe they don’t have the resources to do that. In my case I have almost 1MM UR points so I guess I am a very good customer for Chase. I would also be disappointed if I was denied this card.
Ah, I see Santastico. That may very well be the case, too, especially with the 20+ minute wait times I’ve encountered on their recon line this week. I have to think, though, there’s gotta be a better way. Even Amex’s once in a lifetime bonus would be better.
I agree 5/24 is bad for Chase. Many years ago, I applied for CSP because of their 60K UR points, but I after I found that it is also a great card to earn or accumulate points by daily spending, I put all my expenses on it. I’m sure Chase is making money from me over these years. Now that 5/24 rule is really annoying and I am considering to move my daily spending else where. It is really bad publicity for Chase and irritating its customers. IMO, this 5/24 is worse than AMEX’s once in a lifetime new card bonus (because really, my opening of new credit account outside of Chase has absolutely nothing to do with them).
Yes! Me too, Newman. And they are definitely making a nice amount of interchange income from you. If your transaction volumes are high, that’s what they want. Their cost is actually minimal since they have a really cozy relationship with Visa. The more you use your card, the more they make. Which, now anyway, makes me want to spend less on their cards. Thanks for showing me how much I matter after years of loyalty.
I say screw Chase. Hopefully our tax dollars won’t bail them out next time around…
Arrogance (Chase) is never a good thing
I agree, it is unfair that well-educated, high-income folks should be denied the opportunity to see the world on Chase’s dime.
Well-educate, yes. High-income, not a chance. My household manages to just make do in my astronomically expensive state. Yes, Chase should do something to protect itself against churners. But us regular folk that scrounge UR points for YEARS before ever being able to redeem for a special vacation? Not so fair. Especially when your history with Chase has proven that you do not abuse their products. This situation isn’t plain black and white.
just an FYI, but Chase makes basically nothing off of you if you pay off your balance every month. Spending thousands of dollars doesn’t matter to them because when you pay it off immediately, they can’t charge you interest – which is how they actually make their money. The 5/24 rule is completely fair because they are up front about it and make it clear for all applications. That the rule goes against you is unfortunate, but not inherently unfair.
As someone that works in the industry, they do make money off of those that don’t carry a balance. It’s called interchange. And with the way Chase’s network is setup thanks to their VERY cozy agreement with Visa, the more people use their cards, the more money Chase makes. Their cost for use of Visa’s network is basically fixed. And with a card at this level, financial institutions in general know most cardholders will not carry a balance.
I also worked in the industry for the better part of the 90’s and had to explain to people that having $10,000 deposited into your account didn’t mean anything if you spend $9,999 every month. Yes, there are other ways banks make money off their customers, but not owing or lending the bank your money ever isn’t going to make them sit up and take notice.
So what is an average interchange fee? I legitimately do not know what it is these days. A couple of cents per transaction? That would require a TON of transactions for them to receive any significant revenue from your spending habits. Compare that to the cost of keeping you as a customer and offering all that the CSR offers… Probably doesn’t make that much business sense to take a loss for loyalty.
Lee, I’m not 100% certain myself. It’s really complicated now days, though the norm seems to be about 1.5% to 2% of the total transaction on average. Of course this varies based on transaction type, network, agreement between network and issuer, etc. There are rates that go well over 2.5% too. EMV transactions can also cause downward pressure on interchange fees, though EMV acceptance is still relatively low in the U.S. Let’s not forget the lease agreement Chase has with Visa that drastically lowers their costs. And yup, having tons of money deposited to your account doesn’t mean anything at all really. I have zero depositary relationships with Chase because I’m not allowed to (Hawaii resident), but I’ve heard from many that Chase will waive the 5/24 rule if you open a Private Client Account.
I’m not saying I’d be a high-value customer for them, but typically banks do assume very little interest income from products such as this. And, to be fair, had I not opened my CSP, Alaska Air Visa, etc. in the recent past, I would have been approved for this card. I don’t fault Chase for protecting themselves at all; I get the business decision. My issue is largely with how black and white the interpretation of the 5/24 is. I put nearly all my spend on their cards, whereas other cards like the Alaska Air on and my Hawaiian Air one are specifically for spend on those airlines. And not that it matters to them, but I opened Alaska to get away from American. Timing for all these decisions wasn’t the best I suppose, but it is what it is. Heck, I’ve spoken with some that put a really significant amount of spend on their Chase cards, and they’re still getting denied due to 5/24. They are the type of customers you’d want to retain.
I’ll likely see if I can upgrade my CSP to a CSR. For me, the card value alone is worth it. While nice to have, I don’t need to have the signup bonus.
If you charge above a certain amount every month (I don’t know what that amount is, I’d guess a few grand) and pay it off, you will be profitable on account of the interchange revenue.
It pains me to say it, but I think Chase’s decision will weed out more than enough unprofitable accounts to offset anything it will lose in business.
Five inquiries puts you in the poor category on Equifax and Transunion. Luckily it’s low impact, but it leads me to believe a very small percent of people have 5 cards added in the last two years. Are there any stats?
I have about 15/24 and I applied and was approved after calling in. I spend 2 million a year on chase cards, not manufactured, so it wasn’t an issue. The main point being I am not gaming the system and they can clearly see that
I guess it really isn’t about loyalty then, Benjii. I put as much spend as I can on Chase cards, but can’t come anywhere near (even a fraction) of that amount! I guess I really am not worth it to them. Oh well!
You know if we all just closed all our Chase cards in response to 5/24 they would be a bit stuck.
Sorry, but I will never close my IHG card. I’ve had too many good rooms for the $49 renewal. I’ll consider that my revenge,
Hah! That’s a great way to think about it, Carl P. I wish I could say the same about my Marriott Rewards Premier card… The annual certificate is all but useless to me. The Hyatt one, though, I can use to exact my revenge.
That’s a great idea Nick, but getting most of us travel people to boycott them would be difficult. I’d be down for it if most did agree to do this, though.
Cry me a river with your first world problem, you cry baby.
Tough.
You want the Reserve Card? Upgrade and forego the bonus, period.
Chase’s rules are there to weed out churners and good for them.
I am precluded, as well, but know that very soon I will be able to obtain the card — if I want it — because I am not a pig with opening credit cards.
Perhaps you too, should be thankful, that you supposedly only have 5 cards.,
Boo Hoo!
Boo Hoo, I didn’t say I wouldn’t upgrade. However, Chase’s own “retention specialist” refused to offer the option when asked if there’s any other method of obtaining the card. And, like I’ve said, I’m no churner. I’ve loyal put majority of my credit card spend on Chase cards. And like I’ve said before, one of the offending cards wasn’t a card I applied for, the issuer simply handed it to me for being a reliable credit user with them (loan). Chase refuses to exclude that card, even if I get a letter from the issuer confirming this.
the 5-24 rule exists because many consultation and third party research firms have determined the people most likely to default on credit cards are the people who sign up for a massive amount of credit in a relatively short amount of time. The exception to these rules are people who sign up only for the massive sign up bonuses and then stop using the card thereafter, people the banks also don’t really want to service.
Rules suck when you’re the 1%, but they exist for a very logical reason. Pretty sure we had an economic depression because people were getting sub-prime loans and credit lines they wern’t really supposed to be getting.
Tony, I do believe that argument is part of the reason for the 5-24 rule. However, in my situation, I didn’t apply for one of the offending cards. The issuer simply gave it to me for being a good credit user (loan). I asked Chase if I could get a written statement from the issuer evidencing this and have that card taken out of consideration, and they flat out denied it. They said the fact that it was open at all, regardless if I requested it, excludes me. And then there’s the fact that I would not have applied for the CSP had I known this card was coming out, which is another offending card. They still didn’t care.
You’re seriously going with unfair? Really?
They’re a bank. A large one. You are asking for credit from them and on top of that you want the 100k bonus that is worth at least $1500. If they got ALL of interchange which they don’t and if you paid off your balance every month so there was no interest accrued, you would have to spend approximately $87500 in online purchases or double that for card present transactions for them to even break even on the bonus after reversing out the entire annual fee which doesn’t account for their costs of the airline travel credit nor lounge access program nor the cost the cover the points you’ll accrue in the process on spending said $87500-$175000. I mean seriously, unfair? That’s your argument? They’re making a business decision. You’re trying to travel for FREE. Do the math. It’s a good business decision on their part. When they keep people at 5 card applications every 2 years, don’t you think the likelihood of spend going on their cards goes up? Fair. You can’t be serious. My 8 year old complains about fair. This is what it is. You need to stop whining. Just work the fringes of their mass marketing and take it where you can get it.
Maybe you start a bank… you can call it the Fair Bank. You’ll give credit to anyone with a 700+ credit score. Of course you’ll hand out $50k credit lines because the MS’ers need it to operated and you’ll make so much with those guys. Let them churn cards to the heart’s content. Give out 100k signup bonuses for $1000 in initial spend and 50k every year just to remain a customer. And oh yeah, your points will be worth .03 each on any travel expense and you partner with all airlines and give 100% transfer bonuses… because that’s fair. If you do it, let us know. We’ll sign up for your card. Doubt you’ll make any money though.
LOL… fair
Jason, you’re entitled to your own opinion, but not all situations are black and white. Do I churn cards? No. I’ve said this before. Every Chase card I’ve ever opened I’ve kept opened. My Chase cards are also my primary spending cards. I put a lot of volume on them, and yes, I don’t carry a balance, but guess what? With a card like the CSR and perhaps even the CSP, they’re expecting that. I work in the industry, and most FIs big and small do these types of bonuses. We make family good money of the interchange on those that don’t carry a balance, and we make even more off those that do carry a balance. We expect our high credit score borrowers to NOT carry a balance. And don’t forget, Chase leases Visa’s network, their card transaction costs are MINIMAL. They want you to pump more volume because they make more money that way. Further, I don’t have 5 card applications in 2 years, one of the cards was simply handed to me. Chase doesn’t care that I didn’t want it, I asked if showing them written proof from the issuer would mean anything. No. Did they offer to let me upgrade my CSP with out the bonus? No. I’m WILL try that route, because honestly the bonus is nice, but the long-term value of the card is far more important to me. But Chase’s unwillingness to look at their own records and address unique circumstances (with proof I might add) is just awful customer service.
I met the same fate. Got denied for Chase Sapphire Reserve and I was only 7/24. Both me and my wife have been long time chase customers. We have chase checking account and auto loan with Chase.
Here is what I did after I got denied, I even went into the branch to talk to their rep.
When I came home, I sent a secured message to cancel all my chase cards except the freedom.
I cancelled
– Chase INK business
– Chase Sapphire Preferred
– Chase Hyatt card
– Chase AARP card
and I also transferred all the money in my chase checking account to my schwab and closed it.
I would have paid off my auto loan if it was not 0% APR (~$10k standing).
For me it is just a matter of principle. As a consumer I have many other choices where I can bring my business to. Would have cancelled the chase freedom but I got a very long history on that one and it has no annual fee. Vote with your money.
Sorry to hear that, Glenn. Yes, definitely vote with your money. That’s a great way to do things. It’s unfortunate, though, that Chase really doesn’t seem to care. They seem to believe there’s so much demand for their products that losing even a few thousand of us over this won’t matter to them. And when we’re talking about “loyalty” the only people that seem to get any shot at a reconsideration are those with Private Client accounts. Not cool. I agree, though, that this is a matter of principle. They could have chosen to look at the overall relationship and our own histories with them to make the determination, but instead they make this super black and white policy that may alienate some of their most loyal customers. I really hope they’ll change, but doubt they will. Thanks for sharing!