TPG reader credit card question: Do cards opened under my LLC’s name count against my 5/24 status?

Sep 14, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Editor’s note: This is a recurring post, regularly updated with new information.

While Chase’s 5/24 rule — automatically rejecting applications of customers who’ve opened five or more credit cards in the last 24 months — is incredibly frustrating to award travelers, it’s had the unintended benefit (for Chase at least) of making Sapphire and Ink credit cards the first on many people’s wish list. TPG reader April wants to know if business cards opened under her LLC’s name will count against her 5/24 status with Chase …

Will cards opened for my LLC count against my personal 5/24 status if the cards are opened in my LLC’s name?

TPG READER APRIL

For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.

Good question April. People spend so much time trying to carefully calculate their 5/24 status so they don’t waste an application and risk rejection. It’s important to keep in mind that there’s a difference between the cards that are restricted by the 5/24 rule (only Chase cards) and the cards that count against your 5/24 status (all personal cards and some business cards).

Related: Your guide to applying for small-business credit cards

In terms of April’s question, it doesn’t matter whether you’re talking about a card for a sole proprietorship that uses your name as the business name or a card for your LLC that uses a business name. All small business card applications are approved using your personal social security number and credit report, meaning the application process works the same way whether you’re applying for a card for an established LLC or a small and informal sole proprietorship.

We’ll talk about the exceptions to this rule in a moment, but the same reason most business cards don’t count towards one of your 5/24 slots is the same reason they’re great for businesses with high expenses. Simply put, most business credit cards don’t show up on your personal credit report. When you open the account a credit inquiry will show up on your report, but the account itself (and importantly, the utilization ratio) does not. This means that your business can spend tens or even hundreds of thousands of dollars a month without it affecting your personal credit.

Because most business credit cards don’t appear on your personal credit report, they don’t show up as a new account in Chase’s system and they don’t count against your 5/24 status. Interestingly enough, even Chase’s own business cards like the Ink Business Preferred Credit Card don’t add to your 5/24 score.

Related: The best ways to use your Chase 5/24 slots

However, if you open a business credit card issued by Capital OneDiscover or TD Bank, these do report to your personal credit report and count as one of your 5/24 slots. This is true whether you open it as a sole proprietorship with the business name matching your name, or as an LLC with a different business name.

Bottom line

While April is right to be cautious about calculating her 5/24 standing with Chase, it doesn’t matter if she opens business cards under her LLC name or as a sole proprietor using her name for the business name. All that matters is whether she’s applying for a business card from one of the issuers (Capital One, Discover or TD Bank) who are known to report business cards to your personal credit report. If so, the card will take up one of her 5/24 slots but if it’s from any other issuer she’ll be fine.

Thanks for the question, April, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

Featured image by The Points Guy

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.