Do Product Changes and Conversions Count Against Chase’s 5/24 Rule?

Mar 29, 2018

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“Reader Questions” are now answered twice a week by TPG Associate Editor Brendan Dorsey.

Chase’s 5/24 rule has become a major consideration for readers when applying for credit cards ever since it was implemented in 2016. Knowing your 5/24 status is vital when applying for Chase cards, but TPG reader Rajeev wants to know how to account for a recent set of product changes and card conversions…

“Does the Hilton Honors transition of cards from [Amex] Surpass to [Amex] Ascend count against the Chase 5/24 rule? My wife and I (she’s an authorized user) have the Surpass card and just got transitioned to the Hilton Ascend card.”

TPG Reader Rajeev

In the middle of last year, American Express — which had previously shared the Hilton credit card portfolio with Citi — won it outright, and Hilton cards once issued by Citi were converted to American Express cards this past January, since American Express now exclusively issues all Hilton co-brand credit cards in the US. Amex’s own existing Hilton Honors Surpass cards were also converted to the new Hilton Honors American Express Ascend Card, as the Surpass product was discontinued.

So how does this fit into Chase’s 5/24 rule, and what exactly is 5/24? Well, Chase denies applications for many new Chase credit cards if the applicant has opened five or more accounts across all banks in the last 24 months — hence “5/24.” And of course, once you’re over the limit, it can take many months of not getting any new personal credit cards before you’re back under the threshold and eligible for Chase cards again.

As you might guess, in addition to Amex Surpass cardholders like Rajeev, a number of Citi Hilton cardholders have also been concerned that the conversion of their Hilton card from Citi to Amex would show as a new account on their credit report, which then would count as an additional credit card against 5/24 and potentially impact their ability to get new Chase cards.

But do these conversions or product changes count? The good news is that, no, they should generally not count against 5/24.

When it comes to product changes and conversions, a credit card’s account history generally remains as a single entry on your credit report from the original card to the new card, and doesn’t get broken into a second account. So when Rajeev’s existing Amex Hilton Surpass was converted to the Hilton Ascend, it didn’t show up as a new account on his credit report and therefore didn’t count against 5/24. Or to take another example, if one wanted to convert their Chase Freedom to the Chase Sapphire Preferred Card or even go the other way around, it wouldn’t count against 5/24 either.

Of course, this Citi-to-Amex Hilton situation is unusual because of the transfer of accounts between banks. But we checked with our own TPG staff members, two of whom had Citi Hilton cards that were converted to the Amex version. Both said they did not see a new account on their credit report after the conversion.

Keep in mind that while product changes with most banks usually don’t count against 5/24, it’s always possible to see exceptions, especially if you’re issued a new account number or the bank has to run a new credit check because the card requires a minimum credit line (i.e. the Chase Sapphire Reserve requires a minimum of $10,000 in credit). And it’s not guaranteed that in the future, if one bank were to take over the credit card accounts of another bank like Amex took over Citi’s in this case, that the same experience would hold true. That’s something only time will tell.

There are also other 5/24 exceptions for credit cards. For instance, many business credit cards — though not all — don’t show up on your personal credit report and can help you stay off Chase’s radar when applying for new cards. On the other hand, if you’ve been added as an authorized user on someone’s personal credit card, that card would show up on your credit report and count towards 5/24.

So make sure you’re aware of which cards you’re opening and how they’ll be considered under the 5/24 rule. Thanks for the question, Rajeev, 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.

Photo by Justin Sullivan/Getty Images

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