Plan your credit card applications wisely!

 

It is important for anyone who wants to apply for travel credit cards to plan around the Chase 5/24 policy

Costa Rica on miles and points, best credit cards for beginners

Like I always suggest, please read the starter tips before applying for any credit cards.

Chase is the issuer of some of the best travel credit cards, so it is important to consider the Chase 5/24 rule, especially if youre a beginner.  Since this particular trip involves points and miles earned from cards that are issued by Chase, it is important to plan your strategy accordingly.

What is the Chase 5/24 policy?

First of all, you may want to read this post about Chase’s 5/24 policy. That article is a more detailed overview of the policy, but I’ll try to cover all of the facts that are relevant to booking Costa Rica in this post.

The short version:  Chase is the issuer of some of the best credit cards for travel. Unfortunately, Chase limits the amount of credit cards one can open in a 24 month period.  It is generally believed that anyone who has opened 5 or more credit cards in the past 24 months will not be approved for certain Chase credit cards. This includes any credit card account that shows on your credit report, not just Chase accounts.

Once you’re at 5/24, Chase will deny an application for a card subject to 5/24 such as Chase Sapphire Reserve.  Trust me, you do not want to miss out on a Chase Sapphire card!  So my suggestion is to wait on the airline and hotel co-branded cards from other banks until you’ve opened the Chase cards you want.

So if you open 1 Bank of America Alaska Airlines Card, 1 Citi AAdvantage card, 1 AAdvantage Barclaycard, and 2 American Express cards, you’re at 5/24 even though none of them are Chase cards.  You would not be able to get approved for any Chase cards that are subject to the 5/24 rule until your fifth-newest account is 25 months old.

chase cards 5/24 policy

Not all Chase cards are subject to the 5/24 rule

There are several other Chase cards, but these are the cards potentially relevant for Costa Rica:

These are the Chase cards subject to 5/24
  • Chase Sapphire cards (including business cards)
  • Southwest credit cards (including the business card)
  • United credit cards (including business cards)

Side note about business cards: any business cards that you open do not count as one of your 5, but you cannot get approved for most Chase business cards if you’re over 5/24.

The Hyatt credit card is issued by Chase, but it is not a 5/24 card

Update: Chase launched a new Hyatt card the day this was published! The previous version of the Hyatt credit card was NOT subject to the 5/24 rule.  This means that even though Chase issues the card, you could still get it if you’re over 5/24.  The new card is too new to know, but rumors are that it will remain a card that is not subject to 5/24.  I’ll update when I have more information!

If it does remain a card not subject to 5/24, you should open the cards that are subject to 5/24 first (if you are under 5/24).

Can I apply for 2 Chase cards on the same day?

A year or two ago, I would have said yes.  The rationale behind applying for 2 in the same day was that since inquiries aren’t reported to credit bureaus in real time, banks will not know that you are applying for more than one card in one day.  Anyway, I’ve seen data points that Chase will sometimes approve two cards in the same day.  But I’ve also seen data points of Chase flagging and even shutting down accounts if they think you’re opening up too many lines of credit too quickly.  Or if they think something shady is going on.

Since Chase issues so many great travel credit cards, they are not a bank I want to get blackballed from.  I like to play it safe with Chase, so my answer to this question is that I do not recommend it.

How long should I wait between Chase credit card applications?

There is no official policy from Chase, but I would probably wait about 3 months between Chase applications.

While you’re under 5/24, I suggest not applying for cards from other banks (at least not until you’re sure you’ve applied for all of the 5/24 cards you want from Chase).

If you’re over 5/24 but want to apply for non-5/24 Chase cards (such as the Hyatt credit card), you should wait about 6 months from opening your most recent card (from any bank) to apply.

chase cards Costa Rica, best travel rewards credit cards

Which credit card should a beginner (under 5/24) open first if the goal is Costa Rica?

The best card for beginners is usually a Chase Sapphire card such as the Chase Sapphire Preferred or Chase Sapphire Reserve.  These cards earn Ultimate Rewards points.  Chase UR points can be transferred to 9 different airlines and 4 hotel programs.  Southwest and Hyatt are both transfer partners.

The sign up bonus on each of these Sapphire cards is currently 50,000 Ultimate Rewards after meeting the minimum spending requirement.    The other Chase Sapphire card that earns Ultimate Rewards is the Chase Ink Business Preferred card, so if you qualify for a business card, you should consider that one.

You can have an Ink Business Preferred card and a Chase Sapphire Reserve or Chase Sapphire Preferred open, but you cannot have the Chase Sapphire Preferred and Chase Sapphire Reserve open at the same time.

If you’re torn between Chase Sapphire Reserve and Chase Sapphire Preferred, click here for more information and a comparison.

Once you have a Sapphire card that earns Ultimate Rewards, the next cards you should consider are any hotel or airline cards issued by Chase that are subject to the 5/24 rule.

Remember, the Hyatt credit card is issued by Chase but it is NOT a 5/24 card.  So you may want to wait on this one.

What other credit cards should beginners consider for Costa Rica?

I can’t run through every scenario, because this would get super long.  But if I am a beginner and if Southwest is a reasonable airline option for me, this is probably what I would do to earn the points and miles needed for a Costa Rica vacation:

This is assuming 2 player mode (meaning you have a spouse/partner who can also open cards)

  1. Each person opens a Chase Sapphire Preferred card
    • Annual fees: 0$ because the fee is waived the first year
    • Sign up bonus: 100,000 Ultimate Rewards (50,000 X 2)
  2. Each person opens a Southwest credit card
    • Annual Fees: $198 ($99 each)
    • Sign up bonus: 80,000 Southwest Rapid Rewards points (40,000 each)

Total:

  • $198 in annual fees
  • 80,000 Southwest Rapid Rewards points (which should be more than enough for 2 Costa Rica roundtrip flights)
  • 100,000 Ultimate Rewards points.  You can transfer these points to Hyatt for a stay at the Andaz Costa Rica! 100,000 is more than enough for a 6 night stay.
An alternative plan for beginners:

Similar to the above plan, you’re going to want to get the an Ultimate Rewards earning card.  But instead of using those points for the hotel, you can use them for your plane tickets by transferring to Southwest, United, or another partner to book your flights:

  1. Each person opens a Chase Sapphire Preferred card
    • Annual fees: 0$ because the fee is waived the first year
    • Sign up bonus: 100,000 Ultimate Rewards (50,000 X 2), which is more than enough for 2 roundtrip flights to Costa Rica
  2. Each person opens a Hyatt credit card
    • Annual Fees: $190 ($95 each)
    • Sign up bonus: 80,000 Hyatt points (40,000 each) after meeting the minimum spend of $3,000 in 3 months, plus each person gets another 20,000 if they spend an extra $3,000 in the first 6 months (so a total of $6,000 in 6 months). So that brings the total to 100,000 Hyatt points or 120,000 if both get the extra 20k

Total:

  • $190 in annual fees
  • At least 80,000 Hyatt points which is enough for a 5 night stay at the Andaz Costa Rica
  • 100,000 Ultimate Rewards points.  You can transfer these points to airline partners to book your flights to Costa Rica.

The reason this may not be ideal is that the Hyatt credit card will take up one of your 5/24 “slots”, and it is not even a 5/24 card.  So this card is one that you may want to hold off on until you’re sure you have the Chase cards that you want that are subject to 5/24.

But I do like the idea of using Ultimate Rewards for your flights, because you will have more options.  The previous example I gave would limit your flight options to Southwest because you would need to use the Ultimate Rewards points for Hyatt.

If you’re over 5/24

You will not be able to open a Chase Sapphire card that earns Ultimate Rewards, a Southwest card, or a United card.  But you can most likely get the Hyatt card.

For flights, you can open either an American Express Membership Rewards earning card or an airline card issued by a bank other than Chase.

If you’re wanting to earn the Southwest Companion Pass, you also need to plan around that

All Southwest cards (including the business card) are subject to the 5/24 policy. So if the Companion Pass is your priority, you may want to hold off on a Sapphire card until you have opened the Southwest business card and a Southwest personal card.  Click here to learn more about earning the Southwest Companion Pass.

Remember, points earned from the Southwest credit cards DO qualify for the Companion Pass.  If you transfer Chase Ultimate Rewards points to Southwest, they DO NOT qualify for the Companion Pass.

Conclusion

Anyone can book Costa Rica for almost nothing like we did, but Chase is the issuer of many card options that earn the points and miles needed for this particular trip.  For that reason, it is very important to plan your applications in such a way that you do not miss out on some of the best travel credit cards!

chase cards 5/24 rule

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One thought on “Plan your credit card applications wisely!

  1. Pingback: How to book the Andaz Costa Rica on points (for free!)

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