The ultimate guide to credit card application restrictions

If you’re relatively new to the points and miles world, you
might be a bit gun-shy when it comes to applying for new credit
cards. Most of my friends and family members find it hard to
believe that I currently have 17 active travel rewards credit cards
in my wallet and pay over $1,000 per year in annual fees. Just
about every week I hear something along the lines of, “Aren’t
you afraid that you’ll wreck your credit score?” While it’s
true that card applications will
temporarily lower your score
as a result of the new hard
inquiries on your profile, there are
many other things
that go into calculating your credit
score.

Still, you want to make sure that any applications you make have
a high probability of being approved. After all, if an application
is denied, you’re taking a
hard inquiry on your credit report
(and the resulting temporary
drop in your score) without any upside. Also, many top issuers have
added additional restrictions over the last few years that make it
harder to get approved for a new card and/or earn a welcome bonus,
so it’s important to know which bank has what rules before you
apply. While you can never guarantee that your application will be
approved, you really want to avoid wasting an application when you
have absolutely no chance.

With all that in mind, today I’ll take you through these
restrictions for all of the major issuers on the market today:
American Express, Chase, Citi, Bank of America, Barclaycard,
Capital One and Wells Fargo. For this analysis, I’ll look at
three main factors to consider for each individual issuer as you
plan your application strategy:

  • Number of cards
  • Number and timing of applications
  • Welcome bonuses

One disclaimer before diving into this analysis: the majority of
these restrictions aren’t considered hard-and-fast rules
applicable to every single scenario. I’ve heard stories of
exceptions to just about every one of them. This works in both
directions — you could completely ignore a restriction and still
get approved/earn a welcome bonus, or you could follow every
recommendation perfectly, yet still get denied for a card. As the
saying goes, YMMV (“your mileage may vary”).

In This Post American Express (Photo by The Diamond Brothers)
American Express has a slew of valuable cards but also imposes some
strict application requirements. (Photo by The Diamond
Brothers)Number of cards

There’s a general rule of thumb with American Express when it
comes to how many credit cards you can have in your name. The vast
majority of reports in the last year indicate that you’re allowed
to have a total of five Amex credit
cards
open at any one time. This includes both personal
cards and business cards, but generally doesn’t apply to charge
cards like the
Platinum Card® from American Express
. Many people have
reported a similar limit of five charge cards per person, but given
that Amex only issues a handful of charges cards to begin with,
this shouldn’t be a problem for most people.

Now, I use the term “general rule of thumb” because I’ve
read isolated reports of readers having more than five American
Express credit cards at any one time, especially after the
Hilton conversion from Citi to Amex
. However, that appears to
be much more the exception than the norm, so I’m sticking with
the number above. If you currently have five Amex credit cards, I
wouldn’t encourage you to apply for another. In fact, the last
time I applied for an Amex card (the
Delta Reserve® Credit Card from American Express
), I was
initially denied. I ended up having to cancel my Amex EveryDay card
and call back in to get a representative to override the automatic
rejection that occurred because I had five Amex credit cards at the
time of my application.

In case you’re wondering about the
difference between credit and charge cards
, it’s relatively
simple: Charge cards don’t have a fixed spending limit but must
be paid in full every month, while credit cards have a fixed credit
limit but also allow you to carry a balance from month to month.
That being said, I strongly discourage you from ever carrying a
balance — it actually tops my 10
commandments for travel rewards credit cards
. Carrying a
balance and accruing interest will more than negate any points or
miles you earn on the card, and will also have a negative impact on
your credit score.

Number and timing of applications

When it comes to American Express’ rules for how many
applications you can have and how frequently you can submit them,
again, there aren’t any published, hard-and-fast requirements.
However, I did find a number of data points that may help you
decide how to apply:

  • You can apply for two cards in a single day — one
    credit and one charge card, or two charge cards
    . However,
    many reports indicate that at least one application will likely be
    put on hold as a fraud prevention mechanism, especially if you’re
    applying for two charge cards (though some have been instantly
    approved for a credit and charge card on the same day). In
    addition, there’s no guarantee that those applications will be
    combined into a single hard inquiry on your credit report, though
    it does happen.
  • You may be able to get approved for more than two cards
    in a 90-day period
    . However, most of these reports were a
    combination of credit and charge cards, so the general rule of
    thumb is that you shouldn’t apply for three or more Amex credit
    cards within three months.

Welcome bonuses
If you want to earn welcome bonuses on the Hilton Amex cards (for
example), it’s critical to make sure you’re eligible.

In the past, American Express would allow you to earn welcome
bonuses on the exact same card multiple times. However, this
hasn’t been the case since 2014, when the issuer
began restricting customers to one bonus per card per lifetime
,
no matter how long it’s been since you applied.

For example, here’s the specific language from the offer terms
page for the Amex Platinum card:

“Welcome bonus offer not available to applicants who have or
have had this product.”

The sentence is crystal clear; if you currently have (or have
had) this particular card, you are not eligible to earn the welcome
bonus (currently 60,000 points after you spend $5,000 on purchases
on your new card in the first three months of card membership).
There’s similar language on the application pages across Amex’s
entire portfolio of cards, including the
Gold Delta SkyMiles® Credit Card from American Express
and the

The Amex EveryDay® Credit Card from American Express
. It even
extends to previous versions of cards in certain instances, like
the
Hilton Honors American Express Surpass® Card
(formerly known
as the Hilton Ascend):

“Welcome Offer not available to applicants who have or have
had the Hilton Honors Surpass® Card or the Hilton Honors Amex
Ascend Card.”

Even though the Hilton Ascend card is no longer available,
you’ll likely be ineligible for the welcome bonus on the Surpass
card if you held the Ascend in the past. This is another point that
bears repeating: you lose eligibility for future Amex welcome
bonuses by holding a credit card, not by earning the bonus on it.
This is why you should always
think twice about upgrading or downgrading an Amex card
,
especially if there’s no bonus attached.

When these restrictions were initially launched, they didn’t
apply to small business cards, but you’ll now find the exact same
verbiage on those application pages. However, note that the
personal and business versions of the same card are treated as
separate, so you should be eligible to earn the welcome bonus on
both once during your life.

For example, let’s say that you’re a current holder of
the Amex
Platinum
 (the personal version). You’ve received some great
value out of it but now want to get
The Business Platinum® Card from American Express
for your
small business. Even though these are both Platinum cards, you’re
eligible to earn the welcome bonus on each of them once in your
lifetime.

But what if you can’t remember whether or not you’ve had a
specific card before? Fortunately, American Express just launched a
new tool that allows you to
double-check your eligibility for a welcome bonus
. This check
actually takes place during the application process but before you
officially submit your application, and allows you to withdraw the
application if you’re not eligible for the bonus before Amex
performs a hard inquiry on your credit report. While most readers
probably can recall their Amex card history, it’s nice to have an
insurance policy to make sure you’re eligible before incurring a
hard inquiry.

This eligibility tool also invokes the second phrase of legalese
that’s been added to most Amex credit card applications:

“American Express may also consider the number of American
Express Cards you have opened and closed as well as other factors
in making a decision on your welcome offer eligibility.”

Even if you’ve never held a specific Amex credit card before,
Amex’s proprietary anti-fraud algorithm might determine that
you’re not eligible to earn a bonus on it. We don’t know
exactly what behaviors this system flags, but things like closing a
credit card as soon as you earn the welcome bonus (or even closing
it exactly one year after you opened it) don’t look good. This is
why, even though I never use the card in my day-to-day life, I’m
considering paying the annual fee on my Delta Reserve card next
year rather than closing it at the one year mark. $550 is a lot of
money to flush down the drain, but it’s a small price to pay (in
my opinion) to stay in Amex’s good graces.

Given this restriction, you want to time your applications very
well to make sure you’re getting the highest possible welcome
bonus. And don’t forget to check the CardMatch
tool
to identify if you qualify for a possible 100,000-point
targeted offer
on the personal version of the Amex
Platinum.

Chase Number of Cards

From my personal experience and research online, it appears that
Chase doesn’t formally limit the number of credit cards you have.
I currently have seven Chase-issued cards:

The information for the IHG® Rewards Club Premier Credit Card
has been collected independently by The Points Guy. The card
details on this page have not been reviewed or provided by the card
issuer.

Other TPG staffers have even more. For example, my fellow
Editor-at-Large
Zach Honig has had as many as 11
. As a result, it’s
relatively safe to assume that Chase doesn’t put a hard ceiling
on the number of cards you can have.

However, the issuer will often restrict how much total credit is
extended to you across all your Chase cards. For example, let’s
say you have four Chase credit cards with $25,000 credit lines on
each, and Chase has determined that you should only have a total
spending limit of $100,000. It’s highly unlikely that you’ll be
immediately approved for another credit card. This isn’t due to
the fact that it’s your fifth card — it’s simply a function
of Chase deciding that you should only have a combined credit line
of $100,000 across all of your accounts.

Fortunately, all hope is not lost if this happens. You can call
Chase’s reconsideration line (1-888-245-0625) within a few days
of your application and ask to shift around credit lines to get
approval. You’ll then have five credit cards with the same
$100,000 of total credit. I had to do this a few times when I was
first building my credit history with Chase, though I haven’t had
to on my last two applications.

Number and timing of applications

Like the number of cards, there isn’t a formal, consistent
policy that limits the number or timing of your applications with
Chase. I’ve read that the general rule of thumb is to limit
applications to one personal and one business card within 90 days,
but I’ve also read reports of applicants being approved for two
personal cards in a single month. If you manage to get approved for
two personal cards on the same day, it’s likely that you will
only have one hard inquiry on your account (business cards
typically pull from a different department). Again, though, the big
limitation is how much overall credit Chase will extend to you
based on your credit history and profile.

It’s also worth pausing to talk about risk tolerance here.
Chase (and Amex) have been known to unilaterally close all accounts
of users they deem to be high-risk or potentially fraudulent.
Unfortunately, on paper, award travel enthusiasts look very similar
to calculated criminals. You might want to consider taking things
slower and not rushing through your applications with Chase, even
if there’s a chance you can get approved for more cards in a
shorter period of time. One common thread I’ve heard among Chase
shutdown stories was a barrage of recent credit inquiries (with
Chase and other issuers) in the months leading up to the
shutdown.

Chase’s one hard and fast application rule is commonly
known as the 5/24 rule
. It initially popped up in 2015 but
spread across most of the issuer’s portfolio of cards in 2016.
The rule is relatively simple on the surface: if you’ve opened
five or more credit cards with any issuer over the previous 24
months, you will almost certainly be denied for most Chase-issued
credit cards with little to no chance at reconsideration.

A few notes about this policy:

  • Chase will look at all accounts across all
    issuers
    . A common misconception about this rule is that
    Chase only looks at new cards that it issued. This is not true. If
    you’ve opened two Chase cards, two American Express cards, a
    Capital One card and a Bank of America card in the last two years,
    you’re at 6/24 and will likely get an immediate denial notice on
    most Chase cards.
  • You may be able to get approved if you’re just an
    authorized user
    . While success isn’t guaranteed, you may
    be able to
    get around the 5/24 rule
    if you’re just an authorized user on
    any of your “new” accounts from the previous two years. After
    immediately getting denied for my
    United Explorer Card
    , I was able to successfully get a phone
    agent to reconsider my application because the fifth new account on
    my credit report was actually my wife’s. However, I’ve
    generally read that this will only work if you’re right at five
    new cards in 24 months and one of them is an authorized user
    account (which happened to be my exact situation). Depending on
    your personal circumstances, you might want to consider removing
    yourself as an authorized user and waiting 30-60 days to apply so
    there’s less chance of the system automatically rejecting
    you.
  • Business cards generally don’t count. Even though you
    list your social security number when you apply for business cards,
    the accounts themselves sit on a separate business credit report
    and as such usually do not count against your 5/24 status. There
    are a few exceptions to this, such as business cards issued by

    Capital One
    Discover
    and TD Bank, which will show on your personal credit report and use
    up a 5/24 slot.

Welcome bonuses
Both Chase Sapphire cards can be quite rewarding, but be sure you
understand how the sign-up bonuses work.

Chase also imposes restrictions on earning sign-up bonuses,
though these aren’t as strict as those of American Express. In
general, you won’t be able to earn a sign-up bonus on a Chase
card if you currently hold that card in your wallet or if you
earned a sign-up bonus on that exact card in the last 24-48
months.

Here’s the specific language on most Chase cards’
application pages (this was copied from the
Chase Freedom Unlimited
‘s page):

“This product is not available to either (i) current
cardmembers of this credit card, or (ii) previous cardmembers of
this credit card who received a new cardmember bonus for this
credit card within the last 24 months.”

In other words, you must cancel or downgrade a card before
reapplying for it, but you don’t need to wait two years to apply
after cancelling. The 24-month waiting period starts when you
receive the sign-up bonus, not when you cancel the card.

It’s also worth noting that there are some slight variations
to this policy that apply to specific cards:

Interestingly enough, this “rule of pairs” doesn’t (as of
now) appear to apply to the
IHG Rewards Club Premier Credit Card
, which was launched
in April 2018
to replace the old IHG Rewards Club Select Credit
Card.

Citi The Citibank Corporate Office & Headquarters are viewed in midtown Manhattan July 14, 2014. Citigroup on Monday agreed to pay $7 billion to settle allegations it misled investors on mortgage-linked securities ahead of the financial crisis in the latest US crackdown on a financial giant. US Attorney General Eric Holder, calling Citi
Like the other two major issuers, Citi imposes its own set of
credit card application restrictions. (Photo by Timothy A.
Clary/AFP/Getty Images)Number of cards

Like Chase, Citi typically doesn’t limit the overall number of
credit cards you’re allowed to have, instead using the same
approach of limiting your overall credit across all of your Citi
cards. Once you’ve reached that tipping point, you’ll likely be
given the “application pending” notice when you apply for a new
card. A quick call to Citi’s reconsideration line
(1-800-695-5171) should help you get approved by moving some credit
from one card to the new one.

That being said, one of my colleagues was actually immediately
denied for the CitiBusiness® / AAdvantage® Platinum Select®
World Mastercard® in January 2018, with the reason given that he
had reached the “maximum number of Citi credit cards.” It’s
unclear if that was based on the number of Citi cards he had open
at the time of his application (seven) or if it was based on the
number of cards he had opened with the issuer across his entire
lifetime. Citi is also known to be incredibly sensitive to recent
inquiries, so after you’ve used up..

Source: FS – All-Travel destinations-News2
The ultimate guide to credit card application restrictions