A few disclaimers before we get started
Richard Kerr of ThePointsGuy.com (a BankRate website [credit card referral company])
I don’t know him personally, he seems like a nice enough guy. While this post was partially a result of comments he recently made about the Chase 5/24 rule, it really is more about the state of travel blogging and what we have become as both consumers of the information and providers.
Chase’s 5/24 Rule
JP Morgan Chase Bank (Chase) offers credit cards and incentivizes card holders by providing rewards for spending on their cards. They earn money from retailers through transaction charges, interest from some customers, and annual fees. They also cross-sell to their partners and for other products they offer. The 5/24 Rule is as follows:
Applicants must not exceed five new credit accounts within the last 24 months.
Dr. of Credit has a great article that explains which cards it applies to and the ins and outs. It’s exhaustive, worth a read and he is the expert so if you want to know more about the rule itself, check out his post on the Chase 5/24. There are reports of some exceptions to the rule for those who have more than five new accounts in the last 24 months – those (unconfirmed) exceptions include: Chase Private Clients (qualifications include having $15,000 in a Chase account) or those that have been pre-approved but lie outside of the 5/24 Rule. Chase Private Client accounts are a very, very narrow section of the population – narrow like ‘a camel through the eye of a needle’ kind of narrow. However, there have been some reports of people having success on in-branch applications that are not private client, and do exceed the 5/24 rule but were pre-approved for the offer without being told so. At least in the case of the only example I could verify personally from an unnamed editor to this very site, they were not a Private Client, and actually had 9/24 with six of those being sole accounts (not authorized user accounts), but that editor did have an existing checking account with Chase. I can’t imagine those that do not have an account with Chase being pre-approved yet not notified about the offer unless they walk into a branch and ask, but I have been wrong before and I will be wrong again.
Richard Kerr of ThePointsGuy.com explains how the 5/24 Rule Does Not Exist
Last week I listened to the Saverocity Observation Deck podcast and the discussion of the Chase 5/24 Rule came up (starts around minute 53, skip there if you like).
Rich said, “It’s not a rule, it’s not even…” he trails off and gets a little worked up then summarizes. “It is a hypothesis that was proselytized by people with no solid evidence and then the phenomenon of groupthink that takes over many, many writers in [the miles and points] hobby continued this 5/24 Rule ‘idea’… and nobody ever went back and looked with hard evidence, ‘this is real, here’s the data’…”
He then goes on in regards to how bloggers perpetuated the ‘idea’ of the rule. “[Miles and points] writers see a headline and see a source and copy it and write about it and it’s just not true.”
So to be clear Richard Kerr has stated that the 5/24 Rule is a hypothesis, created and perpetuated by careless travel hobby writers with a complete lack of evidence. In lieu of “hard evidence” travel hobby writers qualify their story by “hat tipping” or crediting a source that previously wrote about it (not necessarily making the information true, but rather just showing where that writer found the information).
Shawn Coomer Says It Does Exist… Kind of
Shawn Coomer of Miles to Memories (a Boarding Area blog), also on the podcast then chimed in with a different approach to the Rule, although ever so slightly.
“The one thing that’s difficult with the banks is that they’re not exactly telling us what their rules are”
Shawn is absolutely right. Chase isn’t publishing any of their approval or denial qualifications which speaks to some of the lack of hard evidence. While Rich comments that there is a lack of hard evidence, Shawn points out the obvious – banks are not going to publish this information so hard evidence is somewhat impossible to obtain. Shawn continues,
“I do agree with Rich that it’s definitely not a hard rule” But then backtracks that statement pretty hard by saying, “I personally changed it to the 5/24 ‘guideline’, because I do believe that there is an over-arching guideline within Chase now for most cards, and those are typically the numbers [5/24] that they are using.”
Well, that sounds like a complete endorsement that yes the 5/24 Rule exists, and that Shawn has done the research to support it – while somehow at the same time sounding like he completely agrees with Rich. He then adds why it is important (and presumably why he has been researching it and writing about it),
“So people can form a good strategy for themselves… to figure out if it makes sense for them to apply and what sort of chance they have of getting approved.”
Fair enough Mr. Coomer. Accurate too. I hadn’t personally looked into it closely to this point as I haven’t been applying for many cards as of late so it really hasn’t been an issue for me. I trust writers like Dr. of Credit who are known for their accuracy and insight.
But at the same time, Rich is right too but less about the Rule than about the new standard for hobby writing. There is a lot of groupthink in our hobby. Don’t believe me? Just subscribe for a single day to Boarding Area’s RSS feed and you will see the same kinds of headlines from dozens of writers. Seth Miller, a Boarding Area author himself, commented on another podcast for which he is a regular co-host, Dots, Lines and Destinations, about a change American Airlines made that had previously been announced, however on the day it came into effect there were 20 posts just on Boarding Area at the time of his publication about it; 21 after he wrote about other authors writing about it – how Meta is that?
The problem is readership, clicks and the money that follows. Those that write as a full-time job, or those who write to try and make it their job some day – need readers to choose their site over another source. Those views turn into occasional clicks, clicks into conversions and conversions into checks that allow them continue writing about travel, undoubtedly their passion. But there comes a point when chasing the almighty view is greedy, and irresponsible. That is where Rich is coming from, Hobby writers put the importance of getting a post up first above whether the story’s valid and purposeful; and I think that’s a really honest and fair statement about the state of our readers, our writers and our lifestyles.
The tale of the Clickbait – but…
Along those lines, take Clickbait King, Brian Cohen of TheGate, now on Boarding Area, formerly of FlyerTalk. He uses headlines that end in question marks like:
“11 Tips and Tricks for Sleeping Aboard Airplanes?”
“8 Ways to Upgrade Your Hotel Room and 6 Ways to Avoid the Worst Hotel Room?”
“People are Upset About Delta Air Lines Offering Suites in Business Class?”
“These Five Scams Snare Even Seasoned Travelers?”
All of those recent examples are (apparently) from his frequent segment, ‘Stuff I find elsewhere and re-post that will cause readers to click just to prove they know more than other idiots who are writing about these things.’ Then there is the ever-so-click-bait-y (that’s not a word) ‘but’ title:
“Spend Fewer SkyMiles on Award Tickets to Europe in Either Cabin — But…”
“Get a Free Burger at Shake Shack Tomorrow — But…”
I am not sure if it’s a case of lack of respect for the reader, meaning that the author of click-bait travel posts (Brian is by no means alone) believes that the reader is so dumb that if you do not bait them into your post with obvious and often conflicting or controversial statements they will simply not read it and instead get back to Pokémon Go! Or rather, if it is a lack of self-respect of the writer them-self, that if you just titled a post like the above, “Delta offers business and coach awards near previous award levels, calls it sale anyway” then people just wouldn’t read it? His heavy use of this clickbait idiocy implies that the content is good enough to post, but people won’t read it unless they have to know why the “but” (and following ellipses) are there! What could they be missing out on? Writers that I greatly admire do this from time-to-time, Gary Leff is a great example. I just want to scream, “Gary, I love your work and I will read it if it is interesting to me anyway, but don’t talk down to me just to get a click.”
The new credit card from Chase is exciting to travelers, travel hackers and writers but because there is so many articles about it, writers have to make their post standout. The question remains if the Rule is real. Coomer says the rule exists but not for everyone, and Kerr says it’s all myth, perpetuated by lying liars and the writers that tell their stories. So how about a little field research?
I applied for the Chase Sapphire Reserve and you won’t believe what happened next… – but hurry?
I got a denial. They weren’t even gentle about it. For the avoidance of doubt I really should have been a prime candidate for them. My credit score is within the range of 800-830 depending on the bureau, my earnings exceeded the purported (but of course unverified and unconfirmed by Chase) range for applicants, my debt ratio was under 10%. Those reviewing my application can see that I use my Chase Sapphire Preferred card as my daily use card, they can see that they are making money off of me yet they still said, ‘thanks but no thanks’ to the new card – an upgrade from my current card. I have had a relationship with them through one card or another for several years, have always had my cards in good standing, have never made a late payment and have also developed a relationship with them on the business credit card side of their operation. What’s not to like, Chase? And if the 5/24 rule is not hard and fast and exceptions can be made, wouldn’t one of your customers that exceeds all the other criteria and uses your product as their primary card be that exception?
Oh that’s right, the “hypothesis” of the 5/24 Rule. So this writer, conducting his due diligence (after the application has already been filed) thought to confirm his credit report and low and behold there are more than five new accounts in the last 24 months. To be fair to Chase, I wasn’t close to five, it was nine. I won’t be eligible for one of their shiny new credit cards until they either revise their “over-arching guideline” or May of 2017 (assuming I do not apply for a single other card or line of credit until then).
As any informed and likely indignant credit card enthusiast would do, I called up Chase to ask them to reconsider my “pending” status. I was informed that the agent would look over my application and get back with me shortly. It took less than the two to three minutes I was quoted before the rep came back and stated,
“Your debt ratio, earnings and score are all great. But unfortunately today we cannot approve you because you have had more than five new accounts in the last two years” – Chase representative.
I’m okay at math, not Russel Crow or anything, but okay, and the last time I checked 24 months works out to exactly two years.
While I can appreciate what Rich is trying to convey: hobby writers are simply reprinting what appears elsewhere in the news in order to drive traffic to their site by any means possible (one writer seems to exclusively syndicate other people’s content through links and a two or three sentence description); I can also now look him squarely in the eyes and call BS. The Chase 5/24 Rule absolutely exists, I have my own hard evidence (by which of course I mean soft and anecdotal but at least a quote from one of their reconsideration reps). Regardless of how many years you have been with Chase, how profitable you may be for them, how reliable your payments, how high your score, how great your ability to repay, and how low your debt ratio- it all comes down to whether or not you have opened 5 new accounts in the last 24 months.
And yes, to answer your question, I am bitter.