The famous (or infamous) 5/24 rule

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5 minutes and 38 seconds

The first cup of coffee may or may not have been brewed after a herder noticed his over-energized goats. It's hard to believe those two things can go in the same sentence, but you can read the story for yourself at the link.

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The first cup of coffee may or may not have been brewed after a herder noticed his over-energized goats. It's hard to believe those two things can go in the same sentence, but you can read the story for yourself at the link.

Welcome back to Daily Drop, and happy Star Wars day - “May the 24th be with you,” as they say.

Wait… I feel like I did that wrong…

Oh well, there’s another significant meaning to 5/24, and I’m gonna tell you all about it:

📆 The famous (or infamous) 5/24 rule
💳 The ________ Trifecta: How to pick and choose the best card combos
🚨 LAST CALL (for real this time) to earn 80k points

Also, just to let you know, this ENTIRE newsletter is focused on content around this bank… Since we can’t say their name, it’s easier to get that out of the way now.

📆 The famous (or infamous) 5/24 rule

If you’ve been playing the points and miles game for a while, you probably know about the famous 5/24 rule.

If you haven’t heard of it, that’s great - it means today’s newsletter is going to be useful to you, which means I get to keep my job (yay).

This rule applies to one bank in particular but has a residual effect on your overall credit card strategy.

Generally speaking, this is most important for people who are chasing credit card signup bonuses.

But even if you don’t chase after bonuses, you’ll want to keep this info in the back of your mind. If you neglect it, you could wind up missing out on some amazing offers down the road…

Here’s how it works:

This bank won’t let you sign up for a credit card if you’ve opened five cards in the previous 24 months… hence, the 5/24 rule.

If you have signed up for more than five cards in two years, you would be “over 5/24.”

If you haven’t, you’d be considered to be “under 5/24.”

To be clear, this isn’t so much a “rule” as it is a trend based on millions of data points from people who have encountered this roadblock over the years… Which is to say, it’s pretty much a rule…

Here’s another important point:

While the rule only affects your ability to open cards with this bank, cards opened from ANY bank affect your 5/24 status, as it’s based on accounts that appear on your credit file.

So let’s say you’ve opened the following cards on the following dates from three different banks:

As you can see, all five of these cards were opened less than two years ago. That means you’re OVER 5/24 and, therefore, would not be allowed to sign up for this card or this card, since this bank has the 5/24 rule.

In a week, on May 31st, you would then be UNDER 5/24 since that first card was opened more than 24 months prior. So a week from now, you’d be UNDER 5/24 and allowed to open up any of the aforementioned cards.

I know this is dense, but stick with me… 😵‍💫

Now you may be wondering,

“If I’m over 5/24, can I still sign up for cards from other banks?”

And the answer is yes, you can. This bank is the only one that has this rule, and therefore 5/24 only affects your ability to sign up for their cards specifically.

That brings us to the strategic element of this rule…

Let’s say you’ve opened four cards in the last 24 months. You’re under 5/24. You’re very happy about this because there’s a new card with an epic 80,000-point welcome offer (this has since expired) that has you more excited than when your first child was born (it’s okay, you don’t need to pretend otherwise).

But then this OTHER card comes around with an equally good welcome offer.

You know that as soon as you sign up for one more card, you’ll be over 5/24.

So what should you do?

Easy. Sign up for the card from the bank that has the 5/24 rule.

Since the second card isn’t from the bank with this rule, the fact that you’ll then be over 5/24 doesn’t matter, and therefore you can just get both of them - but only if you do it in the correct order.

Look… I know this would be way easier if we could just say the names of these banks and cards. It’s frustrating, but I’m doing my best to explain things…

One more final point:

How do business cards affect 5/24?

The answer is… they don’t. Since many business cards don’t show up on your personal credit report, they don’t get taken into account when calculating 5/24.

However, in order to APPLY for a business card with this bank (like this one, for example), you’d still need to be under 5/24 to be approved, since they still need to check your personal credit.

Phew… that was a doozy. There is plenty more I could say about this rule, but I think you can start to imagine how you can strategize around this.

At the end of the day, many of you don’t sign up for enough credit cards to be affected by this in a major way.

However, as you start to ramp up your travel hacking game, you’ll want to keep track of your 5/24 status so you don’t miss out on a great bonus down the road.

💳 The ________ Trifecta: How to pick and choose the best card combos

Now that you’ve got an idea about what this 5/24 thing even is, you should understand another closely related concept that gets us travel-hacking credit card nerds so excited.

And that is the idea of building and utilizing a credit card trifecta (or duo) to maximize your point-earning potential 🎉

Essentially, it’s taking two or three cards from the same card issuer (aka the same bank) and using them strategically to make specific purchases based on their highest individual spending categories.

If you pick up what I’m throwin’ down.. this is going to turbocharge your earnings across multiple cards.

But before I talk more about this concept, I want you all to understand there is no single combination that is the perfect and correct combination. It’s not a “one size fits all” situation.

There are definitely some combos that will stand out as better than others, but what works best for me, may not necessarily work best for you.

It all comes down to determining which cards would bring you the most value based on things like spending categories, travel preferences, how much you want to pay in annual fees, and additional perks/benefits.

But for example, it’d be a good idea to have a group of cards from one issuer where maybe the first card gets you 5-10x points on travel (in their travel portal) and 3x points on dining. Plus, a little lounge access thrown in there 🥂

Your alternative first card could be the one we all know and love, but can’t name… The one that’s gifting you an 80K sign-up bonus ENDING TODAY. And would also help you earn 5x points on travel (booked in the portal), 3x points on streaming and dining, and 2x points on travel (not booked in the portal).

A second card could get you 5% cashback (aka 5x points) on rotating quarterly categories (like Amazon, as one example).

And a third card could get you 1.5% back (aka 1.5x points) on all other eligible purchases (whereas your other two cards would only get you 1x points on “everything else”).

Keep in mind, this is ONE EXAMPLE of how to build a card combo, and you’re certainly free to mix and match as you please!

But hopefully, you can see how paying attention to spending categories, and then using a specific card that gets you the most points on a particular spending category is going to help you multiply your points and earn at a faster rate.

I wouldn’t use the third card to purchase travel if I was only getting 1.5x points (versus 5-10x points on the first card!).

And I wouldn’t use the first card for my everyday purchases that weren’t categorized… because I’d only get 1x point per dollar (when I could get 1.5x points by using the third card).

You can then combine all your rewards across your multiple cards to have one, massive stack of points to transfer out when needed (like for a DOPE business class seat 😏).

It sounds a bit confusing, and maybe even overwhelming if you’re new to this… Plus, it gets a little hard to explain it fully when we can’t mention too many details here.

HOWEVER, there’s a comprehensive resource on our site that walks through this concept and provides different examples and options of how you could build your own power trifecta or duo!

I’ll leave a big shiny button here so you can go read and digest it for yourself 👇

✨ The Power of a Credit Card Trifecta ✨

🚨 LAST CALL (for real this time) to earn 80k points

I know it probably seems like we’re stringing you along at this point, but I promise we aren’t…

Last week, we thought this amazing offer was ending… But as fate would have it, they extended it to the end of the day today! Wooh!

Is it a coincidence that the bank with the 5/24 rule ends one of their best offers of all time on May 24th?

Gee, I don’t know. Probably not.

Anyway, you probably know about the offer right now, but in case you don’t, make sure you check it out. You can easily earn thousands of dollars worth of value from it if you play your cards right.

Even if you call them five days from now and they change the decision, you’ll still get the current welcome offer as long as the original application is submitted by the end of the day.

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