Credit card application rules: Can you qualify for a new welcome bonus? Issuer rules explained

Credit card welcome bonuses have surged in popularity in recent years. In fact, they have become such an integral feature of credit card applications that it’s hard to find a rewards credit card offer that doesn’t offer some sort of bonus.

Not surprisingly, bonuses have become much more generous over the years due partially to increased competition. I remember early in my career, which has involved tracking card trends for over 27 years, how exciting it was to see an offer for 25,000 bonus miles on airline reward cards. Now, several cards offer 75,000 bonus points/miles or more (typically after meeting certain spending requirements), which may be enough for multiple airline tickets. In addition, cash bonuses are often in the $200+ range!

Despite bonuses getting more aggressive, card issuers are also starting to put more restrictions on bonus offers. Chase, for example, has recently gotten more restrictive on how often you can qualify for a bonus for their popular Sapphire Cards.

Such restrictions mainly target cardholders identified as “churners.” Churners, according to my colleague Maryalene Laponsie, open a new card account, then charge only enough to earn the welcome bonus, and either cancel or abandon the card before moving on to the next bonus offer.

As you might expect, churning can lead to negative consequences, including getting denied for an application, which in turn can lower your credit score. Worst-case scenario, some card issuers may even blacklist you if you are a repeat offender. Additionally, applying for multiple credit cards in a short period can trigger additional scrutiny from credit card issuers, as they monitor for patterns that may indicate churning.

While most cardholders want to avoid churning, according to a CardRatings.com survey, there is a lot of confusion about what exactly churning is and how to avoid being labeled as a churner. It is important to note that there are no hard and fast rules across all issuers, and credit card issuers’ policies can change frequently. It is my hope that this article will help educate you and empower you on this important topic.

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While it is certainly smart to maximize your card rewards, it’s important to do so without violating any credit card issuer’s policies. Avoiding being labeled as a churner can help ensure you continue to receive the best bonus offers available.

What are credit card issuer application rules?

When you apply for a card in hopes of scoring a free airline round-trip ticket to Paris, you may not be aware that various credit card rules can affect when and even if you get your bonus. Many cardholders are aware that most issuers require that you spend so much money on your new card within a limited time frame to get the bonus. For example, earn 75,000 miles once spending $4,000 within the first three months of opening an account.

While many cardholders are aware of minimum spending credit card application rules, few consumers are aware of other, less well-known limitations. These rules vary by issuers and will be discussed in detail below. The main takeaway, though, is that some issuers have put limits on how often you can qualify for a given bonus. These guidelines tend to apply more to cardholders who apply for multiple cards within a relatively short time frame. And some major credit card issuers distinguish between personal and business cards when applying these rules, so the restrictions may differ depending on whether you are applying for personal cards or business credit cards.

It should be noted that credit card sign-up bonuses are not hard to get for most consumers (assuming you have good credit). In other words, there are not a lot of application rules or hoops to jump through for most credit cards.

Megan Daniels, a travel writer and founder of JourneyCurrencies.com, agrees. She notes that “the general process involves applying for and being approved for a new card, then spending a specified amount on that card in a defined amount of time. Unless you are obtaining multiple cards, most application rules won’t apply.”

Jason Steele, a nationally recognized expert on card rewards, adds that bonuses aren’t hard to get, but that “some card issuers have rules to prevent people from signing up for the same cards and receiving the bonuses multiple times.”

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You can apply for multiple credit cards from the same issuer. Major credit card issuers often have separate rules for personal cards and business credit cards, so be sure to review the specific policies for each type before applying. Steele notes that card issuers typically offer many types of rewards cards and are usually happy to have you hold and actively use multiple accounts.

How to check if you’re eligible for a bonus

If you’re interested in applying for a certain card and have never applied for a card with that particular issuer (i.e. American Express, Citibank, Chase, etc.), then you are likely eligible for the bonus that is advertised, assuming you meet the spending requirements and your account is in good standing. Keep in mind that only eligible purchases typically count toward earning bonus rewards or welcome offers, and your card membership status may affect your eligibility for these incentives.

Another bit of good news- a few issuers may prescreen your application to see if you prequalify for the bonus. Steele points out that American Express, in particular, will let you know if you qualify before you submit your application online. Chase is reportedly doing something similar for some offers.

How to track your credit card welcome bonus

Tracking your bonus is important in order to ensure that you actually receive the points/miles that you desire, especially since some offers have multiple bonus opportunities. For instance, I recently applied for The New United(SM) Explorer Card, which at the time of application, offered 60,000 bonus miles once I spent $3,000 on purchases in the first three months of opening an account. Additionally, part of the offer was an opportunity to earn a $100 United travel credit once spending $10,000 within a calendar year.

I was fortunate enough to get both bonuses and flew for free with my wife to Miami on our honeymoon. I also got to experience the luxuries associated with airport lounges for the first time- an added benefit of my new card.

Daniels opines that “it can take a little organization and proactiveness to ensure you meet that minimum spend amount. It’s also always good practice to keep spending past the minimum amount in case you have later returns that would put you back under that minimum spend limit at a later time.”

 ➤  SEE MORE:How to earn a credit card welcome bonus

To track your credit card welcome bonus, most card issuers provide easy-to-use tools within your online account or mobile app. These platforms typically display your progress toward meeting the required spending threshold, showing how much you’ve spent and how much remains to qualify for the bonus. Additionally, some issuers send email notifications or alerts when you reach key milestones. It’s important to regularly monitor your eligible purchases, as only certain transactions count toward the bonus, and returns or adjustments might affect your progress. Keeping an eye on your account ensures you don’t miss out on earning your valuable welcome bonus within the specified timeframe.

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If you’re wondering how long it will take to get your bonus, Steele explains that “bonuses usually post when your statement closes, following the completion of the minimum spending requirements.”

What is Chase’s 5/24 rule for card bonuses?

Chase’s 5/24 unwritten rule basically works like this:

• If you have opened five or more personal credit card accounts in the last 24 months with any bank, Chase will likely not approve you for a new Chase card
• Daniels adds that most business cards (even Chase cards) generally do not add to your 5/24 count, but you must still be under 5/24 to be approved for a new Chase business card
• The best way to avoid this rule is to limit the number of accounts you open

As noted above, one exception to Chase’s credit card approval rules is that the issuer has recently gotten stricter on how often you can qualify for a bonus for their Sapphire Cards. Reportedly, you can only qualify for a bonus from a Sapphire card (two consumer cards and one business card) once per lifetime now.

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Wondering what the best welcome bonus offers currently are? We make it easy by offering updated comparisons of popular sign-up offers.

What is the American Express “Once per Lifetime” bonus rule?

The “Once per Lifetime” policy from American Express is similar to Chase’s rule for Sapphire:

• If you open a card, you will not be able to apply for and receive a welcome bonus for that card again during its “lifetime” limits
• This still applies even if you decide to downgrade and cancel your card
• Luckily, according to Daniels, American Express will inform you if you will be approved and whether you are eligible for a welcome bonus before you submit your application (and they run a hard pull on your credit)

American Express credit cards have specific rules regarding bonus eligibility and card limits, so it’s crucial to review these before applying.

As with many policies, there are exceptions to the Amex welcome bonus rules. American Express limits customers to a certain number of credit and charge cards simultaneously, so it’s important to be aware of these restrictions to avoid unnecessary credit inquiries. For example, the terms and conditions of the popular American Express(R) Gold Card discontinued_disclaimer (American Express is a CardRatings advertiser) include language such as:

“You may not be eligible to receive a welcome offer if you have or have had this Card, the Premier Rewards Gold Card, the Platinum Card®, the Platinum Card® from American Express Exclusively for Charles Schwab, the Platinum Card® from American Express Exclusively for Morgan Stanley or previous versions of these Cards. You also may not be eligible to receive a welcome offer based on various factors, such as your history with credit card balance transfers, your history as an American Express Card Member, the number of credit cards that you have opened and closed and other factors.”

Do other major credit card issuers have similar rules?

Most other major card issuers have limits on welcome bonuses. However, Steele cautions that “few of these rules are officially documented rules, and that there are many factors that affect your application (other than just bonus rules).”

Here’s a summary of credit card rules for Citi, Bank of America and Capital One:

Citi 48-month rule

Citi’s 48-month rule is simply that you can’t get a bonus for a specific Citi card if you’ve received that bonus within the last 48 months. This includes cards that are in the same “family.” For instance, the Citi Strata Premier(R) Card (Citi is a CardRatings advertiser), which allows you to earn signup_reward bonus points after spending signup_bonus_spend_amount in the first three months, has the following terms, according to Citi:

“Bonus ThankYou® Points are not available if you received a new account bonus for a Citi Premier® or Citi Strata Premier® account in the past 48 months or if you converted another Citi credit card account on which you earned a new account bonus in the last 48 months into a Citi Premier® or Citi Strata Premier® account.”

Citi cards often have a total credit limit across all accounts, meaning your overall credit limit is shared among your Citi cards. If you reach your total credit limit, you may need to request a credit line adjustment to be approved for additional cards.

Bank of America 2/3/4 rule

Bank of America’s 2/3/4 rule limits the number of new cards that you can get approved for within a certain time frame:

• Two new credit cards per two-month period
• Three new credit cards per rolling 12-month period
• Four new credit cards per rolling 24-month period

There is no strict limit on the number of America cards you can hold, and many customers manage multiple Bank of America cards and credit lines simultaneously, offering flexibility in card management and credit allocation.

On a positive note, Bank of America’s credit card application rules usually aren’t as restrictive on new account bonuses as issuers like Chase and Amex.

Capital One 48-month rule

Capital One’s 48-month rule states that you can’t get the same bonus for the same card within 48 months. The Capital One credit card application rules are fairly straightforward. The popular Capital One Venture Rewards Credit Card, for example, contains the following verbiage:

“Existing or previous cardmembers are not eligible for this product if they have received a new cardmember bonus for this product in the past 48 months.”

Capital One distinguishes between personal credit cards and business cards, and specific limits apply to personal credit cards, such as a maximum number you can hold at one time.

Bottom line

Understanding credit card application rules is essential for maximizing your chances of qualifying for lucrative welcome bonuses while maintaining a healthy credit score. Each major credit card issuer has its own set of guidelines and restrictions, including limits on how often you can earn bonuses, the number of cards you can hold, and how many applications you can submit within certain time frames. By familiarizing yourself with these credit card application restrictions and planning your applications strategically, you can make the most of rewards credit cards and enjoy valuable benefits without jeopardizing your personal finances. Always review the specific card details and terms before applying to ensure you meet eligibility requirements and avoid surprises with your account opening and bonus qualifications.