What Is Credit Card Churning?

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Churning credit cards involves getting multiple new credit cards to earn the welcome bonuses and then stopping using them or even canceling them, only to repeat the process again and again. While card churning gives you the ability to accumulate reward points, miles or cash back quickly, it also has the potential to hurt your credit score. And you run the risk of accumulating debt.

Credit card issuers don’t look at churning too kindly. Several follow measures to make the process more difficult and less profitable for consumers. Some even shut down accounts upon detecting such activity.

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MoneyGeek’s Takeaways

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Credit card churning gives you the ability to earn welcome bonuses through different credit cards.

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Churning credit cards may work well for you if you pay your balances in full each month.

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When not done right, churning credit cards has the potential to hurt your credit score.

What Is Credit Card Churning?

Back in the day, before credit card companies wised up to the churning of cards, people would get new credit cards, earn large welcome bonuses by meeting spend-based requirements, cancel the cards and then repeat the process with the same cards soon after. However, this is no longer possible.

Now, credit card churning involves getting multiple new cards at the same time and then repeating the process once, twice or even more times each year, albeit with different cards. When done right, one can churn credit cards and earn sizable reward points/miles/cash back within a short time. But while this practice might be rewarding, it comes with risks.

Some churners, often referred to as travel or card hackers, rely on different strategies to make the most of credit card churning, and they follow a more aggressive approach than conventional churners. A few of them open 10 or more cards at the same time, only to close them or stop using them after earning sign-up bonuses.

Churning credit cards for miles, points or cash back is not illegal. However, card issuers now have guidelines in place to minimize instances of this controversial practice.

How to Do Credit Card Churning the Right Way

Anyone who wants to learn how to churn credit cards should start by understanding that approaching the process with caution is crucial. The potential downsides can override the potential rewards.

  1. 1

    Set a goal

    Determine what types of rewards you want to earn, be it miles, points or cash back. Start with no more than two to three cards as long as you know you won’t have to overspend to meet their spend-based welcome offer requirements. Once you feel comfortable with the process, you may consider adding more credit cards to your list.

  2. 2

    Compare welcome offers

    Take a look at the top rewards and travel credit cards and narrow down on ones with welcome offers that align with your goal. Compare the cards on your list across other parameters too. For instance, frequent flyers might benefit by getting cards that offer airline/airport perks and travel insurance coverage. Bear in mind that welcome offers are often available for limited time periods, so you might need to act quickly or wait for some time, as the situation demands.

  3. 3

    Limit the number of applications

    If you wish to get multiple new credit cards to churn, it’s best that you wait for at least six months between applications. That way, you can minimize the negative effect that applying for new credit has on your credit score.

  4. 4

    Pay attention to fees

    There are several no-fee options if you do not wish to pay annual fees. Alternatively, you can get a credit card that waives the annual fee for the first year and close it before it's time to pay the annual fee for the following year. With cards that have annual fees, one option is to contact the card's issuer and request a product change to a no-annual-fee card. And if you plan to use your new cards outside of the U.S., look for ones that do away with foreign transaction fees.

  5. 5

    Set reminders

    If you wish to succeed at credit card churning, it's important to pay attention to timelines and deadlines. To make sure you stay on track, you may want to consider setting reminders to help you meet a welcome offer's spend-based requirement by the deadline and remember when a card's annual fee will be due again.

  6. 6

    Pay balances in full on time

    Churning credit cards is best suited for people who pay off their balances each month since the interest charges tend to outweigh the value of the rewards you earn. It's also equally important that you make all your payments on time to avoid late fees and a drop in your credit score.

  7. 7

    Maintain a record

    It’s best to keep track of all your credit card churning activity. The record you maintain should include the names of all your credit cards, annual fees, dates when annual fees are due, the welcome bonus, spend-based requirements and your progress in meeting spend-based requirements.

  8. 8

    Keep an eye on your credit score

    You get free access to your credit reports from the country’s top three credit bureaus as well as a few other sources. Go through them regularly to check if your credit card churning is affecting your credit score negatively. If so, consider putting your plan on hold until you get your credit score back on track.

  9. 9

    Repeat the process

    Once you’ve earned a welcome bonus, consider if you wish to close the account or keep it active. In any case, you may then begin your search for the next credit card to churn. Since applying for a new credit card brings down your credit score slightly, it's best to wait a few months before your next application.

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When looking for churnable credit cards, pay attention to bonus reward categories that align with your spending. These may come in the form of gas, groceries, dining out and travel. MoneyGeek has analyzed more than 2,000 consumer and business credit cards combined so that you can find the right ones with ease.

Is Credit Card Churning Worth It?

Credit card churners may make the most of the process if they play their cards right. However, it requires some planning, and you'll need to manage your finances and cards correctly. Depending on the rewards you stand to earn, churning credit cards might be worth the time and effort you put into the process.

Pros and Cons of Credit Card Churning

The benefits of credit card churning extend beyond earning welcome bonuses. However, you also need to understand the potential risks.

Key Takeaways

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Pros
  • Getting to earn sizable welcome bonuses.
  • Ability to capitalize on regular spending.
  • Additional card-specific perks, such as free nights and flight upgrades.
  • Possibly not having to pay annual fees.
  • New cards may improve your credit utilization ratio.
  • Paying your balances in full each month works well for your credit score.
  • Canceling credit cards is simple.
  • Credit card churning is legal.
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Cons
  • Credit card churning takes time and effort.
  • Each new credit card application brings your credit score down by a few points.
  • Closing credit cards can hurt your credit utilization ratio and bring down the average length of your credit accounts.
  • Your application for new credit cards might be declined because of multiple applications in the past.
  • You risk building debt if you’re not prudent with your finances.
  • You might need to pay annual fees.

When Churning May Not Be Worth It

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    Credit card churning might not be worth it in several circumstances.

    • You’ve just begun using credit cards.
    • You’re having trouble repaying existing debt.
    • You plan to maintain revolving balances in your account.
    • You have poor creditworthiness.
    • You plan to apply for a mortgage in the near future.
    • You don’t spend much money.
    • You can’t be bothered to keep track of rewards and spending requirements.

When Churning May Be Worth It

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    You might be the right candidate for churning credit cards if you plan and manage your finances well.

    • You have a good credit score.
    • You pay off your balances in full each month.
    • You spend a tidy sum every month.
    • You have the desire to make the most of the process.

How Does Churning Cards Affect Credit Card Companies?

Given the rise in the popularity of credit card churning, most card issuers now have unwritten policies in place to discourage the practice. Some card issuers are known to revoke bonuses if cardholders close their account within the first 12 months. Some do not let you meet spend-based requirements through the purchase of gift cards, prepaid cards or traveler’s checks.

Another method that credit card providers employ to minimize churning is increasing spend-based requirements for earning welcome bonuses. While card issuers realize that welcome offers are important in attracting new customers, they want to ensure that you stick around and become a profitable card user so they can make money.

Specific Rules Set By Banks to Curb Credit Card Churning Practices

Card Issuer
Credit Card Issuer Rules

American Express

American Express follows a 5/90 rule that allows you to apply for just
one new card within a five-day period and for two new cards within a
90-day period. In addition, its once-per-lifetime rule implies that you
may earn a welcome bonus through any particular Amex card
only once, even if you cancel it and apply for it again at a later stage.

Chase

Chase follows a 5/24 rule. This ensures that you cannot get a new Chase
credit card if you’ve been approved for five or more credit cards from any
issuers in the 24 months preceding your application.

Citi

A 48-month rule governs most Citi cards. As per this rule, if you close an
existing card, you will not qualify to earn a bonus by applying for the same
card for at least 48 months from the date of your first card’s application.
With some cards, the period reduces to 24 months. In addition, Citi lets
you apply for just one card in an eight-day window and for two cards in
65 days. With business cards, it changes to no more than one application
every 95 days.

Bank of America

Bank of America follows a 2/3/4 rule. This implies that you may get
approved for no more than two cards in two months, three cards in 12
months and four cards in 24 months. In some cases, you might not
qualify to earn a welcome bonus if you’ve already received one in the
preceding 24 months.

Capital One

Capital One lets you apply for a new consumer or business card only
once every six months.

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While it may seem appealing to open and close cards just to receive the bonus, many cards offer benefits that make them keepers for the long run. Even if they have annual fees, benefits like airport lounge access, automatic elite status, complimentary checked bags, and free hotel nights make them worthwhile to hold for many years. — Lee Huffman, credit card expert at BaldThoughts.com

Other Questions You May Have About Credit Card Churning

Is credit card churning illegal?

Does churning credit cards affect credit score?

Can you churn Chase cards?

How much can you make churning?

For churning, what do you spend your credit card on?

What credit card should you get for churning?

Next Steps

Now that you know what credit card churning is and how it works, determine if you might benefit from becoming a credit card churner. If so, look for options based on the size of welcome bonuses and their corresponding spend-based requirements, as well as aspects such as annual fees, reward rates and added perks.

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About Doug Milnes, CFA

Doug Milnes, CFA headshot

Doug Milnes is a CFA charter holder with over 10 years of experience in corporate finance and the Head of Credit Cards at MoneyGeek. Formerly, he performed valuations for Duff and Phelps and financial planning and analysis for various companies. His analysis has been cited by U.S. News and World Report, The Hill, the Los Angeles Times, The New York Times and many other outlets.

Milnes holds a master’s degree in data science from Northwestern University. He geeks out on helping people feel on top of their credit card use, from managing debt to optimizing rewards.

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*Rates, fees or bonuses may vary or include specific stipulations. The content on this page is accurate as of the posting/last updated date; however, some of the offers mentioned may have expired. We recommend visiting the card issuer’s website for the most up-to-date information available.
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