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Guide to Credit Card Churning

Over the last few years I have written a number of posts on Credit Card Churning. Up until now though, I have not written much about how I manage my Credit Card Churning. Consider this my guide to Credit Card Churning.

What is Credit Card Churning

The concept of utilizing credit cards to make money is commonly referred to as churning.
If you recall from my very first post on this topic,  I utilize my existing spending to take advantage of signup bonuses. I essentially churn from card to card as my spending meets the signup bonus, thus maximizing the benefits of my existing credit card bonuses.

If you are looking for ways to manufacture spend, a more advanced form of churning, you won’t find it here. I do not do things like buy gift cards with credit cards to fake spending to meet bonuses. In addition if you recall from a few weeks ago, I don’t so much go for point maximization. So my tips won’t apply if you want to make point maximization your hobby du jour. But if you simply want to make some money on the side, you might benefit from my tips since our goals are aligned.

Your Credit Score Will Not Suffer Due to Strategic Limited Churning

Before we get started let’s clear the air. For those who fear their credit score dropping due to credit card churning, don’t. Your credit score is determined via a number of factors. The number of cards you hold and the number of inquiries made do count against the number. But a bigger factor tends to be your credit utilization. This is the amount of credit you use compared to how much credit you have. If done right credit card churning will lower your utilization number and thus, up to a certain point at least, increase your credit score.

Your mileage will vary obviously. However, in 4 years of churning between 5 and 6 cards a year my credit score still exceeds 800. How much can you make off 5-6 cards? Between bonuses and regular spend somewhere between $3500- $5000 in extra money a year. Not bad for something I spend about 30 minutes a month on. So let’s get started shall we?

What are your Credit Card Churning Goals?

The first thing you need to determine when starting credit card churning is what are your goals. Is your goal surrounding a specific trip, general travel, or even just plain cash back. From there you have an idea which cards to go after.

Targeting a Specific Trip with Credit Card Churning

For example If you have a defined trip with a specific carrier this can help you focus in on the right card. Say I want to fly somewhere. Then you should consider a card that provides frequent flyer points on a carrier heading to your destination. Southwest for example has a pair of great credit cards. If used correctly they can result in a free companion pass. Alaskan Airlines has similar deals. These works well for short term booking, but honestly can be a pain to match deals to your travel. I generally do not plan our travel that far ahead, instead often letting the deal (within reason) guide our destination. As such I do not tend to use frequent flyer cards, but I see the value.

Targeting General Travel with Credit Card Churning

The second option is to get a general travel card. Many cards from have their own associated travel agency. Some provide pretty good point redemption values for booking travel through these agencies. Cards from Chase and American Express tend to fall in to this category. The best redemption rates tend to be for travel booking through their systems or by converting to points of one of their travel partners. Be wary as not all of these systems provide competitive results. I have seen one interesting twist on this. Cards like the Barclays Arrival++ give a statement credit on travel rather than requiring you to book through their agency. That flexibility unlocks using your own discount travel agency while still getting the maximum credit. Not a bad deal.

Targeting Cash with Credit Card Churning

The third option is the cash back card. Some cards give good statement credits regardless of what you spend. They might even go so far as to send you a check. In my experience cash back cards, with a few exceptions, tend not to be the best deal in the industry, providing a lower dollar per bonus. The one exception to this seems to be gift cards. Many cards have decent deals on gift cards to major retailers.

Targeting a Mix of the Above Using Credit Card Churning

Finally there are the hybrid cards. These are the cards that can provide a bit of each of the first 3 options. The Generic American Express and Chase Ultimate Rewards cards are great examples here. In these cases though be aware not all redemptions are equal. Pay attention to the rate per redemption. In general about 1 penny per point seems to be the industry average. Some cards go lower, some higher. In general though if you shoot for 1 penny per point for your intended redemption you should make out ok.

Don’t Buy Merchandise from the Card Company Store and You’ll be Fine

A note here, I mentioned I don’t spend a lot of time maximizing my points usage. Here is where you could spend a lifetime squeezing out an extra fraction of a penny per point. If that is your thing go for it. If you are like me, however, then avoid the really stupid redemption rates like online merchandise and you should be fine. Many of the major card manufacturers make it super easy to determine point value for different redemption options. One more time just because I can’t stress it enough, Don’t Buy Merchandise with Points!

I personally tend to focus on general travel cards and hybrid cards. They provide the flexibility I need with the least amount of planning ahead. I also tend to use them to reimburse myself after booking rather than before, which makes their usage for gift cards and other daily expenditures valuable as well.

Can You Meet The Spend

Once you have chosen your type of card you need to be sure and pick one where you can actually meet the required spend. To receive the signup bonus almost all cards require you to complete a certain amount of spending on the card in a given amount of time. This time period is typically 3 months, starting from the day you are approved from the card. Note my wording here, it is approval not arrival of the card. So long as you meet the spending in the given period you get the bonus. Exceed the time frame to meet the bonus by even one day and you are most likely out of luck.

Most normal card spend counts towards these targets, but usually things like cash advances do not. They want you to actually spend the money. The concept of manufacturers spend, that I introduced earlier as something I do not do, is generally about finding loopholes in these policies before they are closed. People find areas like coins, stamps, gift cards, or something else that is easily converted back to money. They then use their cards to buy amounts up to the spend required. Then they sell these things back to recoup the money. Essentially they create fake expenditures to capture more bonuses than their existing expenditures allow. Banks eventually get wise to this behavior and shut things off rather suddenly. Sometimes they also ban people who frequently execute this behavior. That’s all I have to say about manufactured spend, so let’s continue on.

Annual Fee or Not

So you’ve picked your goal and probably found a variety of cards that fit your need. The second decision you need to make is to get a card with an annual fee or not? Depending on your choices most card companies have versions of the same card with and without annual fees. Starting out it makes sense to get cards without an annual fee. You get your feet wet and after you’ve gotten the bonus you just throw the card in your sock drawer. But the real money is in cards with annual fees. It’s not uncommon to see the signup benefits on a fee based card exceed $500 after paying off the first year annual fee. Some even waive that fee. Non-Fee cards meanwhile tend to net closer to $100-$200.

Determining When An Annual Fee Is Due

The important thing with a fee card is most, though not all, are only worth keeping for the first year. After the first years bonus the fee will typically exceed the value of the card. This means you need to get rid of the card at the time the next fee is placed. A lot of people fret about this step, but it really is quite simple. The month before the fee your card company is required to notify you of an impending fee. That is when you take action.

Miss the notification? In most cases still no sweat. Almost all the majors have a grace period where they will refund the entire amount of the annual fee. In most cases this is the statement period for the statement with the fee. So as long as you actually watch your charges and pay on time you should have no issues catching and addressing the fee.

Cancelling or Downgrading

Now that you know when your annual fee applies you call the issuer. The first thing you should do is ask if you can downgrade your card. Downgrading is better then closing because of that pesky FICO credit score number again. You see your credit score also considers your age of accounts. So if you can downgrade the card to a no fee version and leave it open ultimately it will make your average age of accounts older. This over time will raise your limits.

Not all issuers allow down grades. Some also might offer you a retention bonus that might make it worth your offer to keep the card. For all the rest a 5 minute phone conversation to cancel is all that is necessary. As noted up front, I estimate I spend 10 minutes a month or less on card churning. Most of that 10 minutes is spent looking at the latest signup bonus and deciding on my next card.

Limiting Hard Pulls

One final thing that impacts your credit score is the pull the credit card company uses to determine if they will provide you a card. This is called a hard pull. If you applied for enough cards a hard pull can lower your score. At 5 cards a year I do not play in this category. If you were closer to 10 or 15 a year you may want to pay attention. While all card companies do these hard pulls to determine if they will provide credit, there are ways to reduce the impact of these on your score or the ability to get an additional card. For example some issuers consolidate pulls, so if you apply for two cards at once they only check once. Others may not do an additional hard pull if you are an existing customer and had another one recently. Finally not all will do one to all bureaus or if you are denied for the card. I wanted to mention it here for completeness, but I suspect very few of my readers are this type of card user.

So that is all I have for today. I plan on following this up with a post later this week on some strategies around choosing specific cards. That post will focus on which specific cards to start with, what are the best deals currently, how to monitor for new deals, and how to best leverage that knowledge. So tune in on Wednesday for that.

Do you do credit card churning?


  1. fiberguyr1
    fiberguyr1 April 9, 2018

    I am just about to get my first card from American Airlines for the 50k miles and free baggage. 90% of my work travel is through AA, and the bonus of free bags and boarding group are definitely things I will use.

    • FullTimeFinance
      FullTimeFinance April 9, 2018

      The benefits of upgrades on work travel especially can be like gold. My work does United, I live and die by the free premium economy.

  2. Chris
    Chris April 9, 2018

    Just starting to get into this. Not sure I will do 5 per year, I started with a a new chase ultimate rewards to get 50,000 points. Curious what other cards you have personally decided on.

    • FullTimeFinance
      FullTimeFinance April 10, 2018

      Tomorrow’s post will get into specifics on what cards to get (I promise no affiliate links, just info).

      Currently I am utilizing the American Express Gold Business Card. Before that it was the Bank of America Premier Rewards Card. I believe next will be the Chase Ink Preferred as we dip below 5/24.

  3. churner
    churner June 14, 2018

    a very good tool that helps me churn is, they track all your credit cards and bank anti-churning rules. they automatically figure out which bank you can apply for a credit card next without getting rejected.

    • FullTimeFinance
      FullTimeFinance June 16, 2018

      I hadn’t heard of that one. I’ll have to check it out.

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