Personal Finance Rewards Credit Cards

Credit Card Churning 101: A Guide to Hacking Rewards Programs

Elizabeth Aldrich

America the beautiful, where we all have certain unalienable rights – like the right to life, liberty, and the pursuit of credit card debt.

Credit card companies are notorious for playing the vulture, preying on consumers while they fall into massive debt holes. But among the wreckage of repossessed homes, massive student loans, and debt collection agencies that have popped up in the last decade hides a group of people who have figured out how to game the system and take advantage of the credit card companies. They’ve been scoring freebies left and right, drinking Dom Perignon on a Miller High Life budget, so to speak, all without acquiring a single penny in debt. They call themselves credit card churners.

Their grand scheme? Apply for credit cards, gather bonuses and rewards, cancel credit cards, repeat. Survey the loot and milk it for all it’s worth.

So what exactly are these credit card rewards worth? Everything from first-class vacations and luxury ocean-view hotel rooms to paying off student loans, if you know how to play your cards right.

A Credit Card Churning Success Story

Emily and Duraius were your typical middle-class couple leading normal lives in Bloomington, Indiana, him a graduate student and her a Project Manager, until Duraius discovered a blog post one day on credit card churning. They had always wanted to travel. So, he dipped his toes in, netting some modest rewards by applying for credit cards. After quickly earning a free weekend trip to St. Louis, the two of them were hooked.

After a couple years of churning, Duraius graduated and Emily quit her job, and they went on a month-long luxury trip across Europe, flying coach, staying in high-end hotels, visiting ten different countries, all while spending next to nothing. After that, they went on an extravagant $32,000 honeymoon to Paris, only spending $2,000. Then they went on a second honeymoon to Bora Bora, again spending only $2,000 for a trip that should have cost them $30,000. And their credit scores? They actually increased over time.

So How Do They Do It?

Simply put, credit card churning is the act of signing up for multiple credit cards in a short time period in order to receive sign-on bonuses and rewards, canceling the cards after the rewards have been received or after the first year is over (many cards will charge an annual fee beginning on the second year), and then repeating the process a few months later with a new set of cards.

A typical plan will involve applying for 2-3 cards on the same day, ideally while the cards are running promotions that involve additional bonuses, waiting 90 days for your credit score to start recovering and applying for 2-3 more cards, and so on and so forth. Some people even go so far as to apply for a card, get the rewards, cancel the card, wait a few months, and then re-apply for that same card they just cancelled to double their rewards, although this is only possible with some cards.

Terms and rewards vary greatly across different credit cards, and a lot of work goes into figuring out the order in which to apply to various cards in order to maximize benefits according to your personal situation.

The Downside of Credit Card Churning


However, nothing in life is free, and this applies to credit card churning. Most credit cards have requirements for obtaining their rewards, typically in the form of a minimum spend. Some may require that you spend $500 in the first month, others $2,000 in the first 90 days. For more advanced churners, there are ways of getting around this, but it is risky.

And as with anything high in reward, there is plenty of risk. For every great success story, there are probably a handful crash and burn stories. While you can mitigate risk by doing your research, being financially responsible, staying organized, and making sure that credit card churning is right for you in the first place, you are still playing with fire when you go into temporary debt and meddle with your credit score.

Gretchen, the woman behind personal finance blog Retired by 40, writes about the disaster that was her first attempt at credit card churning. After opening up some credit cards, a handful of large and unforeseen expenses came up. Overwhelmed by insurance, medical, and tuition bills, she plopped them all onto one of her new credit cards and ended up over $4,000 in debt.

You never want to be paying interest on any of the credit cards you use, otherwise the cost is offsetting your rewards. And you want to make sure that you maintain a healthy credit score.

The truth is, credit card churning is not for everyone. Banks rely on a good portion of amateur churners to fall behind, rack up debt that they can’t pay off, and accrue significant amounts of interest so that credit card companies can turn a profit. It’s crucial that you do your research and give your personal finances an honest assessment before getting excited about the rewards and diving in head-first. A free flight is not worth a blow to your credit or a mountain of debt, so churn responsibly!

About the author

Elizabeth Aldrich

Elizabeth Aldrich

Elizabeth is a freelance writer and “digital nomad” specializing in small business, entrepreneurship, career advice, real estate, travel, arts, and culture. She’s written for outlets as varied as Rawckus Music and Arts Magazine, Itcher Entertainment, Sweden Tips, Houzz, Hometalk, JobHero, Tico Times, and Eugene Weekly. Thanks to a three-year stint in a travel job, a knack for mining great deals, and credit card churning, she has not paid for a single flight since 2012, despite her constant travels. You can find her on Twitter @LizzieAldrich or her website, www.elizabethaldrich.com.

1 Comment

  • What kind of credit score do you need to assure being able to replace your closed cards ?? !
    Also it seems the opening and c would hurt your credit score ?

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