Credit Card Churn: How I Made $6,000 in a Year

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What is Credit Card Churning?

The practice of churning is to sign up for new credit cards to get the promotion points or miles. You move onto another as soon as possible to earn points, and then close it immediately or before the annual fee is charged. Every time you apply for or close a credit card, you will take a 10-20 point credit score hit that will bounce back in a month.

Key Considerations

1. Have Enough Expenses to Meet the Minimum Spend

You will need to spend several thousand dollars in just a few months to meet the spending requirements. If your expenditures are not high enough to meet the minimum spending requirements, you WILL NOT get the sign-up bonuses. Afterwards, you will typically need to wait another two years (depending on the credit card) to obtain another sign-up bonus for the same card.

Pro Tip

Move your monthly expenditures forward to meet the minimum spend. If you have monthly gym membership, cell-phone, or insurance payments, inquire about an annual subscription or paying a lump sum for several months up front. You may even get preferred pricing and a discount for doing this.

2. Are You Preparing for a Major Loan?

You may not want to churn credit cards if you are preparing for a mortgage, car, or another major loan within the next year. The number of credit inquiries can affect temporarily affect your credit score and make it harder to get approved for new accounts.

3. You Gotta Keep Track of Your Points

The MOST DIFFICULT PART about credit card churning is keeping track of all the cards and points. People usually keep a spreadsheet of which cards are open, how much spending needs to be done, and when the spending period is up. Many cards have annual fees, so you may want to record the card open date as well to avoid the annual fee.

I prefer to use Award Wallet to keep track of all my airline and hotel points. There are several options, but Award Wallet has compatibility with the most number of reward programs.

Use Award Wallet to keep track of all your flight and hotel rewards account information and points.

Pro Tip

I personally use a website called Award Wallet. There are a few other websites that keep track of your miles and points, but Award Wallet has compatibility with the most number of reward programs.

4. Go Use Your Whole Household

For each credit card, you are typically only eligible for sign up bonus promotions once every TWO years. However, in my household, there are three adults, including myself. For a typical credit card, like the Citi® AAdvantage® Platinum Select® card, we can take advantage of the bonus three times, one for EACH household member.

5. And Yes, You Can Apply for Business Cards as Well

Business cards are not the same as regular personal cards for the purposes of accumulating sign up bonuses! If you applied and received bonuses for the Citi® AAdvantage® Platinum Select® personal card, you can apply for the business one and receive the sign-up bonus for the business card as well.

Pro Tip

You DO NOT need to have a small business to obtain a business card. Just simply use your social security number in place of the Tax EIN (employer identification number) number.

6. Get The Chase Cards First!

Chase will not approve applications for customers who’ve opened more than 5 new credit cards within the past 24 months. Therefore, for your first five credits cards, you should apply for the Chase ones first.

7. Will this Hurt Your Credit Score?

Only in the short term. When you open up a new credit card, you take a hit to your credit score of about 20-25 points, which will bounce back in one or two months.

Hello and Welcome!

My name is William. I am a private equity investor and the owner of Million Dollar Tips. Over the last 5 years, I have been committed to growing both as a person, and as a professional.

Look at where you want to be in five years, and commit yourself getting there today! Want to learn a new language or earn a million dollars? We’re a community dedicated to help you getting there.

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Editorial Note: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or any other company, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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