For those of you who are new to the world ofcredit card rewards, or those of you that simply want to utilize them as wellas you can, we have just the guide for you.

Credit card churning is something you can use to your advantage if you do it correctly. If done poorly and without the proper preparation, you could be looking at a fairly damaged credit score and more debt than you bargained for.

First, let’s talk about what credit card churning is, and then we will share our top 7 tips you should follow if you are going to partake in it.

What Is Credit Card Churning?

So, what is credit card churning?

This idea refers to the practice of opening and closing a credit card repeatedly to continually earn its signup bonus over and over again. You can do this with several credit cards at once, which will allow you to rack up way more rewards than if you just stick to one card. On top of that, you can use strategies like combining loyalty program rewards to maximize what you earn from all the different cards.

People try this because a lot of credit card issuers offer them fantastic bonuses to sign up with their card. New cardholders may also earn a huge bonus for spending a specific amount in a short amount of time – typically it will be the first 90 days you have the card open. The more credit cards with rewards that you open up, the more potential signup bonuses you can earn.

How to Utilize Credit Card Churning

Now that you have learned what credit card churning is, let’s talk about how you can use it to your advantage. Like we said before, this is something you will want to do carefully to avoid negative
consequences. These are our 7 top tips for utilizing credit card churning.


1. Make Your Payments on Time

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The best tip we have for credit card churning (and for simply owning and using a credit card in general) is to always make sure that your payments are made by their due date.

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If your payment is late, it can, of course, lead to late fees and even damage to your credit score. Also, you could have a difficult time getting approved for rewards in credit cards in future situations if your credit is dinged due to late payments.

Lastly, not paying on time consistently could also mean you have to forfeit your rewards for the credit cards, which ruins the whole idea of credit card churning.

2. Don’t Forget About Annual Fees

While not all credit cards have an annual fee, plenty of them do, and it’s definitely something you want to look out for. However, a lot of rewards credit cards will waive that fee in the first year of you
having it. Other types of cards and card issuers may offer you benefits and incentives to make it worth keeping the card even with the annual fee.

Keep in mind that you do need to use the credit card every once in a while in order to keep it active and that spending should be balanced with the spending on other credit cards where you are trying to earn a bonus.


3. Stay Organized

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This next tip is especially important if you have several rewards credit cards open at once. Keeping all the information about each card organized is vitally essential to ensure you don’t lose track of any
important information.

For each card that you open, you will need to keep track of this specific information:

  • the date that you opened the credit card
  • whether or not each card has an annual fee
  • both the credit card payment date and the date of the annual fee
  • the spending requirement for rewards
  • the rewards and bonuses offered
  • the date you need to meet the spending requirement by
  • whether or not you have received the bonus yet for each card
  • whether or not you have used the card bonus
  • all current credit card balances
  • whether you have met the spending requirement/how close you are to meeting it

While this does seem like a lot of information to keep track of, you will be extremely happy that you did.

Maybe keep a few outlines with all of these questions on them for when you open up a new credit card, this will make it easier to ensure you always do it. If you are credit card churning with more
than one card, this will be a game changer.

4. Avoid Balance Transfers and Cash Advances

While balance transfers and cash advances can be tempting at times, especially when money is a little tight, it is absolutely not worth doing. These types of transactions don’t actually count as purchases and will not help you reach your spending minimums.

All that credit advances and balance transfers really do is occupy a part of your credit limit and stop you from being able to spend the full amount available. Both of these transactions will also cost you
extra fees, which does take away some of the benefits that credit card churning can offer you in the first place.

Lastly, cash advances do not receive any sort of grace period for finance charges, and you will start accruing interest on them right away.


5. Have a Plan for Your Collected Points

If you get really serious about credit card churning, you should have a good idea of what you want to do with the plethora of rewards you are collecting. This gives you something to work towards and lets you save up for something big.

There are so, so many ways you can use your credit card rewards, especially if you save them up for an extended period of time. This will also help you choose the best card options for the rewards you
want to take advantage of.

6. Pay Your Credit Card Balance in Full Every Month

One thing you should consider with any sort of credit card experience is making sure that you are not spending more money than you can afford to repay. This is even true if you are trying to reach a certain amount spent in a certain number of days or trying to receive certain other rewards. Either way, you will still have to pay the money back (and pay interest on it) at some point.

If you can’t afford to pay off the full balance of the credit card at the end of each month, credit card churning may not be the best option for you. Also, if you are struggling with just one card and its balance, you definitely shouldn’t throw more into the mix. While you will still earn rewards for it, they won’t be worth it because of the payments and interest you will have to deal with.

Credit card debt can be daunting and extremely hard to pay off, especially when you have more than one of them.

Interest is something else to be considered. If you aren’t paying off your full balance by the due date every single month, you are going to have interest payments. With high balances, these can get
extremely pricey and make the rewards even less worth it.


7. Keep Up to Date on Offers

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Reward credit cards are forever changing, and this goes for the credit card issuers as well. You should never assume that the offer you see on the company’s website is the best one that they have.

If you find a credit card that you are interested in, make sure you shop around on a few different websites first (especially ones that do credit card comparisons) to see what is offered everywhere.

Our Final Thoughts on Credit Card Churning

Now that you have seen our favorite tips for credit card churning, you should be all set to start partaking in it yourself. Just remember to be mindful of what you are signing up for, and of course, how much you are spending each month. Remember that the rewards will be much more enjoyable if you aren’t paying for exorbitant fees and interest rates every single month.

What are you most excited about when it comes to credit card churning? What are your biggest concerns?