Millions of people carry credit cards in their wallets, but some savvy consumers have discovered a way to turn those plastic rectangles into money-making machines. This practice, called credit card churning, involves opening multiple credit cards specifically to earn welcome bonuses like points, miles, or cash back.
The strategy works by meeting minimum spending requirements within a set timeframe to access these bonuses. Churners might buy gift cards or use the cards for regular purchases to hit these targets quickly. Once they collect their rewards, many cancel the cards before annual fees kick in, then move on to the next opportunity.
When done successfully, churning can yield thousands of dollars in bonuses over short periods. Travel enthusiasts especially love this approach since they can rack up airline miles and hotel points that would normally take years to accumulate. Some churners score free flights to exotic destinations or luxury hotel stays that would otherwise cost a fortune.
However, credit card companies have caught on to this game and fight back with various restrictions. Chase implements a 5/24 rule, blocking new card approvals if someone has opened five or more cards in 24 months. American Express typically allows welcome bonuses only once per lifetime or enforces waiting periods before customers can earn bonuses again.
Credit card companies now deploy sophisticated rules like Chase’s 5/24 policy to combat churning and protect their bottom lines.
The risks are real and serious. Opening multiple cards creates numerous hard inquiries on credit reports, which can damage credit scores. Closing accounts frequently reduces the average age of credit accounts, another factor that hurts scores. Missing payments or carrying high balances while chasing bonuses can create dangerous debt situations. Additionally, responsible cardholders with stellar credit typically find more success with churning than those with poor credit histories.
Credit card companies may also ban habitual churners permanently or claw back rewards if they suspect abuse. While churning is not illegal, it often violates card agreements and can trigger account closures. Many churners also find the process extremely time-consuming as they must carefully track multiple accounts, spending requirements, and payment dates.
The practice exists in a gray area ethically since it exploits marketing tactics designed for long-term customers. For those considering this path, the potential rewards come with genuine financial and credit risks that require careful consideration and disciplined money management.
