Credit Card Churning: A Smart Way to Earn Bonuses — or a Risky Game?
Want to fly for free or earn hundreds in cashback just by using a credit card? That’s the idea behind credit card churning, a strategy where savvy spenders open new credit cards just for the signup bonuses — then move on to the next one.
Sounds great, right?
If done carelessly, credit card churning can backfire — with a ding to your credit score and surprise fees. Banks may even ban you from future perks. Here’s how to churn responsibly and decide if it’s the right move for your money goals.
What Is Credit Card Churning?
Credit card churning is the practice of repeatedly opening new credit cards to earn signup bonuses — often in the form of cashback, points or airline miles — and then closing or downgrading the card after the bonus is earned.
These bonuses can be lucrative. Think $200 cashback for spending $500 in three months, 60,000 airline miles for spending $4,000 in 90 days or free hotel stays after your first purchase.
It’s not illegal and it’s not credit card fraud. But it is a high-maintenance practice that requires organization and financial discipline.
How Does Credit Card Churning Work?
Here’s a typical playbook:
- Research Signup Offers: Look for cards with generous bonuses and manageable spending requirements.
- Apply Strategically: Don’t apply for too many at once — spacing them out helps avoid credit score damage and raises approval odds.
- Meet the Minimum Spend: You usually need to spend a set amount (like $3,000 in three months) to qualify for the bonus.
- Redeem Rewards: Use points for travel, cashback or gift cards.
- Close or Downgrade the Card: Cancel the card if you don’t want to pay the annual fee again — or downgrade to a no-fee version.
How to Churn Credit Cards Responsibly
To make the most of churning — and avoid regret — follow these smart strategies:
Stay Organized
Churning multiple credit cards means juggling various deadlines, minimum spend requirements and annual fees. If you’re not organized, it’s easy to miss a payment or lose out on a bonus. To avoid that, keep a log of every card you open: Note the application date, bonus offer, minimum spend amount, deadline to meet the spend and annual fee due date. Tools like AwardWallet, Travel Freely and MaxRewards can help automate some of this and even send reminders so nothing slips through the cracks.
Time Your Spending
Signup bonuses often require you to spend a few thousand dollars in a short window — typically three months. To hit that without racking up unnecessary debt, plan to apply when you already expect larger purchases. That might be during holiday shopping, home repairs or even paying taxes (yes, with a small processing fee, you can use a credit card). Smart timing ensures you meet bonus requirements without overspending or busting your budget.
Know the Rules
Every credit card issuer has anti-churning policies. For example, Chase’s 5/24 unpublished rule means if you’ve opened five or more cards (from any issuer) in the past 24 months, you’ll be automatically denied for most new Chase cards. American Express limits welcome bonuses to once per lifetime for each card, so think carefully before applying. Knowing the rules helps you make strategic decisions — and avoid burning bridges with banks.
Avoid Interest
No reward is worth paying double-digit interest. Carrying a balance defeats the purpose of credit card churning. Interest charges will eat up any cashback or travel perks you earn. That’s why it’s crucial to pay your full balance each month — ideally before the statement even posts. If you’re not confident in your ability to do that, it’s better to pause your churning strategy until your finances are more stable.
Always pay your balance in full — rewards aren’t worth 20% interest!
How Credit Card Churning Affects Your Credit Score
Yes, credit card churning can affect your credit score. Here’s how:
Hard Inquiries
Every time you apply for a credit card, the issuer pulls your credit report — which results in a hard inquiry. That can lower your score by a few points temporarily. If you apply for several cards in a short time, the cumulative impact can add up, making you look riskier to lenders.
Average Age of Accounts
Part of your credit score is based on how long your accounts have been open. When you constantly open and close cards, it reduces your average account age, which can have a moderate long-term effect on your creditworthiness.
Utilization Ratio
This measures how much of your available credit you’re using. Opening new cards increases your total credit limit, which can help your utilization ratio — as long as you don’t increase your spending. For example, if you have $10,000 in available credit and only spend $1,000 monthly, your utilization is 10%, which is considered excellent.
Track Your Credit
Monitoring your score helps you spot problems early. You can get your credit report via AnnualCreditReport.com free every week. Tools like Credit Karma and Credit Sesame show how applications affect your score and often break down exactly which factors are helping or hurting you.
How Credit Card Issuers View Churning
Banks aren’t exactly fans of churning. If they spot suspicious patterns, they may:
Deny Your Applications
Banks don’t want to give out rewards to people who don’t become long-term customers. If you apply for too many cards in a short timeframe, you may get automatically rejected — even with a high credit score.
Enforce Restrictions or Blacklist You
Major issuers have implemented policies to limit churners:
- Chase 5/24 Rule: Applied for more than five cards in 24 months? You’re likely out of luck.
- Amex RAT (Rewards Abuse Team): They monitor for suspicious behavior and can withhold points.
- Capital One: Limits users to two personal cards at a time and is known to be picky with approvals.
Close Your Account or Claw Back Rewards
If issuers suspect you’re gaming the system, they may not just deny bonuses — they can claw back rewards, close your account or ban you from future applications. It’s rare, but it happens — especially if you return purchases or don’t use the card after the bonus is awarded.
Bottom line: Be subtle and space out your applications.
Downsides and Risks of Credit Card Churning
While you can earn some serious rewards from credit card churning, there are some risks.
Annual Fees Add Up
Some cards with the biggest bonuses also come with hefty annual fees — sometimes $95, $250 or even $550. If you forget to cancel or downgrade before the second year, you might get hit with a fee for a card you’re no longer using.
Complex Tracking Requirements
Managing a dozen cards (or even a few) requires constant attention. You need to track when to pay, when to cancel and how much more you need to spend to meet a minimum. Without a system, it’s easy to miss a deadline — and with that, lose your bonus or get charged interest or fees.
Credit Score Damage
If you apply too frequently or close old cards, your score can take a hit. This could hurt your chances of getting a mortgage, auto loan or even a job (some employers check credit reports).
Wasted or Expired Rewards
Some rewards expire after a set period — especially airline miles and hotel points. If you don’t use them in time or aren’t flexible with travel, you might not get full value. Worse, if the airline devalues its points, what was once worth a round-trip ticket might only cover a carry-on bag.
Is Credit Card Churning Worth It? Final Thoughts
Churning can be a powerful tool for earning travel and cashback rewards, but it’s not for everyone. Here are some final tips to help you decide if credit card churning is right for you.
Ask Yourself: Does it Make Sense for You?
If you’re organized, debt-free and have a credit score in the 700s or higher, churning could be a fun way to fund vacations or earn extra cash. You can earn thousands of dollars in value over time — just by using your cards smartly and paying them off.
Avoid it If…
If you’re carrying credit card debt, have trouble budgeting or find it hard to keep up with bills, churning can be risky. It could tempt you to overspend or accidentally miss payments, both of which will cost you more than any bonus is worth.
Start Slow
You don’t need to apply for five cards at once. Begin with one or two cards that offer high signup bonuses with no or low annual fees. Once you’ve mastered tracking and payments, you can consider adding more.
Build Knowledge Over Time
Churning is a long game. As you learn the rules of different issuers, understand point transfer systems and track your own spending patterns, you’ll become more strategic — and more successful.
