Credit Card Churning: Maximizing Sign-Up Bonuses

What if you could earn $5,000+ per year in travel or cash back just by strategically opening credit cards? That's the promise of credit card churning.

What Is Churning?

Credit card churning is the practice of:

1. Opening new credit cards to earn sign-up bonuses
2. Meeting minimum spending requirements
3. Keeping cards open or closing them strategically
4. Repeating with new cards

The name comes from "churning through" multiple cards.

Why Sign-Up Bonuses Are So Valuable

Credit card companies spend heavily to acquire new customers. A typical bonus:

Example: Chase Sapphire Preferred

• Sign-up bonus: 60,000 points
• Requirement: Spend $4,000 in first 3 months
• Value: ~$750-1,200 in travel

Compare to earning 2 points per dollar: You'd need to spend $30,000 to earn that same bonus through regular spending.

Is Churning Right for You?

Churning is NOT for everyone. You need:

The Basic Strategy

Step 1: Know Your Credit Status Check your credit score, recent inquiries, and which cards you currently have.

Step 2: Research Current Offers Sign-up bonuses change frequently. Key resources:

• The Points Guy
• Doctor of Credit
• Reddit's r/churning

Step 3: Plan Your Applications Space out applications to minimize credit score impact. Consider:

• 5/24 Rule: Chase won't approve you with 5+ new cards in 24 months
• One card per 3 months for beginners
• Different card issuers have different rules

Step 4: Meet Minimum Spend Naturally Never spend more than you would otherwise. Use cards for:

• Regular bills
• Groceries and gas
• Insurance premiums
• Planned purchases

Step 5: Manage Your Cards

• Set up autopay immediately
• Track annual fees and when to downgrade
• Keep oldest cards open for credit history

Understanding Card Issuer Rules

Chase 5/24 Rule Won't approve most cards if you've opened 5+ cards (any issuer) in past 24 months.

American Express Once-per-Lifetime Can only earn each card's bonus once ever.

Citi 24-Month Rule Can't get a bonus if you earned one on same card family in past 24 months.

Impact on Your Credit Score

Opening new cards affects your score in several ways:

Short-term negative:

• Hard inquiries (-5 to 10 points each, temporary)
• Lower average account age
• New accounts

Long-term positive:

• Lower credit utilization (more available credit)
• More accounts (thicker credit file)
• Diverse credit mix

Most responsible churners see scores recover within a few months.

The Annual Fee Question

Many premium cards have $95-$695 annual fees. Strategy:

Year 1: Worth it for sign-up bonus Year 2+: Evaluate if benefits exceed fee Options:

• Downgrade to no-fee version
• Call for retention offer
• Close if no value (but this affects credit)

Manufactured Spending (Advanced)

Some churners use techniques to meet spending requirements faster:

• Gift card purchases resold or liquidated
• Money order techniques
• Various creative methods

Common Mistakes

1. Overspending to hit minimums - Never buy things you don't need
2. Missing payment dates - One late payment destroys the value
3. Ignoring annual fees - Forgetting to downgrade costs money
4. Too many applications too fast - Hurts approval odds and score
5. Not tracking - Spreadsheet discipline is essential

Is It Worth the Effort?

Conservative churning (2-3 cards/year): $1,000-2,000 in annual value Moderate churning (4-6 cards/year): $3,000-5,000 in annual value Aggressive churning: $5,000-10,000+ (requires significant time/effort)

For most people, a moderate approach offers the best value-to-effort ratio.