My husband and I have churned credit cards for years. Until recently, I didn't even realize there was a name for what we did. Although some people don't recommend churning this is why I love churning credit cards.
Credit card churning is opening up a new credit card to get some freebies and not just some little nickel and dime freebies. You can get some pretty good stuff for opening up a new credit card. There are a few things I recommend before you sign up.
Make Sure You Can Pay it Off
If you have credit card debt or have had problems with credit card debt in the past I don't recommend it. However if you have always been great about paying off your whole balance when you get it then this might work for you. My husband and I each had a couple hundred dollars in credit card debt when we got married, but quickly paid it off. Since then we have never carried a balance, so opening up a new line of credit doesn't scare me.
Make Sure Your Credit is Good
Every time you open a new credit card it affects your credit. If you have a low credit score or are going to make a purchase for a house or a car you may not want this on your credit history. If you are in the excellent range of credit your probably not too concerned with a couple of point drop.
Is It Worth It?
I don't open a new credit card for $100. In fact, it usually needs to be around $500 or more of a reward for me to consider it. My time is always worth something, and for $100 or $200 it just isn't worth it. Make sure that it is important enough of a reward to take all of your time.
Can You Use It?
Sure you might get two free tickets to sunny Florida, but if you can't afford the hotel while you are there then it doesn't do you much good. Airline miles is a big one that credit card companies like to give out. If you were already planning a vacation and this just makes it more affordable, then it's great. We have opened credit cards three times for free miles, but each of the times we already had our vacation planned. It just made the vacation cheaper.
Jump Through the Hoops Quickly
Before we open up the credit card we always plan what we are putting on the card. Usually we need to spend anywhere from $1000-$2000 dollars. I don't recommend doing this in small purchases. You may be more likely to throw in an extra bag of chips at the store or make an impulse buy if you are trying to reach a spending goal. I like to do one quick purchase and then be done with the card. For example, recently my dog needed surgery. We had the money put aside to pay for the surgery when we got a great credit card offer. Spend $1000 and get $500 credit to use at Staples. We paid for the surgery with the card and then canceled the card. We had enough in Staples credit to buy an iPad that my son needed for school.
Cancel The Credit Card ASAP
I don't recommend keeping the credit card open. Once you have earned your rewards cancel it. Not only do you risk using it on things you shouldn't, but you won't get anymore offers from this company while you have the card.
So, is it really worth it to get these freebie offers? To us, yes. We haven't had a problem yet doing this. We aren't crazy with it. I would guess we open maybe one or two a year and I throw out two to three offers almost every day. I love all the freebies that I can get from churning the credit cards.
How about you? Have you churned credit cards?
Elroy says
Applying for credit cards is just a small part of the pie. We applied to one card last year and "Earned" around 400,000 on top of our 100,000 credit card bonus. You just need to work the system a bit better 😉
This is a small nit, but one of my pet peeves if bloggers calling it "churning" credit cards. Churning, which has very few opportunities today, was what was done 5-10 years ago. You'd call up citi, apply for the AAdvantage card, meet the spend, get 50k points, cancel, wash, rinse repeat. You could get 100's of thousands of points just from that one card alone.
Julie says
Interesting! I didn't even know what we did had a name until about 6 months ago. I read a couple of negative blog articles on it and thought I would write one on the positive side.
Kristen @ Joyfully Thriving says
I've haven't...but have thought about it. My brother does! I take that back. I did complete the SW offer for two free round trip tickets a couple years back. It was a great deal for us, and flew us to Seattle and back for a getaway with friends - for under $100! I agree that it should be $500 or more to make it worth my time. I'll have to keep my eyes open on this one.
Christie says
Wow, where are you finding $500+ offers?? Our best one was 12 days of Marriot points, but when we responded to the same offer (after cancelling the card) a year later they wouldn't let us, even using my hub's/(different) social instead of my own. I can't think of any good swag I've been offered lately, it's all 0% baloney. We pay off monthly and get a chunk back from AmEx but that's it. So where are you guys finding these good deals?
Julie says
We get a lot in the mail, probably 5-10 a week. I haven't ever used it but I heard reddit has a list of deals. Amex and Chase are the big ones that we get.
Lynsey says
It's actually good to leave a credit card open and have what you owe stay at under 20%. Every time you make a payment on it, it helps your credit.
Lydia @ Thrifty Frugal Mom says
I never knew there was a name for this either! We have done this for the last 8 years and I estimate we earn at least 1,000 a year this way. I know many people discourage it, but like you, we always pay our bill in full and have only had good success with it.
The two differences with us are that we do go for offers less than $100 at times. We simply use it to buy all of our regular purchases until we hit the minimum required in spending. Even if I spend 3 hours (which I never have) applying for the card and then redeeming points etc., I'm still making $33/hr. Also, we don't always cancel the card right away. It kind of varies on the situation, but we've learned that Citi especially will often offer us a great incentive if we leave it open and then have no activity for a couple of months. It's their way of trying to buy us back so to speak.
Thanks for the fun read! I've been thinking of writing about our experience too, but was a little scared that I'd get bombarded with nasty comments. 🙂 But you helped me feel a little braver! Lol!
Julie says
Thanks for the tips! You should definitely write about your experiences. I know everyone has a different point of view, but it's always neat to read about them. Thanks for stopping by!
Holly says
Hey there! I've been considering opening a new card to pay for my flight cross country for the holidays, but I've been having trouble finding good offers. I just found your blog post and my jaw dropped. This is such a great idea. My problem is that I don't get those credit card offers in the mail. Did you put your name down somewhere for them? I know I used to get them, and I have over 750 credit score, so I can't imagine why I wouldn't now unless I somehow opted out before, but I can't think of how to opt back in. Ideas? Or do you think these $500+ offers you're getting are the same as I could find on the net?
Thanks for your help!
Julie says
Hi Holly! I just get them in the mail so I can't offer a lot of advice. However, I have heard people say that they use Reddit to find the deals. I also know that Holly at Club Thrifty is amazing at finding deals. She has lots of posts on finding the deals. You can see some of the information she has in the link below. I hope that helps.
http://clubthrifty.com/best-credit-card-rewards-offers/