By Jason Steele


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For Issue # 2 of the Credit Card Reviews Industry Roundup, Credit Card Expert Jason Steele asks the following question:

Do You Believe That the Benefits of Credit Card Churning Outweigh the Negatives?

Here are the responses from this week's industry experts which include Shawn Coomer, Andrew Schrage, Holly Johnson, Angelina Aucello, Andy Shuman, and Miranda Marquit:

Shawn Coomer - Founder and Managing Editor of Miles to Memories

The world of credit cards and credit card churning has changed quite a lot over the past few years. In the past it used to be possible to get a wide variety of sign-up bonuses on many products from the same bank. In some cases you could get a bonus on the same product over and over. One could almost describe it as the “Wild West” of the modern credit card bonus.

As the economy has improved and technology has progressed, banks have tightened their reigns on the practice of churning. Chase was the first major bank to crack down with the introduction of their “5/24 rule” and since Citi, Bank of America, American Express and others have introduced new more restrictive rules for handing out bonuses.

Given the current environment, there are some definite strategies churners need to incorporate. First, it is important to choose the products/bonuses that you most want. Unlike in the past where you could get every card you applied for, things aren’t quite so easy these days. You must also be conscious of how you use those products. Banks are looking at your value as a customer now more than ever.

To tackle the original question, I do think being a so called “churner” can be beneficial for consumers, however one has to be smart. For example, blindly applying for every card just to get the bonus is definitely not a winning strategy these days. Not only will it make you look like a bad customer to the banks, but you will have to deal with denials, scrutiny and frustration.

On the flip side, a consumer who plans their credit card applications carefully can have a huge upside. It is often possible to get the best bonuses available and to be a good customer to the bank. By seeking out the best deals, choosing your applications wisely and using the cards you apply for, there is still a huge opportunity to get tremendous value out of credit card sign-ups.

Andrew Schrage - CEO and Co-Owner of Money Crashers, a Personal Finance Website

Credit card churning is basically the process whereby you sign up for several different credit cards with the goal being to maximize the rewards program of each as much as possible, and then usually close the card before any fees are incurred. For those who can pull that strategy off effectively, it's a great way to earn what is essentially free money or perks, but it is controversial.

You can benefit from the sign up bonuses, get some great cash back on purchases, and even qualify for what amounts to free travel. But there are a few negatives. First, opening up too much credit usually doesn't help your credit score, although the dings to your score are often temporary. Second, closing credit cards also hurts your score because it decreases your overall amount of available credit, but that too is often temporary. Plus, if you find yourself juggling a bunch of different credit cards along with different due dates, it can be easy to miss a payment, which also will lower your score more long-term. Many argue that the benefits outweigh the negatives as long as you pay off all of your credit cards on time and keep track of what you owe.

If you go this route, you never want to carry a balance, especially on multiple cards. Second, opt only for credit cards which do not come with an annual fee, since that means you wouldn't necessarily have to close them to avoid any fees. With that said, many cards waive the annual fee the first year or have perks that help you offset those fees. Being able to keep accounts open longer is better for your credit history, and that's easier to do when there is not an annual fee to worry about. To conclude, you need to have great organizational skills and be disciplined enough to not overspend. If you don't fit this description, it might not be the best route to go with regards to your finances; you can seriously damage your credit score and history.

Andy Shuman - Andy Shuman is a travel and credit expert and an author of the Amazon bestselling Lazy Traveler's Handbook series. He writes for travel and personal finance websites and blogs at

I do believe that the benefits of credit card churning outweigh the negatives, but only because I’m a wide-eyed optimist. Credit card churning is certainly past its prime.

It is still a great way to amass a little fortune of miles and points or a smaller fortune of cash back, especially for newbies. However, the golden age of 2008-2015, where a churner with an excellent credit score was able to apply for a dozen credit cards and get them all, isn’t coming back any time soon. Still, every credit card issuer has different rules, which is why churning remains possible. Newbies who haven’t applied for a lot of credit cards are in an especially good place, but there are a few things everyone who wants to play this game must follow.

1) Learn the official and unofficial credit card rules.

2) Use a spreadsheet to keep your churning records.

3) Pay off your credit card bills religiously every month.

4) Stop within 12-18 months of applying for a mortgage.

The most pronounced risk of this game is to overestimate one’s ability to pay on time. 45% of Americans with debt spend up to 50% of their income to repay it. No amount of miles or points will help you to get out of that misery.

Other thoughts

Credit card churning is an interesting phenomenon because it resulted in some fundamental rules having been thrown out of the window. In the past, if you had a decent income and a great credit score coupled with a relatively thick credit file, you could get the best credit cards in the nation, no questions asked (almost). Nowadays, credit card companies will deny you in a New York minute if they suspect you’re only interested in the welcome bonus. Never mind that you have an 800+ FICO score; if your credit pattern violates one of their internal, unspoken rules, they’ll throw you to the curb.

There is one reason why banks have developed a distaste bordering on pure hatred for credit card churners. Churners are unprofitable. They always pay in full and never pay a cent in fees and interest. Banks used to have an internal designation for people like that until it was leaked to the public – they called them freeloaders.

But! Banks needed churners. After the crisis of 2008, when millions of Americans suddenly became ineligible for credit, banks welcomed churners with open arms and huge sign-up bonuses. Churners are not volatile people. They are utterly predictable; and they always pay on time. At the time of crisis, churners were like a rock.

That’s not a benefit to the banks anymore. Americans are spending in spades and making new debt like there is no tomorrow, and churners have overstayed their welcome; at least until the next economic downturn.

Holly Johnson - Financial Expert and Award-Winning Writer. Owner of Club Thrifty and Travel Blue Book

The benefits of credit card churning can absolutely outweigh the negatives if you have the discipline to use credit cards responsibly. Using credit cards for regular spending can easily help you earn thousands of dollars in free travel, cash-back, or other rewards every year, provided you pay your credit card in full every month and never pay interest on your purchases.

Individuals who are best for credit card churning have high credit scores already, along with a certain level of organization so they can keep their various purchases – and cards – straight. Having discipline with your spending also helps you get the most out of this hobby, particularly when it comes to avoiding the temptation to overspend to earn more rewards.

The biggest downside to churning credit cards is the potential hit you could take to your credit score by opening/closing new cards. However, this may not be a big deal for someone who has their financial ducks in a row and is debt-free already. Since the biggest determining factors of your FICO score are your payment history and amounts owed, any noticeable drop to a person’s credit score caused by churning is usually short-lived anyway.

With all this being said, certain personality types shouldn’t try credit card churning as the negatives will almost always outweigh any benefits and erase any rewards they earn. If you have credit card debt, have a penchant for overspending, or have trouble keeping track of your finances already, signing up for new credit cards to earn rewards is likely a bad idea.

Angelina Aucello - EWR-Based Travel Aficionado and Expert Who Owns Angelina Travels

I’ll be the first to say that credit cards are not for everyone; however, if you’re financially responsible, disciplined, and meticulously-organized, then yes, the benefits of credit card churning not only outweighs the negatives, but can also be a rather lucrative gateway to free travel and even some extra money in your pocket each year.

With the airline loyalty program industry rapidly-changing, earning miles by flying is no longer as easy as it once was, making credit card points now more valuable than ever.

As you may be aware, many airline loyalty programs have gone revenue-based over the last few years. Simply put, those who have high-level elite status and spend big bucks with an airline will earn more miles, and the leisure flyers who choose to fly based on finding the best price suffer the most. For example, last year, I only earned a measly 360 United miles on a New York - Fort Lauderdale flight that I booked during a fare sale.

Credit card churning seems to have a bad reputation outside of the miles and points community, and a lot has changed over the last few years. With the Chase 5/24 rule and AmEx “once in a lifetime bonus” rule in place, it’s not possible to open dozens of new accounts annually anymore. That’s fine, because there are plenty of credit cards I keep open for many years and gladly pay the annual fee for anyway, since the cardmember benefits outweigh the cost (such as a free annual hotel night, bonus points, travel protection, annual airline/travel credits, etc.).

A common misconception is that having many credit cards is damaging to your credit score. The reality is that it’s exactly the opposite, and many experts will agree. Not only can you earn lucrative amounts of miles and points by taking advantage of credit card sign-up bonuses, you are also improving your credit score in the process. With over 16 active credit cards in my wallet at the moment, my credit score is currently strong at 830 because I pay my bills in full and on time and never carry a balance.

The decision to earn miles and points through credit cards should be treated like a lifestyle until it becomes part of your everyday life -- when it comes to knowing which credit card to use for specific purchases, etc. If I had a mile for every person that told me credit cards are bad or that it wasn’t worth putting the time into properly churning credit cards, I’d be a million miler in the program of my choice. Of course I’m still waiting for that opportunity. For now, I’ll just keep searching for the next big-sign up bonus ;).

Miranda Marquit - Nationally-Recognized Financial Expert and Founder of Planting Money Seeds

The benefits of credit card churning only outweigh the negative if you are vigilant and you have a way to ensure that you won't end up carrying large balances month to month. In order to make credit card churning work, you need to have a goal in mind — and have a plan to maintain your good credit and avoid paying interest.

I’ve used credit card churning in the past to take free trips, but it’s not something that I do as often as some of my friends. Most of the time, I wait until I know I’ll make a large purchase, like a new TV, or if the holidays are coming up. That makes it easier to meet the minimum for the signing bonus using a planned purchase that I’ve already saved up for. I take the money I’ve already saved to pay off the purchase. A few months later, I’d cancel the card.

You do have to be careful, though. Some issuers have restrictions. For example, American Express won’t let you get another signup bonus for the same product once you’ve already used it. So, even though I got enough for my son and I to enjoy a free trip with my signing bonus, closing the account and hoping to do the same thing in a few months won’t work.

As long as you feel it’s worth your time, and you can qualify for the best deals, credit card churning can be a great tool to save you money — especially if you like to travel. However, if you don’t have a plan for keeping track of the terms and you’re spending just to spend without a plan to pay off the debt, it could backfire horribly.


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