Credit Card Churning: Definition, 3 Rules to Follow & is it Right for You?

By Sara


Last Updated: October 31, 2022


Most people have one to two, maybe max three credit cards that they use for daily use to buy groceries, gas, and dining out.

However, there is a small percentage of people who are gaming the system with credit card churning. If you’re interested in credit card churning, it’s important to know what it is and some considerations to know if it is right for you.



What is credit card churning?

Credit card churning is a simple concept, but with many considerations.

The main idea is that you open up credit cards to earn the sign up bonus. Typically, you don’t use that card after the bonus has been earned. Some people even close the accounts. 

Some people will apply to multiple cards at the same time for the sign up offer, while others get a card at a time until that bonus has been earned. 


The rules of proper credit card churning 

Credit card churners have to be organized to successfully churn five to ten cards a year.

If not done properly, it can mess up their finances, from over spending to their credit score. Most people who do this actually have a fairly high credit score because opening up a card mostly impacts the two lowest credit categories - credit history and new credit.

They keep a low utilization ratio and pay their cards off on time, which impacts your score more than anything else. 


Find the offer.

Many credit card churners will do a lot of research to find the right card offer for them.

They also know the rules for which cards they can apply to. Chase, American Express, and Citi all have rules to limit people churning their cards. Many credit card churners will start with those cards, then work through the other banks. 

Some people will only look for cash back cards, while others are open to travel cards. Many of these credit cards also offer a 0% interest for 15 months, but some credit card churners aren’t interested in this because they pay off their cards immediately. 


Know your spend.

Churning credit cards for the sign up bonus usually allows someone to get a certain amount off their purchase, saving them money.

It can be an issue when you churn a credit card just to get the bonus, but you don’t actually have reason to spend the money. Churners will only take out a card when they know they have a big purchase on which they can hit the minimum spend. 

Usually, someone who is churning a credit card will know they have a big spend and can save money with a card.

Example: They need to buy a new computer, knowing they'll spend at least $1,500. They might find one card that gives them a cash back bonus for spending $1,500 in three months or two cards that have a spend of $500 for the bonus.

Sometimes credit card churners can get up to $200 or $500 as a sign up bonus for their new computer purchase and bring their overall price from $1,500 to $1,000. This is a big saving! 


Pay it off.

Credit card churners will pay off these cards quickly, using credit cards like debit cards.

This allows them to make sure they don’t forget about a balance, especially when they have 20 or more credit cards. This also ensures that their credit score is as good as possible. 

Being organized is one of the most important things to churn a card; know what card you are actively using, and make sure to pay it off, so you don’t accrue interest. Accruing interest defeats the purpose of churning for the bonus. 



Considerations for credit card churning 

Credit card churning is not for everyone and there are some considerations to decide if this is right for you. First, you need to know your habits, credit score, and life events that may be coming up. 


One of the most important factors is to know your spending and credit habits.

For example, if you cannot pay your bills on time, then churning may not be for you. On the other hand, if you have to keep a balance, you can really hurt your score and accrue interest. 

If sales and discounts tempt you, this may not be for you either. You may be tempted to get a card and just shop on whatever to get the cash back. This isn’t a smart financial move.  


Credit score 

Credit card churning is not the right option if you don’t have a great credit score or are trying to improve your score.

It will slightly lower your score. While professional churners can handle the drops when taking out a new card, their score recovers to where it was. If you have a low score, this isn’t always the case. It can keep your score low and is just not an ideal move to make. 


Life events 

If you have any major life events happening where you need to apply for a large line of credit, taking out any credit cards could hurt you.

For example, if you want to buy a home or car, it’s ideal not to change your finances at all, from taking out a credit card to changing jobs. This could reduce the total amount you can borrow for these things. 



Final thoughts 

If you have to make a big purchase and know you are good with credit cards, then credit card churning may be something to try.

First, try it with one card and see how you feel about it. If it makes you worried or nervous, then don’t do it again. The few hundred dollars of cashback that you would get isn’t worth the worry.

However, if you have good credit habits and know you need to buy something, then why not get a few hundred dollars off that item?

Image by Republica from Pixabay 


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