Credit Card Churning 101: What You Need to Know


Credit card churning is the act of signing up for one or more credit cards, taking advantage of their special offers, and then cancelling the credit card before you have to pay the fees. Churning can help you get a lot of great perks, but you need to churn properly to avoid costly mistakes.

Should You Churn?

Before you start churning, it’s important to find out if it’s right for you, so you can avoid problems. If you pay your bills on time, then churning could be for you. In addition, you need to have a very good credit rating. It’s also helpful if you’re planning a few fairly large purchases sometime in the future.

Now that that’s said and done, here’s what you need to know about churning.

The Basics of Churning

Generally, you first need to sign up for the card. But it can’t be any old credit card. You need to compare credit card offers from various banks and not just the one you already bank with. You need to be selective, choosing the offers with the leading rewards that you are seeking to earn, e.g. Avios or Virgin. Once you’ve found one, you can apply for it, typically online. Before it’s time to pay the usual credit card fees, cancel the card. This helps you to avoid losing money.

Following the Rules

You won’t be able to obtain the rewards you desire if you don’t follow the rules and read the fine print. For example, if you are looking to get a credit card that has 20,000 bonus points for signing up, you need to consider if you can actually achieve this. So for example, the sign up bonus won’t hit your account until you first use the credit card and make a purchase of a certain amount, usually within 60-90 days of activation.

This is where strategy is so important in credit card churning. If you generally spend around £500 for groceries or other goods each month, then you can go ahead and use the card you’re going to churn and pay for your groceries. This will get you the extra money the card is offering while helping you pay for normal purchases.

Always look at the restrictions and rules you’ll have to follow to get the special offers. Find what looks convenient and feasible for your situation, and only do that.

Being Careful

When you are churning, you need to make sure you always meet the minimum spending requirements. Most importantly, you need to know that your credit rating will be affected to a certain degree by churning. Every time you apply for a card, your credit rating will be knocked down a couple of points. To help, you can churn with someone else to protect your rating.

The Learning Curve

We’re just scratching the surface here: credit card churning looks a lot easier than it is. If you have questions, and you definitely will, then may I recommend this Reddit forum where you can read what others have done and ask your own questions. Flyer Talk (a huge forum where frequent flyers discuss their techniques for earning points and status) is also well worth reading too.

Credit card churning is very beneficial for people who churn properly. But you must follow the rules so you can get as many rewards as possible without damaging your credit rating or losing money.

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