What Is Credit Card Churning?
Credit card churning is a strategy for repeatedly earning sign-up bonuses from credit cards. This approach involves opening multiple accounts to collect lucrative welcome offers, then closing or downgrading them before annual fees are charged.
How It Works
Churners focus on maximizing rewards such as cash back, travel points, or airline miles. Unlike regular cardholders who use cards for ongoing benefits, churners prioritize opening and closing accounts to capture sign-up bonuses.
Risks and Considerations
- Repeatedly opening and closing accounts can harm your credit score.
- Applications may be denied if issuers notice frequent activity.
- Some accounts may be closed by issuers if churning is detected.
“How many accounts are too many to open this year?”
Author’s Summary
Credit card churning offers big rewards but carries risks like credit score damage and account closures, making it a strategy best suited for those who understand the trade-offs.