The concept of credit card churning is all about earning as many points as possible within a short span of time. To do this, you need to apply for a card, meet the requirements for the signup bonus spend, earn the bonus then cancel the card. The same process is done once again with the next card.
It may seem like a wise idea yet the practice of credit card churning may result to your credit history incurring negative marks. It also affects your credit score, making it more difficult for you to be approved for new loans or cards in the future.
If you have plans to give this strategy a try, make sure you know everything there is to learn about credit card churning to get a good idea of its potential negative effects.
Even though people who were able to successfully churn credit cards for earning more points often have their own set of tricks and tips on what can work, they often follow the steps below:
Compare Several Card Offers
Look for the best offers available to help you find the bonus point offers suitable to your rewards goals. Aside from the spending requirements for bonus points, those who practice credit card churning also search for offers with no annual fee during the first year.
Apply for the Credit Card
Take time to read all the eligibility requirements. You might also want to check your credit score before sending in your application higher scores are required for more competitive offers. After this, you can apply online in just 15 to 20 minutes. Once approved, you can get the card in 10 days.
Set Reminders on Your Calendar
Precise timing is required in credit card churning to avoid additional costs and receive bonus points. Many people who use the strategy suggest setting three different reminders in your calendar. One is for the due date, one for the deadline of minimum spending, and another one for the anniversary of your card when you are charged the annual fee.
Meet the Spending Requirements for Bonus Points
Although spend requirements may differ between offers, those who are familiar with credit card churning often go for the borrowers with straightforward requirement like spending $3,000 during the card membership’s first three months.
Pay Off the Balance of the Card
To prevent interest charges, you have to pay the full amount that you owe on the card on the due date indicated on the statement. In case the spend requirement goes beyond several months, you have to ensure that you do it every month.
Check the Rewards Account
Even after meeting the bonus point spend requirement, it may take as much as 8 weeks before these points are reflected on your account. You might want to contact the provider for a follow up after this as it is a must for you to get the points before you cancel your card.
Cancel the Card
Cancel your credit card once the bonus points are reflected in your rewards account. Your objective here is to avoid paying the annual fee for the second year that will be charged 12 months from opening the account.
Apply for a New Bonus Point Offer
It is typical to apply for a new introductory credit card offer once your previous card is cancelled if you want to churn cards. An inquiry will be included in your credit history every time you apply. This is why people who are churning credit cards suggest that you wait several months in between your applications for them to be well spaced out.