What is churning?

[Gregory1776]

Thanks. ☺

[Anonymous]

Churning is when you sign up for a credit card, earn the sign-up bonus, close the card, and wait to be eligible for the sign-up bonus. Then rinse and repeat. While this practice is within the rules of credit cards, it's not necessarily without its drawbacks. Your credit could take a hit from extra inquiries and a relatively young average age of accounts. Additionally, you don't really build up as much of a relationship with the banks. But you can get a fortune out of the bonuses. It's only a matter of time before banks find clever ways to head off the churners. Chase has already started by denying all applications for people who have already received five or more new credit cards within the last 2 years and Amex will only give you the sign-up bonus once per product. I personally prefer to pick cards that offer me long-term value and just stick with them.

[Anonymous]

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@Anonymous wrote:
Churning is when you sign up for a credit card, earn the sign-up bonus, close the card, and wait to be eligible for the sign-up bonus. Then rinse and repeat. While this practice is within the rules of credit cards, it's not necessarily without its drawbacks. Your credit could take a hit from extra inquiries and a relatively young average age of accounts. Additionally, you don't really build up as much of a relationship with the banks. But you can get a fortune out of the bonuses. It's only a matter of time before banks find clever ways to head off the churners. Chase has already started by denying all applications for people who have already received five or more new credit cards within the last 5 years and Amex will only give you the sign-up bonus once per product. I personally prefer to pick cards that offer me long-term value and just stick with them.

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I think you mean 2 years, not 5

[Anonymous]

Anyone have a few churn banks? For example, BoA offers 5 identical cards which offer the same rewards and more importantly the same $150 after spend $500 offer. That's a lot of cards to cycle through. Then head over to a different bank, then either to a different bank or back to BoA. Seems like you don't want to churn at banks you like and want to have relationships with. So I think it makes sense to have a group of banks you don't care about and use them to churn. 

[Anonymous]

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@Anonymous wrote:
Churning is when you sign up for a credit card, earn the sign-up bonus, close the card, and wait to be eligible for the sign-up bonus.

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In some cases you do not need to close the card, and even if idoes need to be closed, it is always safer to wait some time after earning the sign-up bonus before closing, to avoid sending an obvious signal to the issuer "I just got this for the bonus"!

[Anonymous]

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@Anonymous wrote:

Anyone have a few churn banks? For example, BoA offers 5 identical cards which offer the same rewards and more importantly the same $150 after spend $500 offer. That's a lot of cards to cycle through. Then head over to a different bank, then either to a different bank or back to BoA. Seems like you don't want to churn at banks you like and want to have relationships with. So I think it makes sense to have a group of banks you don't care about and use them to churn. 

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Yes, I think this is relatively common (among those who are stretching the system!).   For example, a lot  of people like Chase credit cards, and so avoid (or at least are more careful) doing things like MS, or bonus chasing on the cards where that is still possible outside of 5/24.   Whereas the same people will take risks with banks perceived as less useful.   For example, TD Bank had a card that gave 5% of "useful" categories for 6 months with no cap.   This was frequently "exploited" because if TD closed the card and blacklisted you, well, who cares.   

[wasCB14]

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@Anonymous wrote:

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@Anonymous wrote:

Anyone have a few churn banks? For example, BoA offers 5 identical cards which offer the same rewards and more importantly the same $150 after spend $500 offer. That's a lot of cards to cycle through. Then head over to a different bank, then either to a different bank or back to BoA. Seems like you don't want to churn at banks you like and want to have relationships with. So I think it makes sense to have a group of banks you don't care about and use them to churn. 

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Yes, I think this is relatively common (among those who are stretching the system!).   For example, a lot  of people like Chase credit cards, and so avoid (or at least are more careful) doing things like MS, or bonus chasing on the cards where that is still possible outside of 5/24.   Whereas the same people will take risks with banks perceived as less useful.   For example, TD Bank had a card that gave 5% of "useful" categories for 6 months with no cap.   This was frequently "exploited" because if TD closed the card and blacklisted you, well, who cares.   

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Are you thinking of Wells Fargo? Did Wells have a similar card? Or am I totally mistaken?

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:
Churning is when you sign up for a credit card, earn the sign-up bonus, close the card, and wait to be eligible for the sign-up bonus. Then rinse and repeat. While this practice is within the rules of credit cards, it's not necessarily without its drawbacks. Your credit could take a hit from extra inquiries and a relatively young average age of accounts. Additionally, you don't really build up as much of a relationship with the banks. But you can get a fortune out of the bonuses. It's only a matter of time before banks find clever ways to head off the churners. Chase has already started by denying all applications for people who have already received five or more new credit cards within the last 5 years and Amex will only give you the sign-up bonus once per product. I personally prefer to pick cards that offer me long-term value and just stick with them.

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I think you mean 2 years, not 5

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Yikes!  Fixed that typo.  No need to give Chase any ideas...

[Anonymous]

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@wasCB14 wrote:

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@Anonymous wrote:

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@Anonymous wrote:

Anyone have a few churn banks? For example, BoA offers 5 identical cards which offer the same rewards and more importantly the same $150 after spend $500 offer. That's a lot of cards to cycle through. Then head over to a different bank, then either to a different bank or back to BoA. Seems like you don't want to churn at banks you like and want to have relationships with. So I think it makes sense to have a group of banks you don't care about and use them to churn. 

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Yes, I think this is relatively common (among those who are stretching the system!).   For example, a lot  of people like Chase credit cards, and so avoid (or at least are more careful) doing things like MS, or bonus chasing on the cards where that is still possible outside of 5/24.   Whereas the same people will take risks with banks perceived as less useful.   For example, TD Bank had a card that gave 5% of "useful" categories for 6 months with no cap.   This was frequently "exploited" because if TD closed the card and blacklisted you, well, who cares.   

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Are you thinking of Wells Fargo? Did Wells have a similar card? Or am I totally mistaken?

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Wells Fargo has a similar card (they just put a cap on it), but I used the TD version as an example of a bank OK to annoy, as while I feel the same about WF, others value some of their cards.

[AverageJoesCredit]

Gregory1776, good example of churning can be found in a recent post about cards in ones collection and from first to last. When you see the one profile, youll understand a churner