What is Credit Card Churning? The Ultimate Guide For 2023

Does traveling around the globe, at little to no cost, sound like a good deal to you? I’m John, owner slash writer of Credit Card Churning, and I certainly think it does! Credit card churning is a fun and unique way to earn points, miles, cash back, and other travel rewards by signing up for credit cards. But the question needs to be answered: What is credit card churning?

Taking advantage of the process of building credit and rewarding proper utilization, churning has exploded in popularity over the past few years. Part of this is due to the increase in the price of air travel and lodging and partly due to the rapid intensification of competition amongst credit card providers.

Through the advantages offered by churning and proper tracking of bonuses and spending, one can anticipate traveling for free or reaping extensive non-travel rewards. However, if not correctly managed, credit card churning can have an adverse effect on your credit score.

Note: For more information about potential risks associated with churning, check out this guide.

Ensure the best potential outcome for your spending

Careful planning, in-depth research, analysis and more will ensure proper outcomes. In the end, churning can fund flights and hotels for all future vacations, and lead to extensive savings. I’m proof of this. Without extensive business travel, I’ve saved tens of thousands of dollars in the past several years by credit card churning.

But what about a deeper dive into what credit card churning actually is, and what it does for you? Let’s get out of the shallow end and get going!

Diving Into the World of Churning

It may be difficult to fathom that it is possible to attain extensive travel rewards with a minimal effort outside your typical routine financial world. However, this type of reward reaping is more than possible with proper planning and knowledge of what churning is and how it works. So what is credit card churning?

Credit card churning is essentially exploiting the credit card rewards system. Basically, new cardholders get huge bonuses when spending a certain amount of money. “Churning” starts when you earn signup bonuses with a new credit card.

After earning your points, cash, or other rewards, you close that card (or just ignore it outside of occasional spending) and open a new one afterward. You’re sticking around for the good stuff before moving on to your next card. So, what’s the result? New cards with new rewards!

Most Effective Credit Cards for Churning in 2023

Becoming a “churner” may sound tricky, especially when your credit score is on the line. But, anyone can try it if they know the benefits of loopholes. Believe it or not, significant rewards don’t require significant effort. This is one of the unique elements of churning.

Whether you’re a backpacker, a geocacher, or you simply enjoy a great getaway, churning can help fund your upcoming trip. But churning doesn’t just help you earn travel bonuses. If you’re not interested in traveling, you can still take advantage of churning. Many credit card reward programs allow you to redeem points for cash or gift cards, so there are plenty of rewards you can easily receive.

Note: For more information about cash back vs travel rewards, check out this guide.

Churning is just one of the many travel hacks out there. But, in terms of saving money and receiving the best benefits, nothing beats it. The more cards you churn, the more rewards you earn, which always beats the rewards that come with one card and one card only.

There are plenty of creative ways to utilize this loophole, no matter your interests. Whether you’re earning travel points, gift cards, or cash, there’s something for everyone!

A recent personal experience with churning benefits

This is a great time to touch upon a personal experience I had with the fringe benefits of credit card churning. In early February 2023, my wife and I were traveling to Raleigh from Portland, connecting in Atlanta. The round-trip flight was on the dime of an interview location for my wife, so we purchased Economy tickets for the occasion at the workplace request.

The trip from Portland to Raleigh was a red-eye flight. I wanted to maximize the potential for rest on board, as my wife needed some sleep for her interview. Without increasing the price of the tickets, I was able to use about 25,000 points to upgrade the incoming two legs of the flight to Comfort+. This associated change played a huge role in ensuring we were able to rest on those flights and were far less cramped overall.

Manufactured Spending and Churning

Caveat: I have a massive guide to manufactured spending right here onsite, available here. The below is simply scratching the surface.

Artificial spending, also known as manufactured spending, is the process of gaining rewards without spending any of your own money. It works like this: You turn credit card spending into cash, then use that cash to pay off your credit card. In the end, you’re paying $0 in net spending but still manage to reap the benefits of a rewards card.

When you participate in manufactured spending, you can reach your minimum spending requirement faster, which means you’re even closer to those benefits. However, churners should keep a few things in mind before practicing artificial spending:

  • Meeting minimum spending requirements
  • Earn rewards without spending money
  • Do your research

In order to effectively allot your rewards, you need to meet the minimum spending requirements so you can get that sweet signup bonus. Just keep in mind that you have to do this without buying extra items. This is the most advantageous way of going about manufactured spending. Otherwise, you’re spending money when you don’t have to.

The ultimate goal is to earn rewards without actually spending money. There are plenty of ways to earn cash from manufactured spending, like utilizing cash-back rewards for a spread.

Cards with quarterly cash-back rewards are optimal for this practice, but it’s important to read the fine print of every card and pick the ones that are optimal for churning.

It’s extremely important to do your research. Don’t invest in any and every credit card out there. Manufactured spending is time-consuming; it takes a long time to familiarize yourself with the fine print. On top of that, it’s constantly changing, so you have to acquaint yourself with the practice.

Thankfully, artificial spending communities exist to provide churners with the latest information. There are several blogs and social media outlets out there that help you stay up-to-date on the latest churning policies and other information.

A Credit Card Churning Strategy Rundown

Manufactured spending is not necessary to earn rewards, nor do you need to participate in churning to practice manufactured spending. In fact, I have never partaken in manufactured spending, or business travel, and have reaped millions of points and miles in the process.

Basically, there are two ways you can earn rewards with credit cards: everyday spending and signup bonuses. Sure, you can earn points through regular purchases made on your credit card. But if you want to churn, you’re going to go for the second option.

Signup Bonuses over Everyday Spending

Churning is a unique way to rack up rewards and points without spending money in the long run. With how competitive the credit card market is, there are many banks out there that offer profitable reward points.

Through churning, you can profit from these rewards, but the most valuable ones to churn are signup bonuses. These bonuses (usually) consist of points between 25,000 and 100,000 but, depending on the card, your points/miles might change in value. For example, I have churned rewards for over 100,000 points six separate times split between two Hilton credit cards over the past six years.

After gaining that sweet, sweet signup bonus, simply ignore or wind down your card, and move on to the next one. That’s all there is to it! I personally don’t recommend canceling cards, as doing so can have a negative impact on your credit score.

You’ve probably heard of “credit card junkies” with handfuls of credit cards in their wallets looking like George Costanza. Chances are, they’re raking in points with churning – and maybe it’s your turn to join the club!

Utilizing Points Transfers to your Advantage

Also, keep in mind that you can sign up for cards with transferrable points. Chase Ultimate Rewards, Citi Thank you Points, Starwood Preferred Guest, and American Express membership cards are all great options for point transferring if you want to keep everything under the same roof. I personally prefer the following stack, and it has served me well for the past several years:

  • American Express Platinum, funneling to Delta or Hilton depending on needs and promotions. This is my main card currently for everyday purchases.
  • American Express Delta Platinum, for the annual companion pass (read more here). I’m looking into upgrading to the Delta Reserve if the time is right.
  • Two Hilton American Express Aspire cards for additional points and a ton of upgrade rewards.
  • A Citi American Airlines card and an Alaska Airlines Bank of America VISA.

If you’re looking for some recommended Hilton hotels to spend your points and rewards, I cover dozens of them on my massive Hilton Reviews page.

And lastly, we mentioned credit card churning communities earlier, but online apps are another awesome resource to use while churning. Various apps and websites compare cards and their rewards, keeping you up-to-date on the latest and best-quality points to churn.

We recommend downloading an app or bookmarking a website that can help you out with your churning efforts. It could save you a lot of hassle! This is one such website!

How Churning Affects Your Credit Score

Your credit score is based on the number of accounts you have, as well as the type of accounts you have. Owning multiple credit cards and paying them on the due date will increase your credit score.

Generally, people who churn credit cards will experience a slight decrease in their credit score. Churners will go through credit cards pretty quickly compared to the average cardholder.

First, they apply for a certain number of cards at the same time so that they all share the same credit score. After spending the minimum amount on them (and earning their bonuses), they cancel the card within a year, ready to start over with brand new cards.

I am not a heavy-duty churner, so I avoid closing accounts and applying for multiple cards at once. However, this is a working and successful strategy if you “play your cards right”.

I recommend avoiding churning if you’re in the process of buying a house. It will look suspicious to your mortgage provider if you have a noticeable spike in new accounts. This may lead to a higher interest rate or a pause on the purchase of your home. You can simply wait to churn until you’re done with the home-buying process. On the other hand, you can take a break from churning if you’re ready to buy a house.

For a very deep dive into how churning can affect your credit score, check out my guide here.

Finding The Best Credit Cards for Churning

Top-notch credit cards for churning are ones with the highest rewards based on dollar redemption value. In other words, the credit cards that can bring in the most cash are the ones you want to look for. On top of cash exchange value, cards with additional perks and flexibility with other point systems are used by efficient churners.

Some of the best cards fall under Chase and American Express. I personally don’t have any cards offered by Chase. For me, I consider the following cards optimal for churning:

  1. The Platinum Card from American Express
  2. Hilton Honors American Express Aspire Card
  3. Citi AAdvantage Executive World Elite Mastercard
  4. Delta SkyMiles American Express Reserve

Tips to Consider When Credit Card Churning

  1. Track your cards with a main tracking document. You want to record data such as the date you opened the card, the type of card, the card’s annual fee (and whether it’s waived or not), the spending requirement, and your current credit card balance.
  2. Read all of the fine print when signing up for credit cards. If you don’t carefully read the terms of your new credit card, there’s a chance you’ll miss out on your bonus. Some card companies will not give you a bonus if you’ve earned another bonus from the same company within the past 24 months.
  3. Avoid paying interest. The whole point of churning is avoiding fees and additional payments. If you pay your balance in full each month, you can avoid paying interest on it. Any interest you pay will lower the benefit you receive from your credit card. Additionally, you should avoid making cash advances, since balance transfers and cash advances aren’t considered purchases. In this case, you won’t reach your spending minimum. Spending extra money that won’t contribute to churning can severely affect your bonuses.
  4. Set a goal for your points. When it comes to points, the possibilities are endless. From visiting family during the holidays to two-week getaways in the Caribbean, knowing what you want to put your points toward can prevent you from using them impulsively.

Our Final Thoughts on Churning

Since people are taking advantage of a loophole in the system, churning is not illegal. But it takes time to effectively organize your cards and bonuses. Churning can be very rewarding if you’re willing to invest the time and energy into it.

We hope that this guide assists you with your churning endeavors because the financial benefits are unbeatable. Through organized planning, research, and effort, you can easily travel in luxury. And when you start churning, there’s no going back – nothing beats traveling like a millionaire at no cost!

Looking for some additional resources? Check these out: