Summer Credit Card Churn-i-versity: Part 1, The Basics

I was out to dinner with a friend last week, and after I was probably blabbering some nonsense about travel she asked me a few basic questions about credit card churning. I thought to myself, “sheesh, can’t you just go back 2 1/2 years ago and find some post I wrote about that in 2011?” Then I thought to myself, “Hey schmuck (me = schmuck). Who is going to go searching 2 1/2 years ago to find some random point I made about credit cards?”

Good point, my brain. Wouldn’t it be nice if I put together an overview of credit card churning during a nice slow summer week? Yes, yes it would be nice.

I know that lots of people have read this blog (and/or others) regularly and have a pretty thorough knowledge of the details of churning. That’s fantastic, and a hearty congratulations to each of you. Mazel Tov. But there are newbies to this thing all the time (as I find out from my credit card planning service) – it’s difficult to learn where to start.

So with that, let’s start the OTR Summer Credit Card Churn-i-versity.

Part 1: The Basics

Q: What is credit card churning, and why are you talking about it?
A: Most people think of credit cards as ways to pay for stuff. Or, perhaps they open a credit card tied in with their favoriate airline and put all of their spend on that card in hopes of earning enough miles for a trip one day. Churning is the idea that you can open many credit cards to earn miles and points. Your focus is on earning the bonuses associated with opening those cards, rather than on opening one or two cards and trying to earn points by spending.

Q: Wait a minute there, mister. I’ve always heard that opening credit cards lowers my credit score.
A: If there is one consistent fallacy about churning, it’s that the act of opening credit cards hurts your credit score. Let me say this unequivocally: opening credit cards does NOT hurt your credit score if it’s done smartly. Your credit score is made up of several factors, including how long you have had credit open; whether you have gone delinquent on credit payments; how many credit inquiries you’ve had; and how much available credit you have.

It is true that your score will take a small hit (usually 5-10 points or so) when you open a credit card (because the credit check – called a “hard pull” – costs you those points). However, over time you will earn those points back (if not more) by having additional open credit that you are not using. Let me put it this way: I’ve probably opened upwards of 50 cards over the past few years, and my score it still hovering around 800.

Q: Awesome, so even if I have bad credit and don’t pay off my bills each month I can get lots of free miles for travel?
A: Hold on, Sparky. Here’s the bad news: if you have credit scores below around 720 or so you should not be playing with credit card churning. If you do not pay off your credit card bills each month you should not be playing with credit card churning. If you are making a large purchase (say, a home) in the next 2 years, you should not be playing with credit card churning.

Q: Aw, you are a party pooper.
A: Yes I am. This brings up an important point about churning: you should feel comfortable with what you’re doing. There are people who churn 6 or 8 cards every 3 months. There are people who churn 2 cards a year. There is no right answer – you need to be able to sleep at night. You should feel free to start slow and ramp up from there once you understand the details. Again – don’t worry about what you read others are doing with the credit card churns. YOU have to live with the decisions you make.

Q: How do I keep track of all the credit cards I’m opening?
A: Some people just manage to remember. Some people put things in their iPhone calendar. I find it easiest to use this spreadsheet sent in by a reader that allows you to keep track of every card you’ve opened, the associated bonus, when you need to close it, and more. I couple that with iPhone reminders for when I need to close cards. That’s served me exceptionally well, except for the one time I was a moron about it and forgot to pay a $6 bill on one of my wife’s cards, and it caused a seemingly never-ending fiasco that I’m still dealing with 14 months later.

Q: Wait, what was that?
A: Yeah, many of us who churn have some sort of similar bout of stupidity. Use the spreadsheet, set up calendar reminders, and always set your payments to auto-pay. You’ll be fine.

Q: OK, this sounds fantastic…where do I start?
A: I think the first question you should answer is this: Where do I want to go on my first trip? We can start opening cards willy-nilly, and that’s fine too — lots of people just do that and accumulate points. If you’re a newbie, though, I find it easiest to decide on a trip and earn points specifically for that. Why? First, so you can quickly see the fruits of your labor. And second, because airlines and hotels tend to devalue their points over time, sitting on a ton of points you’re not using (like I do!), tends to be a poor strategy.

Q: That’s fine, but even if I decide I want to go to Hawaii, how do I know the best credit cards to open for that?
A: I guess there are a couple of ways to learn that. You are certainly free to ask me — that’s probably the easiest way. You can check my handy-dandy single chart of how many miles every airline requires to each destination. I’ll also be spending the next few days going over the various points programs, airline programs, and hotel programs to help show you the pro’s and con’s of each of them.

Q: Can I really earn enough miles to take a good trip? I’ve been putting my spending on a card forever, and I barely have enough miles for a trip to Florida.
A: Yes, absolutely! One example: I helped someone last year earn 500,000 miles to take 4 people in business class to China, just by opening credit cards. My family and I are going business class to Hawaii next month, with 12 hotels nights all for on points that I’ve earned with credit card signups. This is an incredibly powerful tool that opens up the entire world to you – really.

Q: So what’s the plan here?
A: In general, you’ll be opening cards and focusing on getting the minimum spend met on those (in other words, the minimum spend you need to earn a large mileage bonus). You’ll also want to pick a so-called “everyday card” for when you’re not trying to meet a bonus. Then there are purchase-specific cards (ie, cards that earn large cash back amounts for, say, groceries) that you’ll keep open when you make specific kinds of purchases. At the end of these tutorials, we’ll help you figure out the best card combination for you.

For Tomorrow: Let’s get started and talk about Chase Ultimate Rewards and Amex Membership Rewards, two programs that allow you to transfer points to a number of different partners.


  1. I am always on the lookout for rewards cards that have no annual fee or no minimum spend requirement. Those cards do exist and they have great value!

  2. I’m looking forward to this series – I’ve been stumbling through churning for a probably three years or so, but I know I could be a LOT better at it. So far I’ve paid one annual fee and somehow missed a final bill and had to jump through hoops with that credit card, so I paid a little interest that time.

    I’m looking forward to getting better at collecting miles! After flying in international first class… wow, there is no going back if I can help it.

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