It’s difficult to accumulate a significant number of frequent flier miles/points (we’ll just call them ‘miles’) by flying alone. Savvy travelers are getting ahead of the game and collecting a huge number of miles using a practice known as a credit card churning. Here’s the low down:
What is credit card churning?
Many credit cards offer a bumper amount of miles as a bonus for signing up and spending a stipulated minimum requirement (supplemental bonuses are often offered for higher spends in the first three months of the card being active). This is particularly true of cards that have relationships with airlines.
People who credit card churn – ‘churners’ – are constantly tracking and taking advantage credit card promotions and sign-up bonuses, accumulating massive amounts of miles.
Typically they are juggling several credit cards (sometimes as many as 10) at any given time, meeting minimum spending requirements and ensuring the balance for each card is paid off in full every month.
Who can credit card churn?
Successful churners start with and, crucially, retain a good credit score. In fact, maintaining good credit (a score comfortably over 700) is the No. 1 rule of churning. Of course, a good credit score is important for all aspects of life – but for churners it’s essential since it’s the key to future application approvals.
Every application for a credit card is treated as an ‘inquiry’ on a person’s credit history. Inquiries always lead to a drop in credit score by a small number of points. Rejections lead to bigger drops. Clearly, only those with a good score can afford to make applications, let alone large numbers of applications.
Churning requires discipline and time to manage. Many churners have developed tried and tested plans that ensure a good balance between accumulating huge amounts of miles and retaining a good credit score (check out this churner’s 11 steps).
Where are the best credit card offers found?
Many churners not only blog about their experiences, but also keep up to date lists of the best credit card deals available at any given time. The lists run by the Frequent Miler and Credit Card Fly blogs provide a useful start to a search.
A health warning
Credit card churning is essentially a risk and reward game. If a churner does not meet their payments, they risk damaging their credit score, which can have adverse effect on their ability to secure a mortgage or secure finance for purchases like a car.
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(Image: Andres Rueda)