Everything you Need to Know About Credit Card Churning

Signing up for a credit card for the first time comes with its benefits and bonuses. Some people have learned how to trick the system and use credit card churning to earn some easy money. In this article, you will learn to use credit card churning to get as many benefits and rewards as possible. 

Let’s get started!

What Does Churning Mean?

Credit card churning is a practice of frequently applying for new credit cards. Using these credit cards is not necessary, as you can cancel them any time before the annual fee due date.

That said, churning became a widespread practice among travellers. This way, they can use miles bonuses, discounts on hotel bookings, plane tickets, and more. 

You might be interested: Best Aeroplan Credit Cards in Canada

How to Make the Most out of Credit Card Churning 

Credit churning is a simple and useful process, used to take advantage of extra benefits and perks.

  • You need to apply for more than one credit card to activate bonuses and rewards. You don’t have to apply for all cards at once, but you have to apply for each credit card in a span not longer than three months. 
  • Pay attention to credit card fees. To avoid paying the annual fee, you may need to churn no-fee credit cards or cancel your credit card before paying the annual fee. Therefore, make sure to keep track of your credit card yearly fee so you can cancel in time.
  • If you want your churning to pay off and to win bonuses, you need to meet the minimum spending requirements. You can do this by purchasing gift cards and making your payments on time. Then, repeat this process after canceling your credit card and applying for a new one. 



How Does Churning Credit Cards Affect Your Credit Score?

Once you start credit card churning, you need to have a few factors in mind that come with this practice. While this kind of activity has many benefits, there are also downsides.

  • There’s a risk of lowering your credit card score with each credit card application. This is called a hard inquiry, and it can affect your credit card score in the first year. Then, after some time, the score increases. 
  • Opening a new credit card can lower your utilization ratio. However, closing it can negatively affect the ratio, making it go up. This can happen if you have a balance on your other credit card. If you don’t, the utilization ratio will stay intact.
  • Only 15% of Canadians have a credit limit of less than $2,000. Spending over this limit can negatively affect your credit score. To prevent a considerable decrease in your credit score and not fall into debt, make sure you pay your credit card bills early.




How do Banks Prevent Churning?

Banks have thought of many ways to prevent credit card churning. Here is a short overview of some of their policies:

  • American Express has a “once in a lifetime” bonus policy for personal credit card users. So, if you cancel your card and apply again, you won’t receive the bonus you got when you opened your first credit card. 
  • Chase introduced a policy that prevents users from applying for credit cards if they have already opened five in the last two years. This policy applies to both personal and business cards. 
  • Citibank avoids credit card churners with a policy that doesn’t allow members to apply for a credit card if they closed one in the last 24 months. This way, you will need to wait to open a new card to get your bonus. 

What are the Pros and Cons of Credit Card Churning?

Pros Cons
  • Credit card churning allows you to receive rewards every time you open a new card. 
  • You can win rewards such as free plane tickets, free hotel stays, gift cards, and cash. 
  • The more money you spend, the more bonuses you earn. 
  • Once you used up your bonuses, you are not obliged to continue using your credit card. You can cancel it anytime and open a new one. 
  • Your interest charges accumulate after some time if you don’t track your credit card balance.
  • Opening a new credit card can lower your credit card score and credit card age.
  • With banks coming up with new ways on how to avoid credit card churners, you may get your application for a new credit card denied. 

How to Maximize Rewards

Even though it must be tempting to apply for every credit card that offers bonuses, you have to focus on what purchases you make the most. For example, some cards offer cash back for a certain sum of money when buying groceries or dining at a restaurant. 

Furthermore, if you pay off your balance in time, your bank won’t charge you interest. Another helpful tip would be applying only for low-interest cards, as interest can accumulate and eat up any reward you have earned. 




Should you try Credit Card Churning in Canada?

While the rewards and bonuses that you can get with churning sound exciting, misusing it can damage your credit card score. If you’re not too careful, you can lose money paying for fees and interests. You need to have a good strategy and plan everything through to do this properly.  


Is credit card churning illegal?

Although churning credit cards isn’t illegal, credit card issuers are looking for ways to prevent it. Namely, many banks have regulations that restrict the number of credit cards a user can open.

How to churn credit cards?

Credit card churning is a simple process. Before you get started, look for credit card offers you’re interested in. Then, apply for them and spend the minimum requirement for a sign-up bonus. Finally, cancel the cards and repeat the process.



With an early start in journalism and years of work as a technical translator, Marija felt it was natural to blend the two. Passionate about news and research, she enjoys sifting through the data, researching new currents and the constant changes in our technologically and financially driven lives, as well as presenting the stats and facts to the readers so you don’t have to dig deep on your own.

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