Churning is a very interesting way of traveling around the world at the minimum cost or no cost. It simply means signing up for a credit card which will offer you travel rewards, points, cash back and miles. Instead of opening the account forever, you should close them after you have achieved the bonus offers and perhaps other incentives. Credit card churning is one of my favorite ways to earn extra income without working more. Let’s get into our credit card churning guide to learn more.
You get to save money from various trips you would have taken otherwise. Or, if you are like me and love travel photography. I get to travel the world and participate in my hobby. There are significant opportunities to participate in churning while also conducting manufactured spending. Manufactured spending is the idea of generating cash from your credit card spend to then pay off your balance. This leads to significant points generation.
It does not come without risks. However, with careful planning, you can travel the world almost free. Here are some ways to use churning to travel around the world.
Credit Card Churning Guide: The Most Important Part of Travel Hacking
Credit card churning can be a great way to build up lucrative travel rewards for little to no cost. If you can’t travel or just don’t like to travel, use credit card churning as a form of passive income. Most credit card rewards programs offer points in cash redemption value. Use this credit card churning guide to help you get started. If you don’t like traveling, there is still options to consider…
You can redeem points for gift cards. Credit card churners find creative ways to use the points without a doubt, so there is no excuse for you to get involved in churning. Here we will highlight the key points regarding credit card churning and how you can get involved.
Travel hacking is a fun and exciting way to earn more travel rewards points.
It’s not for everyone, but you can travel hack without a credit card too! There are many examples of this, such as when I travel to Japan and learned several hacks.
Consider my travel hacks from Japan.
By churning credit cards you can explore the world for little to no cost.
Interesting Travel Tip From Churning Credit Cards:
The photo was from a recent travel experience in Amsterdam, Netherlands. We spent the entire day exploring the wonderful park of Vondelpark. Vondelpark is an amazing large scale park in the middle of Amsterdam. There is so much to explore in the park with large trees, hidden tea houses (‘tehuis’) and amazing lakes.
I highly suggest that you put Vondelpark at the top of your list when visiting Amsterdam. I snapped this photo when we were walking back from Vondelpark. It was perfect weather and the boat summed up what an awesome experience Amsterdam is. Go check it out!
What is credit card churning?
The credit card churning strategy is the act of opening credit cards solely for the benefit of the sign-up bonus. You then close your cards once you have achieved the bonus. You then re-open a new card with a similar bonus. For me, credit card churning is only a part of the travel hacking process.
Thus, building up more rewards points and travel benefits. In addition, you try to minimize your annual fee payments by closing unnecessary credit cards that do not warrant additional benefits.
What is a credit card churner?
A person that participates in the act of churning credit cards. Credit card churners are creative people and understand the benefits of loopholes. Through our guides on Millionaire Mob, you can obtain significant rewards points.
Try pairing our resources with Reddit churning to get the most out of your travel hacking experiences.
My Free Travel Hacking Spreadsheet Template
Well, the first tool that is a must-have is my travel hacking spreadsheet that is completely free to download. My travel hacking spreadsheet includes:
- Credit card churning tracker
- Manufactured spending tracking
- Hard pull credit inquiries
Read more about how I use the tracking spreadsheet in our overview.
Manufactured spending as a subset to churning credit cards
Manufactured spending is essentially a form of ‘artificial spending’ to generate rewards points without spending additional money.
With manufactured spending, you generate spending that can be turned into cash value which is then used to repay your credit card balance. Think of manufactured spending as a subset or a component to travel hacking.
Manufactured spending is an essential component of churning credit cards. However, it is not a necessary component. Many churners don’t manufacture credit card spending.
Vice versa as well. You don’t have to be a churner to participate in manufactured spending. I know a lot of people that have only one credit card that use manufactured spending as a way to generate some additional income.
We have an introduction to manufactured spending if you’d like to learn more. Manufactured spending allows you to hit the minimum spending requirement on your credit cards faster.
Thus, leading you the ability to scale out your churning ability. You can earn more points and open more credit cards. Plus, with manufactured spending, you don’t even need to worry about minimum spending requirements being too high! You can hit all of them even if it is $5,000 in three months.
Here are some considerations and rules to live by with manufactured spending (many of the rules can be applied to churning credit cards):
Credit Card Churning Strategy Overview
There are two ways of earning these reward points. First is through everyday spending and regular purchases. On every dollar you spend, you get a number of miles or points. It is important to maximize ‘bonus categories’ that cards offer such as dining on restaurants, travel, and more. No sense in giving up extra points by not using a specific card!
In the second method, you earn a greater number of rewards and miles by signup bonuses. You can get signup bonus ranging from 25,000 to 100,000 points (your miles / points may vary in value). Since the credit card market is so competitive, virtually every bank, airline or hotel offers lucrative reward points.
There are many apps online for credit card churners, which compare the credit cards of different companies and tell you about the highest and latest reward points. You can get transferable point cards like American Express membership card, Starwood Preferred guest, Chase Ultimate Rewards, Citi Thank you Points and more.
I like to think of my credit card rewards points as assets. Your rewards points have true value whether that is cash value or travel value. I like to track the balances of my rewards points like my net worth.
In addition, with rewards points, enable diversification by not relying on a single bank for all of your rewards points. Certain rewards programs are more flexible than others. With points devalutions nowadays, you don’t want to be stuck with lower valued points from your hard work.
Best Credit Cards to Churn
The best credit cards to churn include cards that are the most dynamic. I believe you need to prioritize the highest bonus cards based on dollar redemption value. Not only should these high bonus credit cards be prioritized. You need to have the most flexibility and perks. I love having lounge access with some of my cards along with TSA PreCheck. Here are some of the best credit cards to churn:
- Chase Sapphire Preferred
- Chase Sapphire Reserve
- American Express Membership Rewards Cards
- Chase Ink Preferred
The Chase Ultimate Rewards program related credit cards are the best credit cards to churn since the flexibility of the program allows you to redeem and transfer to nearly every major airline out there. What are some of your best credit cards to churn?
How does the strategy of credit card churning affect your credit score?
Your credit score is based on the number of accounts you have and the types of accounts you have. Having many credit cards with payments made on the due date will increase your credit score.
Churners go through credit cards on an everyday basis. They apply for a number of cards on the same day, so that the credit score remains same in all of them, spend the minimum amount and get the signup bonuses and frequent flyer miles and cancel the card within a year of its issuance.
The next year an experienced churner will do it all over again. Your credit score is less reliant on how many cards you have and how old your accounts are. You must stay focused on continually making on-time payments.
Your credit score can take a minor dip when participating in churning. However, over the long-term there is very limited impact on your overall credit score.
Personally, my credit score decreased about 20 points to 785 after I opened 4 new credit cards. Now, I am back into my 807 range for my credit score after taking a little time off from churning while I look for a new house.
If you are buying a house, make sure you pause on churning credit cards. If you have a big spike in new accounts in a one month span, your mortgage provider is going to bring up a lot of unnecessary questions.
This could potentially lead to a higher interest rate or pausing the home purchase in general. No reason to take that type of risk. Take a break from churning credit cards.
Use Credit Sesame to track your credit score when you start credit card churning. I was shocked at the small amount of impact this had on my credit score.
Is credit card churning illegal?
No. Credit card churning is not illegal. The process of churning credit cards is mainly a function of a loophole. A loophole is essentially an inadequacy in the system that can be circumvented or re-routed. With churning, you are essentially finding a crack in the system.
Each bank or credit card provider is different, so be sure to read through the terms and conditions of applying for a credit card. The only way churning works is if you understand what you can and cannot do with a particular card.
For example, Chase Bank has a number of different rules regarding their rewards program, Ultimate Rewards.
Chase has a rule called the Chase 5/24 rule that limits how many credit cards you can have within a 24-month timeframe. Here’s how you understand the Chase 5/24 rule. Credit card churning is a marathon and not a sprint.
In order to stay compliant just make sure that you read the fine print of all the credit cards that you apply for. You never want to get into a situation where you are outside of your comfort zone.
Word of Caution for Credit Card Churning
Although earning miles and traveling the world free is very lucrative, make sure to pay your bill on time otherwise the interest on your card will cost you very heavily.
Virtually ALL credit card churners pay off their balance at the end of the month to avoid paying ANY interest. Remember the goal here is to generate the most amount of points at the lowest cost possible.
There are costs that come with churning credit cards. For example, credit cards typically have an annual fee associated with them. This is normal for you to pay over the course of churning. In fact, many times you will pay extraordinary amounts of annual fees.
That is typically not a bad thing because your rewards for paying the fee are vastly greater. Do not pay annual fees for cards that have a useless ongoing benefit or the reward does not outweigh the cost.
Here are several rules to live by with churning:
- Stay organized by keeping all of your credit cards in a central tracking document. This will allow you to understand how long you have to hit the minimum spending requirement and when an annual fee will be due.
- Keep your expenses low. The goal in churning is to maximize credit card rewards points by minimizing the cost to you.
- Think about manufactured spending to help accelerate your bonus rewards by hitting the minimum spending requirement sooner.
- When you rack up significant credit card rewards points, learn how to book cheap award travel. This will help you string out your points longer, which leads to more travel!
- Read up on the latest tips and tricks with churning. Always read the terms and conditions of a credit card application.
- Live life by exploring the world. Create stories from your travel experiences.
Our credit card churning guide indicates how to travel hack like a millionaire. Through churning credit cards, you can live and travel like a millionaire without the costs. Think of all the place in the world where you can go.
Conclusion on my Credit Card Churning Guide
Keep a record of your credit card due dates and your monthly payments. Keep your finances under control and enjoy the benefits of credit card churning.
You must remain extremely organized through this process. You need to use churning to travel around the world and save money for travel! Regardless of changing rules, there will always be a place for churning.
Use my free travel hacking spreadsheet to stay organized and ahead of the curve. Stay ahead of the curve and you too can achieve churning success. You don’t want to make these mistakes with churning.
At Millionaire Mob, we believe the new financial freedom is achieving a million credit card rewards and a million dollar net worth. Join our community to achieve both. With both a million credit card rewards points and a million dollar net worth you can live a happier lifestyle.
Can you use our credit card churning guide to travel around the world? Please let us know if you have any questions or comments. We’d love to hear from you in the comments below.
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1 Comment
I use churning to allow myself to go on trips for next to nothing. I just went to Atlanta for a week with my girl and spent less than $400 for the whole trip! It’s crazy what you can do once you learn it. Thank you for the post.