What is credit card churning?

This controversial strategy involves applying for credit cards with bonus point offers, then cancelling them when you've been rewarded.

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The general goal with credit card churning is to earn as many bonus points as possible in a short amount of time, while also keeping your credit card costs down. In theory, as long as you meet the bonus point spend requirements, pay off the balance in full and cancel the card, you can avoid – or limit – the interest charges and annual fees that you’ll face.

While it might sound like a great idea, credit card churning can lead to negative listings on your credit file, impact your credit score and make it harder to get approved for new cards or loans in the future. So, before deciding if you want to collect points through credit card churning, let’s take a look at how this strategy actually works and what risks you’ll face.

How does credit card churning work?

While people who have successfully churned credit cards to earn more points usually have their own tips and tricks on what works, they typically follow a version of the steps below:

  1. Compare credit card offers. Usually, you would start by looking at the current rewards points and travel rewards offers on the market. This helps you find bonus point offers that suit your rewards goals. As well as the bonus point spending requirements, most people that churn credit cards also look for offers that include no annual fee, or, an annual fee that is waived in the first year.
  2. Apply for the card. Once you’ve chosen one or more cards, carefully read through the eligibility requirements. It can also be a good idea to look at your credit score before you apply, as the more competitive offers tend to require higher scores. After that, you can usually apply online in around 10-15 minutes and if you’re approved, you should receive your card within 1–2 weeks.
  3. Set calendar reminders. Credit card churning requires precise timing to get the bonus points and avoid extra costs. Most people using this strategy recommend that you set three different calendar reminders: one for the minimum spending deadline, one for your repayment due date/s and one for your card’s anniversary (which is when the annual fee is charged).
  4. Meet the bonus point spending requirements. While spend requirements can vary between offers, people experienced at credit card churning usually go for offers that have a straightforward requirement, such as spending $3,000 on eligible purchases in the first three months. This is because more complicated requirements can be more time consuming and increase the risk of interest charges or other costs. Check out our full guide to learn more about meeting bonus point spend requirements.
  5. Pay off the card’s balance in full. To avoid interest charges, you will need to pay off the full amount owed on the card by the due date on your statement. If the spend requirement extends over the course of a few months, you’ll need to make sure you pay off your balance every month.
  6. Check your rewards account. If you’ve met the bonus point spend requirement, it could take a few weeks before the points land in your rewards account. As a point of reference, most bonus point offers say you should allow six to ten weeks from when you meet the spend requirements. After that, you might want to call your provider to follow up, as it’s important you get the points before cancelling your credit card.
  7. Cancel your credit card. Once the bonus points have landed in your rewards account, you can cancel the card. The main goal here is to avoid paying the second year annual fee, which would be charged 12 months from when you opened the account.
  8. Apply for another bonus point offer. If you’re churning cards, you would typically apply for another introductory credit card offer after you’ve cancelled the previous card. Each time you apply, an inquiry is added to your credit file, so some people who churn cards recommend waiting a few months between applications to help space these hard inquiries out.

What about credit card churning for balance transfers?

Sometimes the term “credit card churning” is used in reference to 0% interest rate offers on balance transfers. In this case, you would be churning to get rid of debt without paying interest, instead of churning for rewards points. To do this, you would apply for a balance transfer card and enjoy the 0% APR introductory period before transferring the debt to a new card that also offers 0% interest on balance transfers. The main difference between this and churning cards for points is that balance transfer offers last a lot longer than bonus point offers.

That said, churning for 0% APRs on balance transfers can be difficult in Canada. This is because there are not many 0% offers on the market and most of them are offered by the same provider: American Express. You can’t apply for a balance transfer offer with the same credit card provider – you’ll need to apply with a new provider, which means you might run out of options rather quickly. You may, however, be able to find a few low rate balance transfer offers.

Potential risks of credit card churning

While the promise of thousands of bonus points can make it very tempting to churn credit cards, this strategy comes with some big risks and potential issues – both in the short term and the long term. Some of the pitfalls you may notice early on include:

  • Increased spending. Credit card bonus point offers usually require you to spend thousands of dollars within a set amount of time. If this amount is higher than what you usually spend on a credit card, it could have an impact on your budget, lead to interest charges or throw you into a cycle of debt.
  • Credit card fees. While some credit cards that offer bonus points may waive the annual fee for the first year, there is a good chance you’ll have to pay account fees for some of the cards you get. This means you’ll need to carefully calculate the value of the bonus points, compare it to the annual fee costs and decide if it’s worth it to get the full value out of churning.
  • Credit card debt. Increased spending and account fees also lead to a higher risk of credit card debt. While the goal with churning is to keep rates and fees to a minimum, it often requires careful account management to achieve that. The more cards you get, the more difficult managing your money may become.

couple on couch with blue credit card and laptop

Credit card churning and your credit score

One of the biggest potential issues with credit card churning is the way it can affect your credit score. This is because each time you apply for a new credit card, meet the bonus point spend requirements, then cancel the account, you’re adding details to your credit history that could hurt your credit score. Some of these damages include:

  • Multiple inquiries from lenders. Whenever you apply for a new credit card (or a different type of credit such as a loan), an inquiry is listed on your credit file. A lot of inquiries in a short amount of time can have a negative impact on your credit score because it suggests you’re shopping around for products. In the worst-case scenario for lenders, it could show someone is desperate for credit, which raises red flags. What’s more, each inquiry can stay on your credit file for around three years, so any potential lenders will be able to see how frequently you’re applying for new credit cards or loan products.
  • Decreasing the length of your average credit account history. When you open an account, your credit file will show it as active and record details of any activity, such as repayments, missed payments and defaults. It also shows when an account is closed. While accounts that have been open for a long time and have a good repayment history are usually seen favourably, those that are closed quickly after opening can have the opposite effect. This is because it can suggest instability and a lack of financial commitment.
  • Eliminating cards with good repayment history. Depending on the credit card provider, details of your repayments may be included on your credit file. If you regularly pay off your account on time – which is the goal with credit card churning – this is seen as positive information that could improve your credit score. But cancelling those cards once you have the bonus points means that this information is no longer relevant, so it could actually hurt your credit score in some cases.
  • Changing credit limits. Every time you open a new credit card account, your credit limit is added to your credit file. Lenders may consider the total amount of credit you have access to when they are looking at new applications. If your access to credit has been going up and down while you open and close accounts, it suggests instability that could hurt your credit score and can damage your chances of getting approved for new credit products in the future.

Is credit card churning worth it?

Credit card churning requires careful planning and management if you want to get the most value out of each bonus point offer. You’ll also need to carefully monitor your credit file and credit score to avoid declined credit applications down the road.

For some people, collecting points that can be used for flights, upgrades and other rewards may be enough to justify the effort involved in churning cards. But if it sounds like a big commitment, then it’s probably better to compare travel rewards credit cards and find one that offers a good mix of bonus points and ongoing features so you can stick with it beyond the signup bonus period.

Compare credit cards with bonus points on signup

Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Benefits with this card Description
American Express Cobalt Card
Earn 5 Membership Rewards points per $1 spent at eligible grocery stores, restaurants, bars, cafés and food delivery services, and earn 2 Membership Rewards points per $1 spent at eligible gas stations, and on transit and travel purchases, and earn 1 Membership Rewards point per $1 spent elsewhere. Terms apply
Earn up to 40,000 Membership Rewards points. In the first year, earn 2,500 Membership Rewards points for each billing period when you charge at least $500 in eligible purchases to your card (for a total earn of up to 30,000 Membership Rewards). Plus, earn up to 10,000 Membership Rewards points when you spend a total of $3,000 in purchases in your first three months
BMO World Elite Mastercard
$0 annual fee for the first year ($150 thereafter)
Get 3 BMO Rewards points per $1 spent on eligible travel, dining and entertainment purchases (up to $50,000 spend annually), and get 2 BMO Rewards points per $1 spent on all other eligible purchases (and once you reach the $50,000 annual spend).
Earn a bonus of up to 35,000 BMO Rewards points with a minimum spend of $3,000 on eligible purchases in the first three months of card membership ($250 travel value to be used towards a flight booked through bmorewards.com). Plus, get the $150 annual fee waived in the first year.
HSBC +Rewards™ Mastercard®
Earn 2 Points for every $1 spent on eligible dining or entertainment purchases.
Earn a Sign Up Bonus of 5,000 Points ($25 in travel rewards) when you keep your account open and active for 90 days.
Scotiabank Passport  Visa Infinite Card
Earn 2 Scotia Rewards points for every $1 spent on eligible grocery store, dining, entertainment and daily transit purchases, and earn 1 Scotia Rewards point for every $1 spent elsewhere.
Earn up to a total bonus of 40,000 Scotia Rewards points (up to a $400 travel value) in your first year. Earn 30,000 Bonus Scotia Rewards points when you spend at least $1,000 on eligible purchases within the first three months. Apply by July 1, 2020. Plus, earn 10,000 Bonus Scotia Rewards points each year when you spend at least $40,000 annually on eligible purchases (and earn 2,000 Bonus Scotia Rewards points for every additional $10,000 in purchases thereafter).
HSBC World Elite® Mastercard®
Earn 3% in travel rewards on all eligible travel purchases (6 Points per $1 spent) and earn 1.5% in travel rewards on all other eligible purchases (3 Points per $1 spent).
Earn a Welcome Bonus of 20,000 Points ($100 in travel rewards).
The Platinum Card from American Express
Earn 3 Membership Rewards points for every $1 spent on eligible dining in Canada, 2 Membership Rewards points for every $1 spent on eligible travel purchases as well as hotel and car rental bookings made with American Express Travel, and earn 1 Membership Reward point for every $1 spent on all other eligible purchases
As a new Platinum Cardmember, earn up to 60,000 Membership Rewards points in the fist six months. Earn a Welcome Bonus of 50,000 Membership Rewards points when you spend at least $3,000 on eligible purchases within the first three months. Receive an additional 10,000 Membership Rewards points after six months of cardmembership
American Express AIR MILES Platinum Credit Card
Earn 1 AIR MILE for every $5 spent on eligible food, drink, gas and transit purchases (up to an annual spend of $30,000), and earn 1 AIR MILE for every $10 spent on all other eligible purchases (and after the $30,000 annual spend)
Earn a Welcome Bonus of 2,000 AIR MILES when you spend at least $1,500 in eligible purchases within the first three months.
American Express Business Edge Card
Earn 3 Membership Rewards points for every $1 spent on eligible business essentials including office supplies, electronics, rides, gas, eats and drinks (up to an annual earn of 75,000 Membership Rewards), and earn 1 Membership Reward point for every $1 spent on all other eligible purchases
Earn up to 42,000 Membership Rewards points in your first year. Earn a Welcome Bonus of 30,000 Membership Rewards points when you spend at least $5,000 on eligible purchases within the first three months, and earn 1,000 Membership Rewards points each month (a total of 12,000 annually) when you spend a minimum of $3,000 on eligible purchases
Shell AIR MILES Mastercard from BMO
Get 2 AIR MILES for every $20 spent at participating AIR MILES Partners, and get 1 AIR MILE for every $20 spent on eligible purchases elsewhere.
Earn up to 800 AIR MILES Bonus Miles.
Shell CashBack Mastercard from BMO
Get 1.5% cash back at participating Shell locations in Canada (up to a maximum spend of $2,500 in any monthly billing period), and get 0.5% cash back everywhere else.
Get $50 in cash back bonuses once you charge your first eligible purchase to your card. Plus, earn 1% cash back for the first 6 months on all eligible purchases.

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*The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.

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