In February I shared my suggestions for a first time credit card churn. Reader Kelly left the following question on that post yesterday, which I suspect a lot of people have:
I’ve been using this site for a long time to research which cards have the best rewards, but I’ve never really understood churning or tried it.
So I guess this is similar to Rebecca’s question. In general, how do you define “churning”? And the part I am most confused about is – do you have to cancel a card before applying for it again? If so, how long do you have to wait?
For example, the Alaska Signature Visa that you said is still churnable… how exactly does one go about churning it? Thanks so much for unraveling this mystery for me.
While it’s probably not the intent of her question, Kelly actually raises a great point. For the most part, what we’re doing when we sign up for credit cards nowadays isn’t really “churning.” Credit card “churning” is typically defined as signing up for the same credit card multiple times for the sign-up bonuses. Nowadays it’s commonly used to refer to signing up for credit cards exclusively for the sign-up bonuses, even though you can only get the bonus on most cards once.
Back in the “good old days” many credit cards were “churnable.” For example, Citi let you apply for the same AAdvantage credit card every 60-90 days. Back then you had people that signed up for the same exact credit card 4-6 times per year. And Citi had three types of American Airlines credit cards, so some people were getting the bonus on American co-branded credit cards over a dozen times per year. Now, those were the days of 25,000 mile sign-up bonuses, but still.
I think most of us asked ourselves how stupid they could be for not catching on, though in the meantime they’ve closed that opportunity and you can’t earn the bonus multiple times (at least per the rules). Hey, can we really blame them?
So while you can easily rack up hundreds of thousands of miles and points per year by signing up for credit cards, you’ll eventually run out of cards… right?
Well, not necessarily, as there are still some cards that are churnable. Please keep in mind that this is very much a case of “your mileage may vary.” I share these based on the experiences I’ve had and also those I’ve read about. And I’d appreciate if you guys could share your experiences in the comments section below as to whether your experiences match my observations. However, I would suggest not calling up the credit card companies directly and saying “hey, can I apply for this card five times a year and earn the bonus each time?”
With that in mind, here are the cards that I’ve heard are still churnable:
US Airways Premier World MasterCard — 40,000 miles after the first purchase; no annual fee the first year
Alaska Airlines Visa Signature Card — 25,000 miles after the first purchase; $75 annual fee the first year
Hawaiian Airlines Signature Visa Card — 35,000 miles after spending $1,000 within four months; $79 annual fee the first year (it’s worth noting that Hawaiian miles can be transferred at a 1:2 ratio to Hilton HHonors)
And then there are some cards that are semi-churnable:
Gold Delta SkyMiles American Express Card — 30,000 miles after spending $500 within three months; no annual fee the first year
Note: According to DeltaPoints, American Express lets you earn the bonus on their Delta cards every 24 months. So if you open your account today, you can receive the same bonus again in two years, regardless of whether you closed the previous account or not. This is why I signed up for the Delta SkyMiles Gold card last year, despite the sign-up offer not being especially compelling.
Chase Ink Bold Business card – 50,000 points after spending $10,000 within three months; no annual fee the first year
Note: While the card isn’t “churnable” in the traditional sense, Chase rebranded the Ink Bold card in late November (the new benefits can be found here), and as such they treat it as a new card for the purposes of the sign-up bonus. If you signed up for the card under the old benefits, I’m told you can re-apply and earn the 50,000 point sign-up bonus again. Fortunately I applied before they switched the card over, so should be able to get the bonus again.
So that probably leaves a couple of questions:
a) Do you have to cancel your existing card before applying again? For all of the above cards you don’t to the best of my knowledge. Does anyone have experiences that contradict that?
b) When should you cancel the “old” credit card if you plan on applying for the same one again? Since having an existing card isn’t an issue for the above cards, it really doesn’t matter. So as usual my advice would be to keep the cards open for as close to a year as possible without paying the annual fee. One part of your credit score is how long your accounts have been open on average, so the higher the number the better your score.
b) So how do you explain to the credit card company that you need two of the same credit cards? There are plenty of good reasons to have multiple credit cards. Just explain that you need to keep expenses separate (be it because one card is for reimbursable business expenses and the other for personal expenses, or whatever your preferred excuse is).
Any other questions, or did I miss anything?
Full disclosure: I do receive a referral bonus if you choose to apply for the Chase Ink Bold or Delta SkyMiles American Express through the links above, and of course I’m incredibly appreciative if you choose to use my links. I don’t receive a referral bonus for the other cards listed.