What is Credit Card Churning?

Time To Read 3 MIN READ

Date: May 7, 2017

What is Credit Card Churning?

Credit cards have come a long way from simple convenience cards issued by banks. Many come with extra benefits and rewards these days, such as airline miles, hotel points or cash back. To maximize the benefits offered, so-called "credit card churners" try to open as many of these accounts as possible while incurring the least amount of damage to their credit scores and personal finances. . To help you fully understand credit card churning, we’ve rounded up the need-to-know facts, from the benefits to the setbacks and everything in between.

The Churning Process

A credit card issuer attaches benefits to a card to attract long-term cardholders. Credit card churners can cause headaches for issuers because most churners are not long-term players. Rather, a credit card churner will open as many rewards accounts as possible, accrue the benefits, and then close the accounts. 
This churning cycle can continue almost endlessly because the credit card industry is so competitive, there are always plenty of rewards cards available. Whereas a more traditional credit card user might open a couple of accounts and leave them open for years — if not for an entire lifetime — a churner will "churn and burn" through cards at a rapid pace, rarely holding a single card for more than a year —usually for a much shorter time period.

Benefits of Churning

The main benefit of churning is that an applicant can earn numerous benefits for minimal — if any — cost. For example, a card might offer applicants 50,000 air miles in exchange for spending $3,000 on the card in the first three months, with no annual fee charged for the first year. A churner might open the card, pocket the 50,000 miles, then close the account shortly thereafter, earning the rewards without paying the annual fee.

Then the churner will find another card offering similar benefits and go through the entire process again. Depending on the terms of the credit card issuer, a churner may even be able to open the same type of credit account multiple times, earning the reward each time.

Credit Score Consequences

While the benefits of credit card churning may seem enticing, there can be negative consequences — most notably the effect on your credit score. The industry-standard FICO credit score allocates 10 percent of your score to the amount of new credit you have and 15 percent to the length of your credit history.

Every time you apply for new credit, your score gets dinged a few points. Every time you open a new account, your credit history shortens. Although neither of these factors is singularly devastating, a lower credit score can hurt your chances of getting a car or a home loan at a more favorable rate.


One of the main limitations of credit card churning is that most issuers require that you spend thousands of dollars before you receive any benefit. If you open multiple cards at one time, your budget may not be able to handle all those spending requirements. If you don't pay off the charges, you'll be charged interest at a rate that exceeds any benefit you receive in terms of points or miles.
Many credit card issuers have also adapted to the "game" of churning. They now impose a limit on the number of times one person may benefit from opening the same type of account. For example, American Express allows only new cardholders to earn rewards, so you can't earn the benefits if you've already taken advantage of them in the past. Other card issuers have also changed their policies in line with American Express.