Credit card churning is the strategic approach of applying for credit cards solely to earn their signup bonuses, possibly with no intention of using each credit card for anything else. People who engage in credit card churning often earn rewards bonuses with rule-bending methods like manufactured spending, which is basically reaching a spending threshold without really spending much money. The goal of many churners is to travel or earn signup money for free.
Churning is frowned upon by credit card companies - which makes sense, considering the average signup bonus for credit cards is about $200. There are many rules governing signup bonuses among card issuers to prevent people from abusing these offers. Some credit card companies cap how many bonuses you can earn across all of their credit cards, or how many credit cards you can get approved for in a certain period of time. And many credit card companies exclude things like balance transfers, gift cards, and money orders from their list of purchases that qualify toward a spending threshold.
It’s important to remember that credit card issuers have the upper hand on dubious bonus-seekers. The card issuers write the rules, after all. If an issuer sees strange activity on your account that looks like churning, they may review your account for violations, take your earned rewards away, or close your account entirely. And according to forums online, some card issuers may even close other existing accounts you have with them – including checking – if you apply for a credit card and they see you have too many applications on your report. It could make it harder to get approved for new accounts in the future, too. That’s all the more reason to tread lightly when it comes to credit card bonuses.
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