How often can I churn frequent flyer bonus point offer credit cards?
Credit card churning is the well-known art of applying for credit cards with sign-up bonuses, hitting the minimum spend requirements, and then cancelling the card and repeating every few months. It means you earn as many points as possible in a short amount of time or in reasonably quick succession. How does it work? And can you be penalised?
Firstly, your credit rating will take a small hit if you apply for too many cards. So a semi-regular approach here is better, then your credit rating has a chance to recover before going after the next card.
So, before deciding if you want to collect points through churning, take a look at the finer points of this strategy. Make sure you’re checking the fine print on offers and know what you’re signing up for before diving in.
To lessen the impact on your credit rating, only apply when you are confident of success, which means checking your credit score to assess the likelihood of success. Multiple open credit cards will lessen your chance of getting approved for a further line of credit so be sure to close the card accounts once you have hit the minimum spend and are ready to apply for the next signup bonus card.
If not handled well, the impact on your credit score can make it harder to get approved for new cards or loans in the future. Be sure to never skip this step!
In theory, you should be able to meet the bonus point spend requirements and have the capacity to repay that spend in full each month. Paying off the balance in full and closing down the card account should help you avoid or limit the interest charges and annual fees.
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The products, banks and companies mentioned in this Ask Miles question and answer section was correct at the time of publishing. The information published is general advice only and should not be taken as specific personal finance advice.