What Is Credit Card Churning [2024 Guide]


This article addresses how credit card churning works, what banks do to prevent it, and how it can affect a credit score. While you might benefit from such a practice, there are a few cons you should keep in mind.

What Is Churning Credit Cards?

The purpose of credit card churning is not to use a credit card, but it’s the practice of repeatedly opening and closing credit cards to earn rewards and other benefits. Typically, when you sign up for a new credit card, you can be rewarded with various incentives, such as hotel stays, cashback, sign-up bonuses, and even trips, which come with a regular fee.

The term churning implies the process of opening a credit card, reaping the credit card benefits by spending the minimum amount, and then not using it again. The process is then repeated with another credit card at another bank.

NOTE: Many have found themselves in credit card debt due to churning. It becomes challenging to fix your credit in such situations.

How Does Credit Card Churning Work?

Although this practice is not illegal, consider these points before going on a credit card spree.

A Good to Excellent Credit Score

Banks primarily issue credit cards to those who have good or perfect credit scores. A good credit score implies that a person is financially responsible and can repay debts on time. If you have a low credit score, it would be difficult to manage multiple credit cards.


Handling credit cards come with a lot of responsibility. You must keep track of your expenses, especially if you have multiple cards. Missing one payment could negatively affect your credit score.

Time Interval

Ideally, you should wait at least a few months before applying for a new credit card. Applying before then will raise red flags to banks of your churning.


Churning credit cards is only possible if you have organizational skills. If you plan to churn, you must simultaneously manage various credit cards, keeping their minimum expenses and bonuses in mind.

Scrutinize Spending Habits

Holding many credit cards, combined with credit card perks, can make it easy for you to spend more money than you have. Uncontrolled spending leads to a debt trap. It’s essential to ensure that you only spend the amount you can pay back despite having many credit cards.

Key Takeaways

Card churning is the practice of repeatedly opening and closing a number of credit cards for their benefits and rewards.
You must have an excellent credit score for this to work, as banks distribute credit cards to those with a higher credit score.
You must be responsible and have a degree of organization to manage several credit cards simultaneously.
Scrutinizing your spending habits with credit cards is essential so as not to lead to a debt trap.

How Can Credit Card Churning Affect Your Credit Score?

Churning can affect your credit score in six ways.

Hard Credit Checks

If you’re thinking of churning, you should first understand the difference between soft and hard checks on your credit. Banks conduct hard credit checks to open credit cards, which can negatively affect your score. Churning, however, becomes problematic when it’s done regularly, causing damage to your credit score.

Credit Card Debt

When you hold multiple credit cards, your spending is bound to increase. Moreover, there’s a minimum expenditure on each credit card. Therefore, obtaining more than one card can cause you to spend more money than you have, leading to credit card debt. Although there are many debt relief companies to help, it’s best not to have more than one card.

Credit Utilization

Your credit utilization ratio is one of the many things that affect your credit score. Your ratio is calculated by determining how much credit you have and how much of it you use. If you pay your credit card payments on time, this ratio will reflect positively. But if you churn credit cards and do not give the payments on time, it can affect your credit score.

Payment History

A good payment history reflects positively on your credit scores. But while concurrently managing several credit cards, even one missed payment can affect your credit score negatively—then it may be necessary to seek the advice of credit repair companies.

Length of Payment History

The length of your payment history also determines your credit score. The longer your credit history, the better it reflects on your credit score. But if you have a long history of missed payments, your credit score will remarkably decrease due to managing multiple cards.

Credit Card Accounts

Opening several cards will lower the average age of your credit card accounts. If you repeatedly close credit cards, it will reflect negatively on your credit score. It’s best to stop using them rather than officially close them. Be sure to lock up the cards you’re not using to prevent identity theft, or better still, cut them up.

How Do Banks Prevent Credit Card Churning?

While opening and closing credit cards for rewards seems like a good idea, banks have established several ways to prevent such a practice. Here are a few rules that some of the more major cards and banks have set.

Chase 5/24 Rule

You cannot open a new Chase credit card if you’ve opened more than five personal cards in the last 24 months from any bank.


To prevent those from applying for a credit card solely for the sign-up bonuses, the bank rules of Citibank specify that if you cancel your card shortly after applying, you will not be able to reapply until after 48 months from your application date.

American Express

To prevent credit card churners from getting bonuses more than once, American Express introduced a new rule—they now provide sign-up bonuses to only one person per lifetime. After that, even if you cancel and reapply, you cannot receive any rewards.

Bank of America

The Bank of America follows an unpublished rule of 2/3/4, where you can only be approved for two credit cards per two-month rolling period, three cards per 12-month rolling period, and four cards per 24-month rolling period.

NOTE: Some insurance agents earn bonuses by churning insurance, not for the benefit of clients. Not only have banks established new rules to prevent churning, but you can also find yourself blacklisted by credit card issuers.


The process of repeatedly applying for credit cards for sign-up bonuses and then not using them again is known as churning. You need to be exceptionally responsible and have management skills to pull this off. Even one missed payment can impact your credit score. Many also find themselves in credit card debt as it becomes tempting to spend more. To prevent churning, banks have developed several controls, such as the 5/24 or 2/3/4 rule.


Why do people churn credit cards?

Each bank offers bonuses or rewards for those applying for credit cards. People repeatedly churn to get these rewards.

Can anyone churn credit cards?

Anyone who can apply for a credit card can churn, but you must be exceedingly responsible and have good management skills for this to work.

Does credit card churning hurt your credit score?

If you do not pay your credit card payments on time, then credit card churning can hurt your credit score. Moreover, it can also lead to credit card debt, which also markedly impacts the credit score.


I learned a lot about finance after working for a digital marketing company specializing in investing and trading stocks, forex, etc. After that, I got exposed to other verticals such as wealth management and personal finance, which further improved my understanding of the financial world.

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