Many credit card issuers offer great signup bonuses. So, the more rewards credit cards you open, the more signup bonuses you can earn. Credit card churning refers to the practice of repeatedly opening and closing a credit card to earn its signup bonus over and over. Doing this with several credit cards lets you rack up far more rewards than you would get if you stuck with just one credit card. Welcome to the high-risk high reward world of credit card churning.
One of the major risks associated with credit card churning is the damage it can do to your credit. For example, 10% of your credit score is determined by the number of new credit accounts you have opened recently. In general, experts recommend shopping for new credit within a 30-day window to minimize points against your score. This is why churners usually apply for several new cards on one day, then wait several months to apply for new cards. But if you are not careful about your credit card applications, your credit could take a hit.
If you are a credit card rewards junkie or aspiring to be one, you may have heard of credit card churning. Know that you have to be careful when you are signing up for multiple credit cards to earn bonuses and other perks. If you are not responsible with credit cards and you do not have the financial basics in place, you could end up deep in debt with a damaged credit score.
Credit card churning is a great way to quickly pile up rewards, but it takes a very dedicated spender to do properly. For many people, credit card churning is more trouble than it’s worth, so think carefully before playing this game. This article is brought to you by TFC Title Loans.