What is credit card rotation?

Definition and example of credit card churning

How credit card churning works

Advantages and disadvantages of credit card churning

How to succeed in credit card churning

Is credit card churning worth it?

Definition and example of credit card churning:

Credit card churning involves regularly opening new credit cards to earn sign-up bonuses and then typically stopping their use. This includes opening multiple cards to accumulate a large number of miles or points or a significant amount of cash back in a short period. Thus, this strategy can be rewarding for skilled credit card users, even though it is risky for the average consumer. In recent years, credit card companies have implemented practices that limit churning.

How credit card churning works:

Many credit card companies offer attractive promotional deals on credit cards to entice consumers to apply for cards and spend large amounts shortly after opening the account. New cardholders can earn rewards such as cash back, airline miles, or points that they can redeem for purchases if they meet the minimum spending requirement within a specified timeframe—often within three months of opening the credit card.

To receive many of these rewards and valuable incentives in a given year, some consumers resort to credit card churning as follows:

Identify two or more cards offering attractive promotional deals in the form of your preferred rewards (for example, cash back, airline miles, or points) and do not impose a requirement to use the card again or keep the account open for a certain period after receiving the bonus. Apply for credit cards, either simultaneously or in succession with a very short gap between applications (usually less than three months). Meet the spending requirement for the cards and receive rewards. Stop using the cards or cancel them before incurring the annual fees. Repeat the above process to take advantage of more rewards.

Advantages and disadvantages of credit card churning:

Advantages:

– Receive more rewards: Signing up for multiple credit cards allows you to earn substantial
Source: https://www.thebalancemoney.com/what-is-credit-card-churning-4147321