This highly lucrative method of obtaining frequent flyer miles is not for everyone, but if you have a good credit score and the discipline to pay your card balances off every month, the rewards can be huge. My wife and I have been on two “Around the World” trips in Business Class with most hotel nights free as well.
I define churning cards as applying for cards strictly for their sign up bonus, meeting the minimum spend requirements of the offer, if any, then putting the card in the sock drawer never to be used again. I cancel the card when the annual fee comes due next year.
The keys to success are having credit scores that warrant approvals and still leave your score in the good range. A Good Credit score is 700+ on the FICO scale and 800+ on the Vantage Score scale. Each inquiry or application will “hit” your score from 2-5 points but disappears off your report after two years. In theory if you currently have a score of 740, you could apply for 40 points worth of inquiries and still keep your score in the good range. At a five point reduction per inquiry, you could apply for 8 cards in the two year period and still keep a score of 700. At 2 points each inquiry, you could apply for 20 cards. Of course, you will need to make timely payments and keep your spend on each card at no more than 50% of your credit limit on each card. Remember to pay them off in full each month.
With the current sign up bonuses often offering over 25,000 free miles (30,000 Continental Onepass miles – some are as high as 100,000 mile sign up bonuses), this is a terrific use of your extra good credit score. Lenders don’t care once your score is in the good range. You get the same terms and conditions for a 790 credit score on the FICO scale as if you had a 700 score.
I’ve churned over 100 credit cards and still get approvals on the offers I apply for. One of the focuses of my blog is helping others take advantage of great card offers. But I always remind my readers that:
“Your credit is one of your most important assets”
There is no signup bonus worth ruining your credit. Always keep your scores in the “good range.”