Credit Card Churning 101

An easy way to earn hundreds of thousands of ‘free’ miles and points is through opening credit cards. It is a heavily practiced process by frequent travelers as a mean to not only earn a large number of miles and points quickly, but also to gain status. Over the past year, I have used this process, known as Credit Card Churning to earn over two-hundred thousand miles and points in a one-year period.

What is Credit Card Churning? (also known as APP-O-RAMA or ‘AOR’)

This question has been asked to me many times by my friends who wonder how I accumulate miles so quickly. A simple way to explain it is that it is the process of opening up a few credit cards at a time every couple of months with the sole intention of gaining a large number of miles and points. A more detailed explanation of credit card churning can be found in the WiseBread post entitled Credit Card Churning: Making the Most of Bonus Offers.

Credit card churning is not for everyone, and should only be used if you plan to actually use the miles and points you are accumulating. What do I mean by saying it is not for everyone? Here is what it means…

  • DON’T churn if you plan on spending more than you make or plan to carry a balance. When you open up new credit cards, you have a higher line of credit available. If this extra money is going to tempt you into wild shopping sprees and high spends, I advise you not to take part in this practice.
  • DON’T churn if you are planning on a big purchase in the near future such as a car or house; Fox Business explains why here.
  • DON’T churn if you have a low credit score. Although churning does not take a significant amount of points off of your score, it does take a few points off. If you have a low score, reducing your score by more points may not be the wisest decision.

Myths about Credit Card Churning 

  1. It will hurt your credit score. Nope, it will not hurt your credit score, I am relatively unaffected after one year, missing a few points, but I still have good credit. Keep churning on my friends.
  2. You will earn tons of miles for free. Sometimes there is an annual fee involved (that may or may not be waived the first year) so miles are not always ‘free’, but the benefit of the miles generally outweighs the cost.
  3. Credit card churning is hard to do. Nope, that’s a myth right there. Here are some links that explain churning quite easily to get you started.

I’ve Applied. Now What?

A number of things could happen after you start doing your credit card churning. You could be approved immediately, you might have to call the company for further review (at which point you will be approved or denied), you might be told to wait for a decision by mail, or you might just be outright denied.

If you are denied, you can make a reconsideration call and try to turn that no into a yes. MillionMileSecrets explains how to do it.

If you are approved, you have to meet the minimum spend requirements (which can be anything from one purchase to upwards of $5000 in 4 months; I personally only apply for cards with no more than $2000 minimum spend in 4 months). If you are worried about reaching minimum spend requirement, MillionMileSecrets wrote about 40+ Powerful Ways to Complete your Credit Card Minimum Spending Requirements.

Soon, I will be writing a post about my different credit card churns/AOR’s and how I was able to set my goals and meet them. Have you ever done a churn before? If not, would you consider doing one?

By |2017-07-30T01:10:14+00:00September 18th, 2013|Budget Travel|0 Comments

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