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What is credit card churning?

This controversial strategy involves applying for credit cards with bonus point offers, then cancelling them when you've been rewarded.

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The general goal with credit card churning is to earn as many points as possible in a short amount of time, while also keeping your credit card costs down. In theory, as long as you meet the bonus point spend requirements, pay off the balance in full and cancel the card, you can avoid or limit the interest charges and annual fees.

However, credit card churning can lead to negative listings on your credit file, impact on your credit score and make it harder to get approved for new cards or loans in the future. So, before deciding if you want to collect points through churning, let's take a look at the finer points of this strategy.

How does credit card churning work?

While people who have successfully churned credit cards to earn more points usually have their own tips and tricks on what works, they usually follow a version of the steps below:

  1. Compare credit card offers. Typically, you would start by looking at the current reward and frequent flyer offers on the market. This helps you find bonus point offers that suit your rewards goals. As well as the bonus point spending requirements, most people that churn credit cards also look for offers that include a $0 annual fee in the first year.
  2. Apply for the card. Once you've chosen a card or cards, carefully read through the eligibility requirements. It can also be a good idea to look at your credit score before you apply, as the more competitive offers tend to require higher scores. After that, you can usually apply online in around 15–20 minutes and if you're approved, should get your card within 1–2 weeks.
  3. Set calendar reminders. Credit card churning requires precise timing to get the bonus points and avoid extra costs. So, most people using this strategy recommend that you set three different calendar reminders: one for the minimum spending deadline, one for your repayment due date/s and one for your card's anniversary (which is when the annual fee is charged).
  4. Meet the bonus point spending requirements. While spend requirements can vary between offers, people experienced at credit card churning usually go for offers that have a straightforward requirement, such as spending $3,000 on eligible purchases in the first 3 months. This is because more-complicated requirements can be more time-consuming and increase the risk of interest charges or other costs. Check out our full guide to learn more about meeting bonus point requirements.
  5. Pay off the card's balance. To avoid interest charges, you would need to pay off the full amount owed on the card by the due date on your statement. If the spend requirement goes over a few months, you'd need to make sure you do this each month.
  6. Check your rewards account. If you've met the bonus point spend requirement, it could take a few weeks before the points land in your frequent flyer or other reward account. As a point of reference, most bonus point offers say you should allow 6–10 weeks from when you meet the spend requirements. After that, you might want to call your provider to follow up, as it's important you get the points before cancelling your credit card.
  7. Cancel your credit card. When you see the bonus points have landed in your rewards or frequent flyer account, you can cancel the card. The main goal here is to avoid paying the second-year annual fee, which would be charged 12 months from when you opened the account.
  8. Apply for another bonus point offer. If you're churning cards, you would typically apply for another introductory credit card offer after you cancelled the previous card. Each time you apply, an inquiry is added to your credit file, so some people who churn cards recommend waiting a few months between applications to help space them out.

What about credit card churning for balance transfers?

Sometimes the term "credit card churning" is used in reference to 0% interest balance transfer offers. In this case, you would get a balance transfer card and enjoy the 0% p.a. introductory period before transferring the debt to a new card that also offers 0% p.a. interest. The main difference between this and churning cards for points is that balance transfer offers last a lot longer than bonus point offers.

Potential risks of credit card churning

While the promise of thousands of bonus points can make it very tempting to churn credit cards, this strategy comes with some big risks and potential issues both in the short term and long term. Some of the pitfalls you may notice early on include:

  • Increased spending. Credit card bonus point offers usually require you to spend thousands of dollars within a set amount of time. If this amount is higher than what you usually spend on a credit card, it could have an impact on your budget or lead to interest charges.
  • Credit card fees. While some credit cards that offer bonus points may waive the annual fee for the first year, there is a good chance you'll have to pay account fees for some of the cards you get. This means you'll need to carefully calculate the value of the bonus points, compare it to the annual fee costs and decide if it's worth it to get the full value out of churning.
  • Credit card debt. Increased spending and account fees also lead to a higher risk of credit card debt. While the goal with churning is to keep rates and fees to a minimum, it often requires careful account management to achieve that. The more cards you get, the more difficult that may become.

couple on couch with blue credit card and laptop

Credit card churning and your credit score

One of the biggest potential issues with credit card churning is the way it can affect your credit score. This is because each time you apply for a new card, meet the bonus point spend requirements, then cancel the account, you're adding details to your credit history that could hurt your credit score. This includes:

  • Multiple inquiries from lenders. Whenever you apply for a new credit card (or other loan), an inquiry is listed on your credit file. A lot of inquiries in a short amount of time can have a negative impact on your credit score because it suggests you're shopping around for products. In the worst-case scenario for lenders, it could show someone is desperate for credit. What's more is that each inquiry can stay on your credit file for up to five years, so any potential lenders will be able to see how frequently you're applying for new credit cards or loan products.
  • Decreasing the length of your average credit account history. When you open an account, your credit file will show it as active and record details of activity (such as repayments and defaults). It also shows when an account is closed. While accounts that have been open for a long time that have good repayment history are usually seen favourably, those that are closed soon after opening can have the opposite effect. This is because it can suggest instability and a lack of financial commitment.
  • Eliminating cards with good repayment history. With comprehensive credit reporting (CCR), details of your repayments may be included on your credit file. If you regularly pay off your account on time – which is the goal with credit card churning – this is seen as positive information that could improve your credit score. But cancelling those cards once you have the bonus points means that this information is no longer relevant, so it could actually hurt your credit score in some cases.
  • Changing credit limits. Every time you open a new credit card account, your credit limit is added to your credit file. Lenders may consider the total amount of credit you have access to when they are looking at new applications. If your access to credit has been going up and down while you open and close accounts, it suggests instability that could hurt your credit score and/or your chances of getting approved for new credit products in the future.

Is credit card churning worth it?

Credit card churning requires careful planning and management if you want to get the most value out of each bonus point offer. You'll also need to carefully monitor your credit file and credit score to avoid declined applications down the track.

For some people, collecting points that can be used for flights, upgrades and other rewards may be enough to justify the effort involved in churning cards. But if it sounds like a big ask, then it's probably better to compare frequent flyer credit cards and find one that offers a good mix of bonus points and ongoing features so you can stick with it beyond the honeymoon period.

Compare credit cards with bonus points on sign-up

Data indicated here is updated regularly
Name Product Bonus points Rewards program Rewards points per $ spent Purchase rate Annual fee
NAB Qantas Rewards Signature Card
130,000
Qantas Frequent Flyer
1
19.99% p.a.
$295 annual fee for the first year ($395 p.a. thereafter)
Collect up to 130,000 bonus Qantas Points. Get 100k when you spend $3,000 on eligible purchases in the first 60 days and 30k after 12 months.
Qantas American Express Ultimate Card
55,000
Qantas Frequent Flyer
1.25
20.74% p.a.
$450
Get 55,000 bonus Qantas Points, a $450 Qantas Travel Credit and 2 yearly complimentary Qantas Club lounge invitations.
Westpac Altitude Platinum Qantas
60,000
Qantas Frequent Flyer
0.5
20.49% p.a.
$99 annual fee for the first year ($200 p.a. thereafter)
Get 60,000 bonus Qantas Points when you spend $3,000 within 90 days. Plus, a first-year annual fee discount and a long-term balance transfer offer.
St.George Amplify Signature
200,000
Amplify Rewards
1.5
19.74% p.a.
$139 annual fee for the first year ($279 p.a. thereafter)
Up to 200,000 bonus points (130k in the first year & 70k in the second year) when you spend $12k/year for the first 2 years. Ends 30 Sept 2020.
Bank of Melbourne Amplify Platinum - Qantas
60,000
Qantas Frequent Flyer
0.5
19.74% p.a.
$99
Receive 60,000 bonus Qantas Points when you spend $2,000 within 90 days and earn up to 0.5 Qantas Points per $1 spent. Ends 30 Sept 2020.
American Express Business Explorer Credit Card
100,000
Membership Rewards Gateway
2
16.99% p.a.
$395
ABN holders w/ $75,000 revenue. Get 100,000 bonus points. Plus, 2 airport lounge passes.
Bank of Melbourne Amplify Signature
200,000
Amplify Rewards
1.5
19.74% p.a.
$139 annual fee for the first year ($279 p.a. thereafter)
Up to 200,000 bonus points (130k in the first year & 70k in the second year) when you spend $12k/year for the first 2 years. Ends 30 Sept 2020.
BankSA Amplify Signature
200,000
Amplify Rewards
1.5
19.74% p.a.
$139 annual fee for the first year ($279 p.a. thereafter)
Up to 200,000 bonus points (130k in the first year & 70k in the second year) when you spend $12k/year for the first 2 years. Ends 30 Sept 2020.
BankSA Amplify Platinum - Qantas
60,000
Qantas Frequent Flyer
0.5
19.74% p.a.
$99
Receive 60,000 bonus Qantas Points when you spend $2,000 within 90 days and earn up to 0.5 Qantas Points per $1 spent. Ends 30 Sept 2020.
American Express Gold Business Card
100,000
Membership Rewards Ascent
1.5
N/A
$169
ABN holders w/ $75,000 revenue. Get 100,000 bonus Membership Rewards Points and up to 51 days to pay for purchases.
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Credit Cards Comparison

Data indicated here is updated regularly
Name Product Purchase rate Balance transfer rate Annual fee
Skye Mastercard - Exclusive Offer
23.99% p.a.
0% p.a. for 25 months
$99
Finder Exclusive
Save with 0% p.a. on balance transfers for 25 months, up to 110 days interest-free on purchases and flexible instalment plan options.
ANZ Low Rate - Exclusive Offer
12.49% p.a.
0% p.a. for 25 months with 1.5% balance transfer fee
$0 annual fee for the first year ($58 p.a. thereafter)
Finder Exclusive
Save with 0% p.a. on balance transfers for 25 months (with a 1.5% BT fee) and $0 first year annual fee.
NAB Qantas Rewards Signature Card
19.99% p.a.
0% p.a. for 6 months with 2% balance transfer fee
$295 annual fee for the first year ($395 p.a. thereafter)
Collect up to 130,000 bonus Qantas Points. Get 100k when you spend $3,000 on eligible purchases in the first 60 days and 30k after 12 months.
ANZ Platinum Credit Card
0% for 17 months, reverts to 20.24% p.a.
20.24% p.a.
$0 annual fee for the first year ($87 p.a. thereafter)
Receive a 0% purchase rate offer for 17 months and a $0 first-year annual fee. Plus, complimentary overseas travel and medical insurance.
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* The credit card offers compared on this page are chosen from a range of credit cards finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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