How to Credit Card Churn Without Going Insane

TLDR; you can make $1000/hr through CC churning or just use my referral link and I’ll be happy

This is how it usually goes…..

1. You hear a story from a friend or an acquaintance on how they opened 12+ cards in the last year and wonder at what point they went insane and decided to destroy their credit.

2. A month later, you stumble upon an Instagram post of the same person holding a glass of champagne lounging in business class on a flight to Europe.

3. You take the red pill and realize that banks and airlines have been handing out free money to Americans for years.

4. You start to plan vacations years in advance. You no longer use Airbnb but prefer to stay in Hyatt only resort properties. You start checking business class reward flights every week to Europe or Asia.

5. It becomes all-consuming to your life and suddenly one day you realize you could’ve just spent all of this time on travel actually focused on your career and making much more money.

Andrew Walker from Yet Another Value Blogg puts it nicely here:

“As you get older your time gets more valuable and the incremental time to chase every last dollar of credit card rewards is no longer worth it versus the incremental time I could spend investing / writing / cleaning up after the new analyst”

But I don’t believe that entirely.

On one hand you could argue that it’s not a time for time match. Gaming systems like credit cards is kind of fun and not equivalent to direct work.

And on another hand - I’m sure most people are worth at least $1000/hr right? So unless you’re taking home $2 million a year, it might be advantageous to read more.

Let’s start out with an assurance that your credit score will be fine

There is a common and disprovable myth that credit card churning will destroy your credit. It’s disprovable to the point that opening 20+ credit cards a year will not impact your credit score as much as you think. There is ample evidence that in the models that generate FICO, average length of credit history, which gets affected by opening up more cards, only affects up to 15% of your overall score.

Well you might argue - “alright, that’s still quite a large percentage of my credit score and could take me from an 800 credit score to 680 which is horrible!”

Yes - that would be the case if your average length of credit history score (ACHLS), was 0. So let’s look at the sliding scale between two extremes:

• Average credit history of >5 years = 100%

• Average credit history of 1 day = 0%

When you credit card “churn”, you are essentially mixing both long credit history from credit cards that you never use and never cancel (because they have $0 annual fees) with the ones that you cancel every year to avoid paying the annual fees.

So lets say that you open 10 cards. 2/3 of them you cancel after 1 year and the other 1/3 you keep open for at least 5 to 6 years.

On average your score is going to be 7 cards * 1 year + 3 cards * 6 years = 26 / 10 = 2.6 years average credit length. So your ACHLS is going to be around 2.6 / 5 = ~52%. Squarely in the mean.

So if you do everything else 100% well like a good reputable human being such as pay off your credit cards on time (35% payment history), and don’t carry over balances on your credit cards (30% amounts owed), and open new credit cards (an easy 10% ), your 52% ACHLS will bring your credit score down to a whopping 789*.

So even if you are the most insane churner of all time - you’ll still have a score in the 90th percentile (>750) if you just pay your credit cards and other loans on time, in full, every single month. You can even pre-pay them if you want to increase your credit utilization rate (amounts owed) which is computed by the percentage of credit balance you owe divided by your total credit limit.

The Convenience / Optimization Spectrum

Okay, now you’ve accepted that you can churn without killing your credit score. Now is it worth your time?

For example this year I have traveled to:

1. Winter Park and Salt Lake City for skiing

2. Morocco and Switzerland (with a business class flight back)

3. The jungle of Belize for a wedding.

4. El Salvador for surfing.

5. OKC and Kauai for weddings and a hard but glorious hike.

6. PDX / Seattle two times already for trips.

And paid less than a couple hundred dollars for the whole year.

Again - it all depends on your convenience / optimization spectrum. At least for me credit card (CC) churning is equivalent to $1000/hr.

Everyone exists on some sliding scale here between convenience and optimization.

For example, if you’re the convenient traveler, you would rather not think about planning or are usually “that guy or girl” in the group trip who says “just Venmo me what I owe”. These kinds of people reminisce about the days of travel agents and excited for the future AI travel agents. But most importantly, these convenient travelers just don’t care about investing time into saving money on travel or planning it.

On the other hand - if you’re on the other side…you’re the optimizer. When you book a hotel that originally retails for $500/night with $250 in credit card rewards, you’ve essentially completed your purpose in life. You might have been a coupon saver in a prior life before realizing you could get more leverage with CC churning. And IMO, most CC churners are optimizers, either because of reasons of mis-valuing their time or just because they enjoy the churning game in the same way you might enjoy reading a book or going for a swim.

In my opinion, you can still earn at minimum $1000/hr churning wherever you lie on this spectrum. But for many of the optimizers, getting good deals can be sometimes priceless.

The number one reason why many people get frustrated by churning is because the existing CC churner community places such a high bar on your redemption optimization, which means how you optimize the points your earn towards maximizing your deals.

Here’s a PSA: YOU DON’T HAVE TO BE A CRAZY REDEEMER OF POINTS TO CHURN. Some people on Reddit will shout, scream, and call you stupid all day long when you use your points to pay off your credit card bill even if transferring them out to an airline gives you a 25% increase in value.

But IMO, simplicity is king and each person is different. And so if you want to reduce the overhead and learning curve of churning, there’s nothing wrong with just realizing that earning points is mostly simple but maximizing them can be complex.

Here’s How I Earn $1000/hr while Churning

For example the AMEX Platinum offer is spend $8000 in three months to earn 125K points. AMEX is usually on the higher end of spending requirements. Most are lower at around $3000 to $5000 required in 3 to 6 months.

I open around six to eight cards a year. Each credit card I open has a value offer associated with how much you need to spend. Usually these 6 to 8 cards a year I open equate to around $10,000 in travel value and keeps it mostly manageable to keep on top of, doesn’t make me second guess if I will be approved for more cards, and allows me to travel 95% of the time without paying out of pocket.

And I spend around 30 minutes to an hour a month working on opening, closing, or checking if I hit spend on a card. Which gets me to earning $1000/hr.

Choosing Your 1st or Next Card

Each time I hit the spending requirement for one card, I shelve it in a drawer and I finish using it. When I’m ready to open card #2, 99% of the time I go this list on Doctor of Credit. These are the top credit cards ranked by a neutral third party that does not make money from CC companies (a rarity in this day and age).

I scan through the list from top to bottom until I find a card that I can hit the spend and helps fulfill my travel goals. I prefer Chase and Capital One cards over others. Because AMEX has a one type of card per lifetime rule (as in your entire life), I don’t qualify for many AMEX cards anymore*. And most bank cards allow for flexible transfer of points to other airlines and hotels when you need it.

But for example - if you’re the person that wants to maximize the amount of points that you’re earning and open something like 20 cards a year - then you’re going to have to toe a trickier line for not only making spend on each card, but also getting approved for the very next card and making sure there are no conflicts like the 5/24 rule or the 2/30 or 2/90 rule that banks will arbitrary enact to PREVENT hardcore churners.

But if you’re more of the person that wants to fly business class once or twice a year that you go on an international trip, then figuring out that next card will be much easier. Ideally - you’re choosing to select airlines that frequent your home airport or the cards that have an ability to transfer to those airlines (more on that later).

Tips to getting approved for CC:

• AMEX usually requires a higher than normal credit score (>700)

• Banks that you have a previous relationship with (checking account, existing credit card) are more likely to approve you.

• If you don’t get automatically approved - you can call them afterwards and they’ll usually approve it after asking a few more questions

• Business cards can be easily opened through sole proprietorships and entering in your SSN with no proof of an actual business. I usually open up business cards to avoid 5/24.

Each credit card has a minimum threshold of spending requirements and time to earn the points. Be realistic if you can make this threshold in spending. Estimate how much you spend every year to make this calculation.

For example → take this offer from Capital One Venture of 75K points if you spend $4K in three months. If you regularly spend >$24K/year on your credit card, then you can make this because $24K/4 (3 months) = $6K. But if you only spend $12K/year - then this will be much harder.

What some people do is front-load their spending on their credit card if they have a trip they need to book, a large health expense, etc…

Redeeming Points

I’ve measured how much I travel every year and essentially opened enough cards to subsidize the required amount.

I have a very simple way of making sure I’m not over-indulging myself and scanning Reddit forums posts on how to best optimize different cashback scenarios while also maximizing my rewards gained. And it’s simply creating a system that works for me.

The easiest way is to use seats.aero and rooms.aero or any one of these crazy number of hotel / airline booking portals that now exist for booking reward travel. Almost none of them existed 5 years ago and somehow in the last two years, a ton now exist.

Now if I am inspired to go somewhere - I’ll use seats.aero and look for flights. I have a general sense in my head if I have points for XYZ airlines from my spreadsheet, but if you want this easier you can use AwardWallet and it’ll give you a dashboard of all your available points from different airlines and hotels.

If I want to maximize, I’ll look at how much the flight costs on Google Flights, and then do some back of the napkin math to see if the points are a better redemption. For example, this week Cindy and I booked a one way economy flight to Ho Chi Minh City for 50,000 points + $168 in taxes and fees on Virgin Atlantic. On Google Flights this same flight cost $900. Because points are generally redeemed 1 point = 1 cent for cashback, this was a decent good deal ($668 vs $900).

But wait - there’s more! Chase Ultimate Rewards (Chase points) has a 40% bonus if you transfer Chase points into Virgin Atlantic. And so we essentially transferred 36K points (36K * 1.4 = 50K) into Virgin Atlantic, which made our deal even better ($528 vs $900).

If this is making your head spin - that’s okay! Redeeming points is an art form and there are even companies that you can pay $200 to find good deals like business class flights given what points you have.

Most people say you should not hoard points because they are subject to inflation just like money is. Different brands can dilute the value of their points whenever they want. Ideally try to spend your points as quickly as possible, and maybe it’ll even incentivize you to travel more.

How to Avoid Going Insane with 10+ Open Credit Cards to Manage

Here’s how it works.

I use a personal to-do list system. On that to-do list, once a month is a task that says “Churning Action Items”. In it - I have to do three things:

• Check which CCs I need to cancel with the annual fee renewing soon (and which benefits I need to use before I cancel them).

• Check if I’ve hit spend on my existing card that I’m churning.

• If I’ve hit spend or I’m close to it - figure out which card that I should open next.

That’s all it is and it’s really easy. I cancel cards with annual fees unless the benefits severely outweigh the card itself. Also by cancelling the card, you are usually then able to re-open the card if it’s 24 months after the start date (except for AMEX). So canceling cards is a good idea. It takes probably 10 minutes to call customer support, wait for them to ask why you’re canceling, and then go ahead with the cancellation.

I also manage all of my credit cards in a custom Airtable spreadsheet you can access…

But first - if you’re not a paying subscriber and would like to support me by getting your first awesome credit card - you can use my referral here to open a Chase Ink Business card. Right now they’re offering crazy deals (90K to 100K points = $1000+). And again, you can open it without a business.