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By: AgFed Credit Union

Welcome to AgFed Credit Union's MoneyDig blog! 

Get confident about your personal finances with a number of articles, tips, advice and more.


The Good, the Bad, and the Ugly of Credit Card Churning

 Dec 20, 2021
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The term “credit card churning” refers to the act of repeatedly opening credit card accounts to earn the cash rewards, points, and miles that are awarded as signup bonuses. Then, once you’ve met the minimum requirements to receive your rewards, you close the cards before annual fees come due. While the practice promises quick rewards for cardholders, it also poses significant risks. Here’s what you need to know about credit card churning.


What is Good About Credit Card Churning?

When done correctly, credit card churning can net you quite a few “freebies.” From cashback rewards to airline tickets, hotel accommodations, and more. There are many options available. Some “churners” are able to maximize their efforts to get these freebies throughout the year. However, it requires applying for the right cards that offer huge bonuses on the front end and spending strategically on the back end in order to capitalize on these benefits.


What is Bad About Credit Card Churning?

Most credit cards that offer lucrative upfront offers require that you spend a certain amount on your cards in a specified period of time. The more cards you’re juggling at the moment, the more room that leaves for payments to fall through the cracks and overspending to occur. 

Plus, the practice itself can have a negative impact on your credit in multiple ways, including the following:

  • Red flags for lenders. When you open multiple credit card accounts in a relatively short period of time, lenders fear you may be facing financial trouble.
  • Spending requirements can wreck your credit utilization ratios.
  • Closing cards too quickly after opening them reduces your average account age and lowers your credit score in kind.
  • It’s easy for your overall debt to get out of control when working to meet various bonus or rewards requirements. 
  • Missed or late payments can be disastrous for your credit score.

There are plenty of hefty considerations to keep in mind before engaging in credit card churning. When you do need a loan, possibly for a new car, it could be difficult to obtain financing because of the damage done to your credit.


The Ugly Truth About Credit Card Churning

While the effect of credit card churning on your credit score can be ugly, and it is, what it does to your financial health can cause big problems. It is far too easy to find yourself drowning in debt when you engage in practices, like credit card churning, in an effort to “game the system.”

It is much better and will save you far more money, in the end, to safeguard your good credit rather than try to climb out of the long-term debt struggles this practice can generate.


We’re Here to Help!

While credit card churning may sound good, it can quickly go from bad to ugly. It’s important to remember that credit cards are loans, and each loan can impact your creditworthiness and overall financial health.

If you’re experiencing financial hardships resulting from credit card churning, we’re here to help. Our staff will work with you to consolidate your outstanding debt into a monthly payment you can manage.

Please give us a call at 202-479-2270 or email us at to learn more about the tools we offer to help you manage your debt.

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