Are you looking for a way to dramatically reduce your travel expenses and earn frequent flier miles without ever leaving your home town? If you answered yes, then it is time to learn about a new technique called credit card churning. Credit card churning is a modern-day term that was first coined by people who loved to travel using credit card rewards points but who wanted to earn points in a much quicker fashion. While this strategy of accumulating rewards points for flights and travel is not for everyone, those who do it right can collect hundreds of thousands of points for free travel in a matter of a couple of years. Read on, and learn what churning really is and how to try it for yourself.
What is Credit Card Churning?
In the past, churning referred to taking advantage of a bank error where you could actually apply for the same credit card multiple times and receive the sign up bonus each time. Once the banks caught the bank error where they were issuing travel rewards several times each year to their customers, they fixed the error and card users who loved to churn had to discover a new way to make this possible.
The newest form of credit card churning is the practice of applying for several different cards through different carriers so that you can receive miles with your new customer bonuses. According to most of the new terms and conditions on bonuses, you can receive new bonuses from the same carrier after an 18 month waiting period. It is also important that you know the credit card interest rates, terms and conditions, perks and other giveaways to see if the credit card you have is applicable for churning.
How to Implement this Simple Technique
It may sound like a very simply technique to accumulate miles for vacations around the world, but anyone who implements this technique should learn how to maximize it. The more experience you get, the more points and miles that you will ultimately be able to acquire. Being responsible as you try this practice is the key if you want to keep a good credit score while you get rewards.
The first step is to apply for a credit card that features a sign up bonus and that also has other promotional benefits like no annual fee for the first year. Once the year is up, you will cancel the card and then apply for a new version of the card that also offers rewards. As a loyal customer, you may be offered more miles and other credits to entice you to choose their card over competitors.
In order to prevent your credit card churning from impacting your credit, you need to understand what aspects of churning really affect your FICO score. At the end of the day, the only factors that affect your credit are the inquiries when you apply and also your utilization ratio. The inquiries will fall off after a short period of time, and receiving more credit will actually reduce your utilization and in turn improve your score as long as you pay off the balances on the card every month.
If you can be disciplined so that you keep your credit score your top priority, credit card churning could be a great practice that hands you free tickets to travel the world. Use your already good credit to your advantage, pay attention to spending requirements, and apply for a card with a high mile promotion.
Have you ever tried credit card churning?