Well, I’ve been asked by multiple people to write about this, so here goes. Also, if you’re going to get a card, please use a referral link if possible :) Thanks!
What is churning?
To put it simply, churning is opening up new credit cards to take advantage of the sign-up bonuses.
Why does it make sense: A Cost/Benefit Analysis
I’ll start with a simple example to illustrate my point. Most people have one of the cards that gives them 1-3% cash back. For every 100$ you spend here, you get up to 3$ back.
However, “churning” means that you would get a new card just for the sign-up bonus. For example, the Chase Sapphire Reserve gives 60,000 points after spending $4,000 in the first 3 months of getting the card. This 60,000 points can be used as 725$ (when redeemed via Chase’s travel portal to purchase flights) or 600$ cash. This means that, for your 4,000$, instead of getting 120$ back (3% of 4,000), you actually get 600$ pure cash or 725$ towards travel. That’s a > 15% return on the 4,000$ spend.
There are many other ways you can use these points to get even more than a minimum of 600$ value from them, which I will go over later. Ex. you can book a one way business class flight from SFO to Hong Kong for 70,000 points. That’s a $3,000 plane ticket for a measly 6$ and 70,000 points and (which you almost get from the sapphire preferred sign-up bonus).
BUT MY CREDIT SCORE???
Your credit score will drop minimally (3-4 points per inquiry). Also, if you have a very long credit history without getting new credit, your score may also receive a minor drop. However, your score will go up because you will have a higher credit line, decreasing credit utilization. In other words, unless you’re a stickler for a few credit score points, it largely does not affect you too much. DO NOT SPEND MORE THAN YOU CAN PAY OFF EVERY MONTH AND YOU WILL BE FINE.
okay i’m sold, but there are so many cards!!! WHAT DO I GET FIRST?
Order matters.
Let’s get into the juicy aspects of churning. Below, I’ll speak to a couple of cards that I always keep around, even after the annual fee hits and I’ve already got the bonus. Then, I’ll go into a few of the major banks that offer these rewards.
My keepers:
Chase Sapphire Reserve
Cost: 450$ Annual Fee
Sign up bonus: Currently 50,000 Chase points for 4,000$ spend in 3 months (I got it when it was 100,000)
Notable perks: No foreign transaction fees, travel insurance, Priority Pass, 300$ Annual travel credit, 1.5x on redemption for travel via Chase portal, ability to transfer to any of Chase’s reward partners (Hyatt, United, Singapore … just to name a few), 3x points on travel, dining, and etc.
Verdict: This is a card I’ll always keep. The priority pass I use a bunch for lounges throughout the world. 300$ annual travel credit applies to anything travel related, including flights, taxis, ubers, hotels, airbnb, etc. (Therefore, it’s basically 300$ cash). The ability to transfer to other partners is invaluable in redeeming award bookings from airlines. Finally, the 1.5x on point value (if you have 60,000 points, they’re worth 900$ instead of 600$) is really great for travel. All of these perks makes it worth the modest 150$ annual fee (after the 300$ travel credit is applied).
Chase World of Hyatt Credit Card
Referral Link: https://www.referyourchasecard.com/205a/LWTDO91SWX
Cost: 95$ Annual Fee
Sign up bonus: 50,000 points for 6,000$ spend in 6 months.
Notable Perks: Discoverist Status at Hyatt (which comes with its own perks) and the free annual Category 1-4 night every year upon card annual fee renewal.
Verdict: I keep this solely because of the status at Hyatt, which is my favorite hotel chain, is really great. Also, a Category 4 free night can be easily over 200$ in value.
Chase United MileagePlus
Referral Link: https://www.referyourchasecard.com/217a/NI81PG2B6S
Cost: 0$ first year, then 95$ Annual Fee
Sign up bonus: 40,000 points for 2,000$ spend in 3 months. (This is sometimes 50,000-60,000 so wait for it to go back up)
Notable Perks: Priority boarding, free checked bag (or carry-on if you want for economy basic), and 2 lounge passes per year.
Verdict: I keep this solely because you get a free checked bag (50$ value) if you fly United. I fly basic economy domestically (which doesn’t allow carry-on’s or checked bags), so if i take advantage of this twice, it covers the annual fee. Also, priority boarding is nice and the 2 free lounge passes per year (you can sell these for 20$ each or so)
One of the Marriott/SPG variants. (I choose to keep the Business Marriott Bonvoy from Chase and AMEX business marriott)
Referral link: http://refer.amex.us/SCOTTLQxeL?xl=cp19
The one I have is no longer open to new accounts. However, there is a Amex variant that also provides the free night up to 35,000 points per year. The reason I keep this is the same as Hyatt’s.
Major Banks:
REMEMBER ORDER MATTERS. START WITH CHASE.
Chase
We’re starting with Chase, the bank that’s historically had some of the best bonuses. Their points are very versatile, and they have partnerships with many big airlines and hotels. When it comes to Chase, there’s a rule known as 5/24.
5/24 means that Chase will only approve you for a card if you have less than 5 card openings in the past 24 months, REGARDLESS of bank affiliation. Only personal cards count towards this limit. Thus, you should always start with Chase cards. Chase business cards (or any business cards for that matter) do not count towards 5/24; however, they will not be approved AFTER 5/24. Therefore, get them before you hit 5/24!
Chase Ultimate Reward Points
Sapphire Preferred OR Sapphire Reserve (Always have one of these or the Ink Preferred)
The Reserve I have detailed above. Basically, the preferred is a cheaper annual fee, 60,000 points for sign up instead of 50,000 points, but lacks a majority of the other travel benefits. Get this if you travel less. Your points will also be worth 1.25 instead of 1.5 towards travel. You need one of these (or the preferred) to transfer chase points to other travel partners.
Chase Business Ink Preferred - 80,000 points for 5,000$ spend over 3 months. This is a lot of points, worth 1200$ towards travel or more if you redeem with partners.
Referral Link: https://www.referyourchasecard.com/21a/9YGBHGO67M
Chase Freedom/Unlimited - Don’t apply for these and waste a 5/24. Instead, downgrade an annual fee card to one of these after you’re done with them.
Hotels - These points are different from Chase UR points. They are only used for the brand of hotel itself.
World of Hyatt - I’ve detailed this above.
Marriott Bonvoy Boundless - 75,000 points for 3,000$ spend in 3 months. Free night under 35,000 points every calendar year after renewal of card. 95$ fee.
IHG - 80,000 points for 2,000$ spend
Airplanes - These points are tied only to the airline offering the card.
United Explorer - detailed above
Business United Explorer - 50,000 points for 3,000$ spend
Southwest Cards - a lot of variants (look into these if you fly southwest often or want a companion pass)
British Airways
American Express
American Express has so many different cards. Since there’s no real limitation to the cards, except for the fact that you may only get each bonus once per lifetime, you can get them all. I’d start off by looking at the ones which have “all time high” bonuses. One special note is the American Express Platinum, which has a 100k bonus available through mailers if you wait long enough, so don’t get the public 60k!
American Express Cards will often have higher bonuses if you go incognito and go to their website. It’ll say something like “Special offer for you”.
Citi
Citi has plenty of cards as well, though I find Citi points to be the least useful. I do like the American Airlines Mastercards for both business and personal.
I’ll write another soon about how I get the best value out of points. Stay tuned! :)