I’m Going Down the Rabbit Hole of Churning Credit Cards

Months ago, I had read articles about how people were “churning”  credit cards.  What they mean by this is that they’ll sign up for a credit card purely for the bonuses that it provides, then never use the card again.  For instance, a card might give you 50,000 reward points to use at their redemption store if you spend $3,000 in 3 months on that card.  50k points is nothing to really sneeze at, since that could get you about two round-trip, economy tickets to a US destination for most reward programs.

Some people travel the world for next-to-free, by optimizing their reward generation and claiming.  Others, go hardcore and apply for several cards at a time, using a technique called “manufactured spending” in order to meet their minimum spend criteria.

Taking a look at one new card, the Chase Sapphire Reserve, you’ll get 100,000 points for meeting the minimum spend.  With a value of 1.5cpp (cents per point), that’s $1,500 worth of travel.

Typically, I’d be against all credit cards.  I mean, that’s what got me into a huge mess when I was younger.  It took me years just to get a rewards card that had 6% cash-back (up to $6,000/yr) on groceries.  Why did I get it?  It just made sense.  I was going to spend the money anyway, so I might as well get 6% off.  I also set up the credit card to pay its balance off in full every month, automatically.  I did the same with my Amazon card (3% cash-back at Amazon), and haven’t looked back.

So, why did it take me so long to get into this churning game?  I simply just don’t spend that much money!  On my credit cards combined, I spend about $1,200/mo on average for the past year.  Some months, it’s much, much less.  Really, why would I break my back trying to meet the minimum spend if I wasn’t going to spend that money anyway?  Well, the bonuses can be lucrative.

I don’t travel that much because who wants to spend a few hundred per ticket, plus hotel?  I could vacation nearby in the state park with gas and accomodations at <$50.  If the tickets were free, though?  I’d travel and visit friends a whole hell of a lot more.  So this left me with some questions.

How much of what I’m already spending, that’s not on a credit card, could be put on a credit card?

Actually, not that much.  Ever since I got my cash-back cards, I’ve moved everything I could over to them.  My mortgage and utilities will not allow it.  Third-party services like Serve might possibly work, but I really don’t want to have to go into a whole process every month when I’m trying to pay my bills.  These are things that I don’t really want to mess with.

So, since everything else has moved over, there wasn’t much to look at here.  I would have to find a different area to work on.

What other methods might there be to “spend” on the credit card, without actually spending?

Here, I started to get ideas.

  • If I’m ever out with friends, I can pick up the tab on one of my rewards cards and get paid back in cash.
  • I could have my boyfriend pre-pay me for his student loans, and then have him use an authorized card to pay his student loan bill.  An easy $600-800/mo.  Risky?  Sure.  But, I think it’s worth a test run and I don’t see any problems as long as I get paid first.
  • In fact, I could pay for everything between us, and just get reimbursed.  It’s easily trackable.
  • If I’m ever close to meeting the minimum spend, but need an extra push, I could just buy some gift cards for the grocery store that I visit every week to make my minimum spend for that card, and then use the gift cards when I’m not trying to make a minimum spend on a card.

What minimum spend can I safely shoot for, without straining myself…so I can get my feet wet?

My “base spend,” what I would normally spend without any of this craziness, is about $1,000-1,200/mo.

Adding in being a middleman for student loan payments, and that’s about $1,700-1,900/mo.

Adding in incidentals and friend outings, probably about $1800-2000/mo.

Keep in mind that the increase in spending on the card would be immediately reimbursed to me, and I would simply deposit the reimbursement into my checking account to pay off the rewards card.

So, I could without a doubt apply for a “$3,000 in 3 months” rewards card.  If I wanted to be super ballsy on my first try, I could shoot for more.

Which card should I get?

Obviously, I’m going to be cautious.  But, I can’t lie, I’d like to work the system a little also.  So, I applied for a Chase Sapphire Preferred card (right now, I’m actually not sure if I was approved…but my credit score is over 800).

For 50,000 bonus points (or about two round-trip, economy tickets in the United States)…I am to: spend $4,000 in 3 months.  Also, for an extra 5,000 points, I added my boyfriend as an authorized user to the account…to make it easier to add some reimbursable spending on it.  If I’m ever cutting it close, my plan is to make up the difference with gift cards to my grocery store, since there is no way I won’t use those (and only when needed).

What am I trying to gain here, exactly?

Well, for one, near-free travel.  I have a whole list of places that I want to go and daggonnit, I want to get there as cheaply as possible.  I’d also love to visit friends that have moved far, far away.

I also hope that this is the start to my real-world learning process of becoming a salty, wise credit card churner.  Right now, I’m a little baby neophyte.  Getting to where I can churn multiple rewards cards at the same time while balancing my credit score is where I’d like to end up (not that I care about my credit score that much).  It’s a skill that takes research, a little cunning and spreadsheets…and it sounds right up my alley.

Have you “churned” before?  What has your experience been?

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