Free Perks or Financial Headache? The Truth About Credit Card Churning
By Garrett Johnson
Those welcome bonuses look tempting: a pile of points, extra cashback, maybe even a free flight if you’re a credit card churning pro. If money is tight and you’re already using a credit card, it’s natural to wonder how to get the most from these perks. For some, it feels like a fun game. But like any hobby that starts small, it can quickly get costly and stressful if you treat rewards like free money instead of borrowed cash with strings attached. For instance, if badly managed, someone who opens three cards in a quarter just to earn points for a vacation may end up paying more in interest and fees than the trip itself.
What is Credit Card Churning?
If you’ve never come across the term, you may wonder, “What is credit card churning ?” Credit card churning is signing up for new cards to snag sign-up bonuses—like cash back, points, or free air miles—after hitting minimum spending targets. Many churners then close the card or switch to a no-fee version to dodge annual fees and move to the next deal. For example, a person might spend $3,000 to get a $500 cash back bonus, potentially buying things they didn’t plan on, then close the card and repeat the process with another card. Some people even juggle multiple cards in a single month to maximize rewards, which can quickly turn into a logistical headache and potential missed payments which can spiral out of control quickly.
Benefits of Credit Card Churning – Yes, There Are Some
There are benefits of credit card churning if you play it right. Welcome bonuses can help you rack up points faster than sticking to a single card, and having access to different programs offers flexibility for trips or big purchases. Timing everything to avoid annual fees can maximize rewards. For instance, a hotel bonus card could cover a $1,500 vacation with minimal extra spending. Similarly, using a card with grocery or gas rewards can offset regular monthly expenses in those two categories. Done carefully, churning can be a short-term win, but it takes discipline and attention. Most people would be better off avoiding it as a long-term strategy, and it is not one that we recommend.
The Downsides of Credit Card Churning and Why It Is Risky
You may be asking yourself, “Those benefits sound great, why is credit card churning risky?” There are many downsides of credit card churning to be aware of. For starters, every new application triggers a hard inquiry, which can lower your credit score temporarily. Multiple inquiries signal aggressive credit shopping and can make loans or mortgages more expensive or harder to get. For someone planning a mortgage within a year or two, these inquiries could translate to higher interest rates or even a rejection.
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Credit History and Utilization
Closing older cards to avoid fees shortens your average account age and reduces your total available credit. That can push up your credit utilization ratio, which often hurts your score more than expected. For example, if you close a 10-year-old card with a $10,000 limit while carrying $5,000 in balances on your other cards, your credit utilization would jump from 25% to 50%. Even though you didn’t increase your spending, this higher ratio can lower your credit score and make borrowing more expensive in the future.
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Minimum Spending and Interest Risks
Bonuses often come with spending requirements that encourage extra purchases. People sometimes accelerate planned purchases or even use risky workarounds like cash advances to meet minimums. If you don’t pay balances in full, interest charges can wipe out the reward, turning a bonus into a costly mistake.
Organizational Challenges and Program Changes
Juggling multiple cards requires careful tracking: due dates, bonus categories, statement credits, and cancellation windows. Miss a payment or a redemption deadline, and you could lose rewards while racking up fees. Programs can also change terms or devalue points without notice, reducing the value of rewards you were counting on. Some issuers may even close accounts or remove your points if they suspect unusual activity, making the chase feel a bit like gambling.
Is Credit Card Churning Bad?
The answer to “Is credit card churning bad?” is not black and white. While rewards can add value, chasing bonuses without discipline often ends up costing more than you gain. Sticking to a few reliable cards for everyday spending is a safer, less stressful way to earn perks. For example, using one card for recurring bills and another for grocery or gas rewards allows you to earn without managing multiple applications and deadlines.
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Best Practices for Credit Card Churning in Canada
If you’re going to try chasing the perks, and don’t want to succumb to panic, credit card churning 101 has some best practices in Canada mentioned on various Reddit threads. While we only recommend applying for new credit that you actually need, and using balance transfers to reduce your overall debt load, if you’re going to try it, here’s what to watch out for.
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Start Small and Steady
Focus on one or two cards that align with your regular spending, like groceries or recurring bills, to keep tracking simple and avoid mistakes. Too many cards increases the chance of missed deadlines and fees.
Run the Numbers First
Compare the bonus value with fees and the effort required. Skip any deal where the cost outweighs the benefit. Consider both the time and the potential financial risk.
Treat Cards Like Loans
Pay off balances in full each month. If you carry debt, interest can erase any rewards and turn a “free” perk into a loss.
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Stay Organized
Mark due dates, bonus deadlines, and annual fee reviews in your calendar. Set reminders, use autopay where possible, and track everything in a spreadsheet or method that works for you. The most successful churners aren’t lucky, they just never miss deadlines.
Keep Old Cards Open When It Makes Sense
Long-standing, no-fee cards help your credit history and available credit. Check for retention offers before closing them. However, if an old card tempts overspending or risks fraud, closing it may be better even if your score dips temporarily.
Plan Around Big Borrowing Needs
Avoid credit card churning if you’ll need a mortgage or major loan in the next two to three years. Lenders notice frequent applications, which can affect approvals and interest rates.
The Pros and Cons of Credit Card Churning When You’re Stressed
The pros and cons of credit card churning don’t matter when you’re facing the stress of juggling cash to avoid missing payments. Balance transfers or new cards aren’t solutions for unmanaged debt either. Reach out to us and one of our friendly credit counsellors will help you consider your options – everything from budgeting to debt consolidation or alternatives if you’re not able to repay what you owe. It’s an easier path than opening another card to “fix” the problem, only to find out that borrowing your way out of debt can simply lead to more debt, stress, and a lack of relief.
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Last Updated on November 7, 2025
