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Pros and cons of credit card churning

Updated: Jan 17

Credit card churning can be a very rewarding little side hustle to make some passive income and generate a large number of frequent flyer points.


It can also be a bit risky if I didn't know how to do it. So here are some pros and cons I have found with churning credit cards.


The information I am going to share with you below is what I have experienced from my journey credit card churning and is not financial advice but general in nature and should not be taken as professional advice. So please speak to a professional when making any financial decisions and read my disclaimer.

Person holding a black credit card
I have found that there are many benefits of churning credit cards in Australia


Pros of churning credit cards

  1. The biggest positive that I have found when credit card churning is the signup bonuses that many credit cards offer. These signup bonuses allowed me to collect large amounts of reward points very quickly compared to other methods.

  2. These days it's very hard to get lounge passes as you can no longer purchase them and they are invite only. Unless you are a Qantas Points Club Plus member or of higher status, the only way to receive lounge passes is by invitation only through Qantas. Many credit cards would offer two lounge passes as part of their sign up bonus. This can be very useful if I want lounge passes to relax before a flight. To see which credit cards offer lounge passes click here.

  3. I saw advantages to use credit cards based on my lifestyle and current spending habits. I was able to earn points, cash back, and other benefits on purchases I would’ve made anyway even if I did not have a credit card. Most credit card issuers will have a rewards section in their credit card apps. Here I would find cash back offers or bonus points when purchasing certain items. Many times I would double dip with other rewards to stack my rewards and increase my point accumulation faster.


  1. When I learned how to change my spending habits using credit cards, I was able to start to save money just by spending credit rather than my own savings. This was a great option for me as I have an offset account for my home loan. By keeping my hard earned money in my offset rather than using it for everyday purchases, I was able to offset my interest on my home loan for longer, saving me even more money.

  2. From my experience, credit card churning actually increased my credit score. I was responsibly applying for credit cards and was always approved, paid them off on time and in full, and saw my credit score increase over time. This is because I was displaying trustworthiness with credit and creating a good track record of borrowing money. Churning credit cards giving you a low credit score is one of the biggest myths, in my experience which prevents many people from getting starting.




Cons of churning credit cards

  1. Credit card churning can hurt your credit score. Opening too many credit cards within a short period of time can affect your credit score and signal to future lenders that you are reckless or are a risk to future lending. This is the biggest risk to credit card churning with beginners.

  2. Losing track of which cards you applied for and which cards you already had. This can be detrimental, as you will take out a new credit card and pay the annual fee to never receive your signup rewards. This is because you have held that card in the previous 12 month period or the period the terms and conditions for that card state. This can be avoided if you track your credit card history with a credit card churning spreadsheet. Visit my blog on the mistakes I could have avoided if I started using a spreadsheet sooner.

  3. Your character and spending habits may work against the benefits of credit card churning. The key to successfully churning credit cards is to not change your normal spending habits, especially to reach your minimum spend. Many people see credit cards as free money and stop thinking about their savings as they don't see their savings depleting. Then when it comes time to pay off their credit card they see that they have overspent their budgets. Making unnecessary purchases to meet the minimum spend is also another way of spending more money than you would have, which will cancel out any bonuses received. I cover this more in my 3 top tips for churning credit cards post.

  4. The most common risk among credit card holders is not paying off the credit card on time and incurring an interest fee or late payment fee. This can become very costly, as most credit card companies charge fees of 20% or more per annum for outstanding amounts. This can very quickly spiral out of control. So remember to pay off your card in full every month or statement period not to get caught out.



There are many pros and cons to credit card churning. However, from my journey I have found that if I am organised and don't get too greedy, then I am able to credit card churn with out damaging my credit score and still earn signup bonuses.


Like always, if you have any questions, please comment below or contact me. If you don't want to miss out on any new content, then follow me on Instagram or Reddit for more information about everything to do with credit card churning and point collecting.


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