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Churning credit cards is a sport of sorts among rewards collectors, allowing some to redeem points to claim hotels and flights for next to nothing. Sounds pretty appealing – but what exactly is churning?

Churning is when you apply for multiple credit cards just to get the big signup bonuses being offered at the time. And since yearly fees are usually waived for new applicants in the first year, you can simply cancel your card before the first year is up to avoid any charges. Rinse and repeat this cycle and it’s easy to earn points fast, hence the term “churning.”

The churning game has become incredibly popular – there are even Reddit subs and Facebook groups dedicated to Canadian credit card churning techniques. But, of course, there are pros and cons to this strategy so make sure you understand all the risks before you start to apply for new cards.

Pros of Churning Credit Cards

You can earn points fast

The main reason why people churn credit cards is that they want to earn points fast. It’s a lot easier to apply for a card that offers 25,000 points just for signing up, than trying to earn points while flying or shopping. For instance, to earn 25,000 Aeroplan points, you would have to take a roundtrip flight from Toronto to Hong Kong – twice! Those flights would run you a minimum of $2,000, whereas churning is “free.”

You can reap other bonuses

Free flights and points aren’t the only rewards that appeal to churners. Certain cards offer immediate travel credits, free hotel stays, gift cards, electronics or appliances just for signing up.

You can complement or capitalize on your current spending habits

It’s advantageous to churn cards based on your lifestyle and current spending habits, so you can earn points, cash back or other benefits on purchases you would’ve made anyway while you have the card.

Some cards offer up to four per cent when spending on groceries and gas, which may be great for parents. Other cards may offer generous travel insurance benefits and no foreign exchange fees, which may be great for jet-setters.

For example, the President’s Choice Financial® MasterCard®, the President’s Choice Financial® World MasterCard® and the President’s Choice Financial® World Elite MasterCard® are great options for grocery rewards. Not only can you earn 10 PC points on every $1 spent, but for a limited time, you can also get a $100 e-gift card and up to 20,000 PC points when you sign up through RATESDOTCA and activate your card. 20,000 points are equal to $20 in groceries!

The President’s Choice Financial® World MasterCard® and President’s Choice Financial® World Elite MasterCard® also earn 20 points and 30 PC points, respectively, per $1 spent at participating grocery stores where President’s Choice® products are sold. PC points can be used towards groceries and any products at participating stores where President’s Choice® products are sold.

Negatives of Churning Credit Cards

It reduces your credit score

This is, without a doubt, the biggest negative when it comes to churning credit cards. Every time you apply for a credit card, a hard inquiry is done into your credit history, which can lower your credit score by five to 10 points. A hard inquiry is mandatory since lenders want to make sure you’re credit worthy before giving you credit. This may not be a big deal for some credit card churners though; as long as you pay off your balance on time and in full every month, your credit score should return to normal within a few months. However, if you plan on applying for a mortgage or a loan in the near future, you shouldn’t have too many recent credit inquiries into your account. Lenders could be scared off by your recent “need” for credit and turn you down for a loan you may actually need.

You may end up spending more if you’re not careful

To maximize on signup bonuses, credit card providers sometimes require you to charge a certain amount to your credit card within a certain time before giving you your bonus. For example, you may be offered 15,000 points for signing up, but only after spending $500 in 30 days. This may not be a big deal for some people, especially if you have no issue with putting your regular day-to-day expenses on your card. But for others, you then run the risk of buying things you never had any intention of buying, strictly to get those reward points.

This can be an easy trap to fall in, so be honest with yourself when applying for a card with this type of requirement. Do you really need to spend $500 in 30 days? Or are you going out of your way to spend $500 in 30 days? And remember, if you end up carrying a balance, no amount of rewards will be worth the interest you’ll need to pay.

The value of your points may change

As time passes, reward programs and redemption requirements continue to change.

For example, airline points used to be incredibly valuable, but some airlines are now notoriously known for adding surcharges when claiming points. So those “free” flights could still potentially cost you a small fortune.

The same applies to non-flight based rewards; redemption tiers can change at any moment, so the value of your points can decrease at any given time. Many companies also have point expiry dates, so unless you’re creative with your activity, you may be forced to use your points earlier than you expected, or potentially lose them.

This is why it’s imperative you understand all the details of the rewards program before signing up. Make sure there are no blackout periods on point redemption, expiry dates, or minimum/maximum on how many points you can use at once. 

Final advice on churning

Credit card companies are well aware of “credit card churning.” So if you cancel a card and immediately try to re-apply, the odds are you’ll be rejected. Generally speaking, you’ll likely need to wait a year before being approved again for a card that you’ve already churned.

Overall, it may appear that there are more negatives than positives, but if you’re responsible with your credit, then churning cards might be worth your while. That being said, remember that no reward is worth going into debt. And if you plan on applying for a mortgage or line of credit any time soon, it’s better to just keep your credit record clean.

This post has been updated.

Barry Choi

Barry Choi is a personal finance and budget travel expert at He has been quoted by media in Canada and the United States including The Financial Post, The Toronto Star, Business Insider, The Globe and Mail, and has appeared on HuffPost Live.

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