Credit Card Churning Explained: How to Do It and Is It Worth It (2019)

[00:00] What's up you guys? It's Matt here. So for this video, I actually wanted to talk about credit card churning. This is something that a lot of people are interested in, and especially since credit card bonuses are going to be going away soon, that's the way everybody feels.

[00:16] It only makes sense to be able to get the most value out of credit card bonuses that you can. So before I start this video, definitely consider hitting that like button. Also hit that subscribe button because I'm doing a giveaway which I can get into at the end.

[00:29] So you're probably asking yourself what is credit card churning? Well basically what it is is where a credit card company gives you a bonus for spending a certain amount in a short period of time.

[00:41] And if they give you that bonus, you're able to take that bonus, apply it to other offers and then do the same thing. But a lot of people what they like to do is do all of it at once.

[00:53] So this is definitely something that can get you a lot of money, but can also get you in a lot of trouble if you don't do it the right way. So there are a lot of people out there that try and do this, but you need to have a certain amount of money, a certain level of credit score.

[01:07] You need to have a bunch of different things in order to be able to turn credit card bonuses. So there are two big things that you're worried about when it comes to credit card churning. And one would be cash bonuses and another would be points or mile bonuses.

[01:23] Those two, if you can get any type of bonus for spending a certain amount that you might already spend, you can definitely take advantage of those. Cash, I like to see the cash because obviously you're getting that back, you're getting $150, $200 back.

[01:38] However much money they're going to give you for spending a certain amount, you're getting that money back. And you can actually apply that in different areas. If you wanted to take that bonus and put it towards investing, you can. But these are the two areas that you want to look at.

[01:53] So in order to start churning credit cards, you need a certain amount of things. And one would be an excellent credit score. If you have a horrible credit score, you're just going to apply for cards and not get approved for them.

[02:05] So you want to have an amazing credit score. It doesn't have to be the best credit score. Let's say it has to be around 700s because then you could apply for all of the mid-level credit cards. I wouldn't say the higher prestige credit cards, but those don't matter anyways because they have a higher annual fee.

[02:20] But you want to have good credit because this is going to allow you to apply for these cards and ultimately get approved. And if you do have good credit and you get approved for a certain credit line, the credit line is just going to cancel out the inquiry.

[02:34] So that's what you really want to happen and to be a successful churner of credit cards. The next thing is disposable income. And this is something that I don't agree with really because you don't really need disposable income.

[02:47] Obviously, you need income in your household in order to apply for credit cards. But disposable, anything extra, you don't really need that because their lines are credit.

[02:59] Now, if you're using them to spend normally, then you don't need disposable income. You can gain, you know, $500,000 in credit card bonuses by not actually spending any money that you don't normally spend already.

[03:15] Next, you need willingness to research because there are a lot of cards that come out. There are a lot of bonuses out there. There's also a lot of fine print. And I've come to realize this firsthand. If you do have something like an Amix card, sometimes they'll put in, if you get one bonus, you can't get another bonus when you apply for other cards.

[03:34] So that's something you need to look out for. You need to read fine print and understand what you're getting into. Because really, you're just getting into the card for the bonus and you also don't want any other fees associated with it.

[03:47] So you need to be able to research all of the different credit cards and anything you're getting into. Another thing that you need is time and effort, less on the effort and more on time.

[03:59] Because most of these things, you're going to have to spend a certain amount in like three months. So you're going to have to be able to manage that and be able to spend $1,000 in three months, $4,000 in three months, whatever it may be.

[04:11] You're going to need to spend that in a certain time period. You don't really need any effort because it should be effortless. It should be what you normally spend. Now if you have to go outside your comfort zone when it comes to spending, you shouldn't be doing this in the first place.

[04:26] So you do need time, like I said, less on the effort. So what you need to know is how do you turn credit cards effectively? What processes do you need to implement in order to do this?

[04:40] And there are a couple of things I gave you some things that you need. But these are some processes that you need to understand in order to turn credit cards. One would be to understand your monthly deadlines because if you have due dates, if you have multiple credit cards, you have to know when things are due.

[04:56] Because if you miss a payment, you're going to lower your credit score, then you can't apply for any other credit cards that you want to apply for because your credit score dropped by 30 points. Or however many points or however many payments that you missed, you don't know.

[05:09] So always understand when your due dates are, when you need to make a payment because that is essential. Also you need to understand your progress towards minimum spending. A lot of times I'll do this ahead of time and if I need to spend $500, I'll make sure I put certain bills on that credit card that will amount to $500 and probably not anymore.

[05:30] Because if I don't get any other bonuses out of it or any other perks, I'm not going to spend any more on that credit card. So it's going to be $500 and $500 only. But you need to understand it gets more complicated when you have more credit cards.

[05:43] So you need to understand if you have $1000 spending minimum, you need to know exactly what you're going to put on that card in order to reach that $1000 spending minimum. And if you can't reach it, then don't apply for that card.

[05:56] So research has to be done beforehand. Also you want to understand your bonuses, really understand what the bonuses are, what you're getting out of it, what your net profit will be out of the whole situation.

[06:09] Most likely it's going to be a profit because of the fact that you're spending normally. Now if you're spending on jeans and other things that you don't normally spend money on, then that's a different story.

[06:21] It's not in that profit. You need to do that calculation. But understand where your profit targets will be. So some people want to know, will credit churning hurt your credit score? I don't believe it will. It hasn't hurt my credit score because of the fact that you have an inquiry as long as you get approved for the card.

[06:37] If you don't get approved for the card, it will hurt your credit score. So if you apply for a card, you have a hard inquiry, and then you have a credit line if you get approved.

[06:49] The credit line, the increase in credit will raise your credit score eventually, not right away, but it will raise your credit score. The hard inquiry will lower it, but the increase in your credit score will outweigh the hard inquiry.

[07:04] So I don't believe it will if you do it effectively, if you understand what you're going to get approved for, and what you're not going to get approved for. So I answered this question short by saying no, it doesn't affect it, but it depends what type of person you are.

[07:18] If you're a person that's greedy and think, oh, well, you know what? I'm going to get approved for it. I've been approved for every other card. Don't have that mindset because it's going to lower your credit score. You're not going to be approved for it, and it's not going to go in your favor at all.

[07:31] So I know I gave you a lot of information on credit card churning, but this is not a totally complex process. You just need to understand your situation, and what I'm going to do right now is just give you a couple of examples of some cards that have bonuses on them, and maybe what you can do is just jot down a piece of paper, what you can apply these bonuses to.

[07:50] And if you can apply to these cards, start churning right away. If you understand it, if you don't understand it, don't start churning right away, but if you do understand it, get to it because who knows how long these bonuses are going to last.

[08:04] So one example would be the quick silver card, which you would get $150 if you spend $500 in your first three months of having the card. So this is a good card. Obviously $150 for spending $500. I can apply it to my electric bill. I don't know why my electric bill would be that high, but I can apply it to certain things, certain bills in the house, and I'll be able to get $150 by spending normally.

[08:31] Same thing with the Chase Freedom Unlimited card. This one's structured the same as the one before. $150 when you spend $500 in the first three months. Like I said before, you can put it on any bills that can amount to $500 in three months, and you'll be golden.

[08:46] So these next two are structured the same. It's just a higher spending limit. You get $150 when you spend $1000 in your first three months. And the first one is the Amix Cash Magnet, and the other one is the Blue Cash Everyday card.

[09:03] So looking at this list, all of these cards will give you $150, and that's just an extra $600 for spending normally for three months. So if you can find a way to apply for all of these cards at once, you can get an easy $600.

[09:18] So next I want to talk about is it worth it? Is credit card churning actually worth it? And I think that it is. I mean, I gain a profit from it, as long as you do it the right way, just like anything, as long as you do it the right way, it's worth it.

[09:31] If you can make a profit out of something, it's always worth it, in my opinion. So what? So just looking at this situation, you get $600 for spending $3000 in your first three months.

[09:45] And I feel like that's well worth it to get an extra $600 that you can put anywhere that you want. It's well worth it. So I recommend that you get into credit card churning as long as you understand what it is. If you don't understand what it is, then don't get into it.

[10:02] But it's pretty simple to understand. Well, that's my video guys. I just wanted to quickly go over credit card churning with you. Maybe next time I can go over bank account churning, it's pretty much structured the same way. It's just banks are a lot more strict with certain things. So you're going to need to research a little bit more.

[10:18] Hopefully you liked this video. If you do hit that like button, that helps me out tremendously. Also, if you can comment down below, let me know if you're into any other type of churning like bank account churning. Or if you have success with credit card churning, I would like to hear about it. Shoot me a comment down below.

[10:34] Also, if you can hit that subscribe button and notification button so you never miss out on anything that I post. I'm doing a giveaway of two Amazon gift cards when I hit my thousand subscriber mark. So definitely hit that subscribe button to enter the giveaway. But until next time, I'll see you guys later.