Image courtesy of Pixabay
I wonder why my back hurts?
Credit card churning is a dynamic game, a hobby that sees rule changes both formal and informal, all with the promise of doing it just a bit better than with cash. It hits at the very essence of frugality; let's get more value for the cost.
And even with the credit card rewards, it's sign up bonuses that really bring the big bucks. That's why it's called "churning" and not "get cards with good rewards to hold on to forever." (Plus, that would be a really long name for the hobby, and not very creative.) So how much can one actually gain in a given year?
Results will obviously depend on current offerings and the speed at which you apply for cards (called velocity). Assuming you're a conservative churner though, here's an example of how much can be gained in a year.
A Year of Bonuses
The following plan might be typical of a Chase-focused churner, looking to get a new card every 3 months. This setup takes advantage of business cards, which offer some of the most lucrative bonuses at the time of this writing. If you need more information about setting up and applying for a business card, see my review of the Chase Ink Business Preferred.
Timeline (values updated October 2018)
In the 12 months described above, this churner earns 280,000 Ultimate Rewards Points and 60,000 American Airlines miles. The cost to do so was $735, but travel credits offset this by $600.
Value of the Points
Now that you have the points, how can you go about using them? There are several ways, and which one you choose depends on your ultimate goals. Let's look at some examples:
This churner loves the idea of good old fashioned cash, and doesn't want to pay anything in the short-term. They are willing to accept a lower redemption rate to make it happen. Plan of attack? Turn Chase Ultimate Rewards into cash.
The Part-Time Traveler
This churner is all about travel redemption, but only on scheduled vacations. They are willing to sit on points for a while until they can be used effectively. Plan of attack? Use American Airlines miles for a flight and Chase Ultimate Rewards for hotels, additional flights, activities, or any other travel in the next few years.
The Frugal Traveler
This churner is obsessed with value. They look at what gets them the most bang for the buck, freely using Ultimate Rewards or American Airlines miles as needed. They will gladly transfer points to partner sites (hotel and airlines) if they get a better redemption.
Sign-up bonuses change all the time and redemption partners change, but an adept churner can add several thousand dollars to their travel plans (or their bank account) each year. The more flexible you can be, the better options exist.
If you want to stay up to date on all the travel hacking news, subscribe to the Frugal Firefly newsletter!
Or, if you're ready to sign up for the cards I mention, head on over to our Travel Cards page.