Credit Card Travel Hacking: for Mustachians or Sucka Consumers?

fiddy_leavesIt’s a beautiful October morning, and you are taking a stroll along the sidewalk in your neighborhood. Mixed in with the red and orange autumn leaves at your feet, you notice a hundred dollar bill. Do you stop to pick it up?

Most of us would say “Yeah!”, and that makes sense. Autumn mornings are fun and pleasant,  as are the factors of bending down, colorful leaves, and the rewarding feeling of increasing your wealth by a hundred dollars. Then you get the reward of telling the story to others, and maybe even a second reward of doing something unusually generous with the found money.

But what if the bill was buried in some mud with just a corner poking out? What if you had to climb a tree to get it? How much would you reduce your effort if it were only a $50, $20, or $1.00 bill? How would all these factors change if you were desperate for money, or financially independent with more money than you could possibly spend?

These are the silly questions I spring upon myself when making decisions about money these days, and they come up in the context of credit card hacking (also known as travel hacking or credit card churning) as well.

What do Credit Cards have to do with Hundred Dollar Bills in Autumn Leaves?

Until a few years ago, I thought credit cards were just a slightly irrational but necessary byproduct of our modern financial system. Retailers accept them universally without extra charge. Online shopping is safe and convenient. We all get nicely summarized tracking of our spending and a small percentage of cash back each month. In exchange, we all pay about 3% more for everything, and those foolish enough to leave their monthly bills unpaid lose a much larger amount to high interest rates and other charges.

But then an arms race developed, and certain credit cards started offering incentives of  $500 or more just for signing up. I diligently tried one of them out and found it worked just as advertised, and since then I have repeated the trick on an annual basis. But meanwhile others have gone much further, making me look quite lazy in the process. With moderate effort, some of these people collect over $10,000 in annual profits from the activity, for what seems like about a week of total work distributed throughout the year.

For those interested in going further, I figured we could meet a few of them and learn their tricks. With that knowledge in mind we can decide how many hundreds are appropriate to scoop up ourselves.

Meet the Wealthy, Frugal Woman with a Dozen Credit Cards

clinkAt an event called Camp Mustache, MMM readers and other friends gathered for a weekend to share knowledge on topics of interest to our type of people: Real estate investing, home brewing, advanced bike maintenance, and travel hacking with credit cards were just some of them.

I stopped in on the hacking one and overheard the phrase, “So when I’m setting things up for my next round of card applications”, and I knew I had to sit down and listen in.

The speaker was Marla, a woman who I knew to be financially independent and retired in her 40s, creative, entrepreneurial, and a hell of a lot of fun to hang out with. But she also enjoyed pulling the various levers of the credit card system to extract well over $10,000 per year of cash and mostly-free travel. From her I learned the key to making it fun is to make it efficient:

  • Set aside one morning per quarter  to apply to 4-8 strategic cards
  • Keep track of everything in a spreadsheet to ensure that all necessary hoops are jumped through to collect each reward.
  • The net pay rate for the simple bookkeeping involved is about $250 per hour.


The Young Entrepreneur Who Deals a Mean Deck of Rewards

Earlier this year I met Greg, a 24-year-old who runs his own successful Silicon Valley technology camp for kids, teaches snowboarding in Colorado in the winters, and will quite enthusiastically sleep in the back of his 2007 Honda Fit at temperatures far, far below freezing in a high mountain valley if it gives him more convenient access to the slopes. He whipped out a well-organized flipbook of glistening rewards cards.

“Is it really worth your time to keep track of so many credit cards? Isn’t that like a binder full of ticking time bombs?”, I asked.

“Not really”, he said, and he wrote a whole article for me on the subject. I have summarized it in the box below:

Last November, I flew from Rome, Italy to Jakarta, Indonesia for $66.70. My friends and family were shocked at how little I spent, and were even more shocked to find out that my flight from Jakarta to San Francisco was only $42.50, and my night in an executive suite at the 5-star Marriott Grand Flora Hotel in Rome was only $8. But how else was a Mustachian to travel? Certainly NOT by spending thousands of dollars to fly through the air in an aluminum tube towards a landing strip in the shape of Mr. Money Mustache’s fist.”

Here are some examples of how far you can go with just a couple of churns:

Chase Sapphire Preferred – 40,000 bonus points after $3,000 spending in 3 months
Option 1: A one-way flight to Amsterdam on United (30,000 points), plus $100 cash (10,000 points)
Option 2: A round-trip flight to Mexico on United (35,000 points), plus $50 cash (5,000 points)
Option 3: $400 cash (40,000 points)

American Express Business Gold – 50,000 bonus points after $5,000 spending in 3 months
Option 1: A round-trip flight to Trinidad and Tobago on Delta (35,000 points), plus a night at Hyatt Regency Trinidad (15,000 points)
Option 2: A 3-day lift ticket at Breckenridge (27,000 points), plus 3 days of snowboard rental (15,000 points), plus $48 in statement credits (7968 points)
Option 3: $301 in statement credits (49,966 points)

Churning exists because credit card companies make more money off of non-Mustachians racking up huge bills than they lose from more financially savvy folk who simply move their normal spending to a new, high-bonus credit card every so often.

The Process:

  • Be sure to keep track of your spending and accounts using an online tool like mint.com or Personal Capital.
  • Don’t even get mixed up in advanced use of credit cards if you still have a credit card Debt Emergency to clear up.
  • Monitor your credit score quarterly with a free service like Credit Karma or Credit Sesame .
  • It’s best to wait 3 months or more between card application rounds to lower the impact of the hard credit inquiries on your score.
  • Before even activating a card, I call customer service to verify the bonus and the annual fee, since it’s very easy to apply for the right card with the wrong URL and get no bonus at all.
  • Hardcore churners perform “manufactured spending” to meet spending requirements of multiple cards well over their normal monthly spending (beyond the scope of this short article and not recommended by MMM, but you can look it up. It involves things like gift cards and Amazon Payments).
  • Keep everything in a spreadsheet including dates, actions, and requirements. Use Google Calendar to serve up reminders for yourself.
  • If you aren’t planning on any travel, you’re probably best off sticking to cards with points that can be redeemed for cash. In many cases, 10,000 points equals $100 cash
  • But if you are planning on travelling, your points are usually most valuable when used for international travel, where they are often worth over $200 per 10,000 points.


Don’t let yourself get caught up in thinking about the number of dollars “saved” on travel.  Instead, ask a friend to give you a nice slap in the face when your eyes start glazing over, so that you can come back to reality and consider the true value and the true cost of your rewards travel, rather than what’s marketed to you. Think about this as you’re deciding how to redeem your rewards. Some airlines, like British Airways and Delta, like to tack on huge surcharges in the name of fuel and taxes. Exercise your own Mustachian Due Diligence when making your travel plans to find similar flights without the insane surcharges. If your international rewards flight costs more than $200, you’re doing it wrong.

A Cardiologist, Father … and Travel Hacker?

alexiIn Portland Oregon I met Alexi, a physician by day and a father of three, and free travel enthusiast when it’s time for a break. He also writes a blog called “Miles Dividend, MD“.

Alexi became a card hacker by necessity, since he married a woman with roots in Japan and they wanted to keep their kids connected with the rich heritage of her family who still lives there. Although I find it hard to imagine free time being a part of such a life, Mr. Dividend does it well with his analytical and efficient methods, and he had the following wisdom to offer.

Why is rewards card hacking a Mustachian pursuit?

  1. Because travel is expensive: In my case we previously spent over $16,000 in travel a year. Now we spend less than $1000.
  2. Because figuring out a new system is good for your mind, and it opens up more new ideas. As an example, I wrote here about a strategy to use nothing but the miles game as “springy debt” in order to replace (A.k.a. allow you to invest) your emergency fund.

The point is not that this is a wise strategy. (I don’t think it is.) The point is that playing the miles game gives you skills that allow you to access capital in clever ways. Which is a very useful skill set to have when pursuing early retirement.

Other notes:

  • Not for Debtors: The only way the miles game is even remotely worth it is if you pay off all of your Credit card bills in full every month and never pay a dime of Credit card interest.
  • Good Credit Score Required: In order to score the big bonus credit cards, you generally need a score of at least 700.
  • Not Detrimental to your Score: Surprisingly, in the long run, using multiple cards properly can actually help your score. Despite this, you will often see a temporary 2 to 7 point drop in your credit score for each hard credit check that accompanies each card application.
  • Watch it if you have an upcoming big purchase If you are in the market for a home, securing a low interest rate loan should be your first priority. The miles game is simply not worth having to pay an extra point or two of interest on a 30 year home loan.
  • Use travel hacking as a way to spend less on travel, not a way to travel more on the cheap. Investing the difference (instead of just spending it on first class seats) can cut years or even a decade off of your journey to financial independence.

Piecing together your strategy is not unlike a giant puzzle. It is a lot of fun, and really opens up your world to new and interesting possibilities.

Simply put, the miles game is happiness inducing.


Meet Brandon Cronan, Your New MMM Card Curator

Brandon Cronan, rewards card guru

Brandon Cronan, rewards card guru

Brandon was actually the founder and instructor of the credit cards workshop at Camp ‘Stash. Watching him present and share his deal finding prowess, I saw his enthusiasm spreading to the audience despite our best attempts to be appropriately scornful of the credit card industry in general.

Brandon and I have kept in touch since then, and I decided that the best way to benefit from his skill would be to share it with you. Although I can plainly see the benefits of credit card mastery, my own attempt at a credit cards page was unsatisfactory. The card companies would change their offers regularly, representatives would ask me to update my page, I would generally ignore their requests and continue building parts of my house, and they would kick me out of the program. With Brandon’s help, we have re-qualified this blog to link to American Express and other top-tier cards, and he has signed up to be our in-house expert on the topic on an ongoing basis.

Bringing it back to the leafy sidewalks of my own town, I do still stop to pick up a hundred every now and then. Sometimes they are within easy reach, and sometimes they take a bit more work. But whenever there is effort, there is also the opportunity for learning, so as long as it doesn’t involve compromising my own values, I’ll happily continue to harvest and may see you out there.

You can keep tabs on Brandon and his strategies at the new MMM Credit Cards page. I’ve even enabled the comments section for that page so anyone can ask specific questions and share knowledge. He also writes occasionally at his blog called Life Reengineered.


Many thanks to the enthusiasts above for sharing their expertise on the subject, since it greatly exceeds my own, and people keep asking me about travel hacking. If you’ve had success in this area, please share your own best cards, tips, and experiences in the comments.

  • Mr. Frugalwoods October 13, 2014, 10:04 am

    In recent years, when buying real estate, I’ve talked to plenty of mortgage brokers who highly advised AGAINST churning cards.

    While they all acknowledged that careful churning is in reality harmless… they did say that anything that makes the underwriting department take a second look at your application is a risk. Sure you can explain it (and a good broker will help you write a letter explaining the tons of cards you’ve had) but it’s added hassle and uncertainty.

    Since we’re in the market for more property in the next couple of years, I’m forgoing the gains from churning in order to keep my borrowing options fully open.

    Anyone who churns a lot get a mortgage recently? Any problems in reality? Are my brokers blowing smoke ? :-)

    • JM October 13, 2014, 10:16 am

      I’ll add my anecdote. I’m a fairly aggressive churner (20+ cards in each of the last 3 years) and have had no problems getting a mortgage recently for several investment properties. Yes they’ll ask about recent inquiries, but a simple explanation is all that’s required to put them at ease. Is it added “hassle?” Sure, but so is applying for, meeting spending thresholds, and keeping track of fees on all my cards. The point is that the rewards far outweigh the hassle. Added “uncertainty?” I don’t think so. I can’t imagine a situation where an underwriter would deny an application simply due to prior inquiries if the other aspects of your credit score and credit file were in good shape. Keep in mind inquiries are a very small component of your score. Utilization and absence of marks are far more important.

      One thing to definitely keep in mind if you are churning and manufactured spending is to make sure your statements do not close with large balances on them, even if you plan to pay in full by the due date. This can really have a negative impact on your score and cause you to receive suboptimal loan terms come mortgage application time. The trick here is to pay off the balance before the statement closes (i.e., mid-cycle) so that when the CC company reports the statement balance to the credit bureaus, it’s not a large percentage of your credit available on that card (which is viewed as a big risk by lenders).

      There’s always a bit of a disconnect between the brokers/originators and the underwriters in terms of knowledge of the underwriting process. I often hear brokers/originators make claims that I know are factually incorrect, but it’s not always easy to parse the information since you can’t have direct access to the underwriters.

      • Mr. Frugalwoods October 13, 2014, 11:34 am

        That’s super interesting, thanks! I’d never heard the advice about paying off a card mid-cycle.

        Do you know if there’s a minimum length of open credit that underwriters like to see before canceling a card? Put another way, is there any reason to keep a card open after getting the bonus if you aren’t going to be using it on a regular basis?

        • JM October 13, 2014, 11:51 am

          Cancelling your cards is bad for your score for two reasons: 1) it reduces your available credit (thereby increasing your utilization) and 2) it reduces the average age of accounts on your credit file. It’s almost always better to keep an unused card (or if it has an annual fee, downgrade to a no annual fee card) rather than close it, with few exceptions that are for advanced churners only.

          I’m not sure if mortgage underwriters would care beyond the general effect that having young accounts has on your credit file (lowers the average age of accounts) but I know some credit card issuers definitely do not like to see cards closed a short amount of time after clearing the sign-up bonus.

          • GregK October 17, 2014, 10:02 am

            Hey thanks for sharing. This is all really interesting. I have a couple of questions.

            Why would cancelling a 3-month-old credit card reduce the average age of your accounts? Wouldn’t it do just the opposite? I certainly understand not closing long-held accounts.

            Also, does this mean you have 60+ OPEN credit cards??

            Thanks again!

            • Chris October 23, 2014, 11:03 am

              A 3-month old account is just that; 3 months old. If it’s cancelled, it will always pull down the age of older accounts when they’re all averaged together. There’s rarely a reason to close a card after only 3 months. …assuming it’s a rewards card that you just earned the initial bonus on, just keep it open for the fee-free year one before closing. At least then you’ll get 12 months age out of it.

              • 4TheBi$cuit February 13, 2017, 4:10 pm

                Wait, so are you saying that a closed account is still used in the calculations for average age of account?

      • pope October 13, 2014, 2:42 pm

        Wow thanks for the tip on paying down the balance BEFORE the statement closes. I did not know that actually effects things.

        • Chris October 23, 2014, 11:04 am

          I manufacture a lot of spend on some of my cards, and let $9K post to accounts that were $0 the month before, resulting in a 40+ point loss on my credit score. It will rebound next month so nothing to fret about but a good data point!

      • Elyse October 14, 2014, 7:41 am

        Just a note about paying it early…

        It is good to have a low amount hit the statement, but having no amount hit the statement is way worse than a large amount. It is best to be at 10-30% utilization. Leave about that much on at the end of the reporting cycle.

        General Note: We are talking about the statement, not about owing interest. Never let it accumulate interest.

        • Steve October 22, 2014, 12:51 pm

          Hi, hope I’m not too late for this thread. If 10-30% is the goal, is it bad to stop using the card after the bonus awards are given out? Utilization would be 0% indefinitely in that case.

          • Chris October 23, 2014, 10:59 am

            Utilization a la credit report/score is viewed as a whole – across all of your accounts. So if you have 10 cards, take all balances and all credit lines into account when figuring utilization.

    • Robin October 13, 2014, 10:17 am

      Your brokers aren’t blowing smoke, but every situation is different. I worked in mortgages for seven years before I quit this year, so I’ve seen a lot. If you never keep a balance on these cards, then it’s typically not going to hurt you, but if you have an excessive number of cards with open credit lines, that might throw up a red flag to the underwriter. It could also hurt your score enough to get a higher interest rate. So I think it really depends on how often you open new cards and how many you keep open.

      • Mr. Frugalwoods October 13, 2014, 11:31 am

        Yeah, the “unused available credit” was cited as a potential stumbling block. Though if that’s the only problem it seems like you could just cancel all of the cards before going for the loan. I guess that’s what MMM is advocating for above. Churn all you want, but stop and cancel well before trying to get a loan.

    • Matt October 13, 2014, 10:30 am

      I have done quite a bit of churning – I’m not into the manufactured spend game (too much work, too much risk of changing rules, and it feels dishonest to me), but beyond that, I play the credit card game quite a bit.

      MMM mentions it above in the article, but you certainly do not want to be doing ANY credit card churning in the 6 months prior to applying for a mortgage. If you want to be really careful or your credit is not pristine, make that period a year or 2 years.

      My personal experience was that I had applied for some cards in November 2012 (when I started the CC churn game) and February 2013, for a total of something like 4-5 cards. I completely stopped applications after February 2013, and applied for a mortgage in October 2013. I did not carry large balances on the cards, and would never consider doing so, as credit card utilization % is a HUGE part of your credit score (keep balances under 10% of your credit limit to optimize your score). I had no problems at all, my middle score was around 750 or 760, and I got a great rate. Obviously, YMMV, but I wouldn’t be afraid of applying for cards 1 year+ out from getting a loan.

      On a side note, MMM, if Brandon ever gets tired of handling the credit cards page, I’d be glad to pick up the mantle ;)

      • Dividend Growth Investor October 13, 2014, 10:55 am

        I have previously opened bank and brokerage accounts I intended to use, and gotten cash bonuses for them. Closing them out eventually was not an issue.

        I am not sure however how much of a hassle is it to close credit cards. I am afraid if I end up with 20 – 30 cards, and they change the rules on me such as instituting an annual fee, I could end up paying much more than what I earned. I am sure there is a way around of course..

      • Mr. Frugalwoods October 13, 2014, 11:36 am

        Thanks Matt! If you don’t mind me asking, did you cancel your “churn” cards before applying for a loan? I’m not sure if underwriters care if you have a ton of canceled cards in your credit history.

        • Matt October 13, 2014, 12:56 pm

          I’m pretty sure I cancelled one of them shortly before, but others I didn’t. It doesn’t make a huge difference, as far as I know. What they really care about is signing up for new credit shortly before obtaining a loan, as that looks like risky behavior (i.e. it looks like you *need* credit).

          • Mr. Frugalwoods October 13, 2014, 2:17 pm

            Ahh, that makes a ton of sense. Thanks a lot for going into detail, I really appreciate it!

    • James October 13, 2014, 10:31 am

      I’m wondering the same thing. We are saving for an investment property and although this sounds promising I don’t want to risk that opportunity for less expensive travel.

      • JB October 13, 2014, 10:45 am

        Pay cash for the property, no credit problems. If you have the income, your credit won’t matter as much.

    • JohnnyH October 13, 2014, 10:36 am

      I have 27 open lines of credit and 7 inquiries that haven’t expired yet… I have never had any problems securing the best mortgage pre-qualifications. My mint credit score is 745 (excellent).

      Besides, why not just save aggressively and buy a house with cash?

      • Mr. Frugalwoods October 13, 2014, 11:38 am

        Yeah, we are looking at possibly paying cash depending on the circumstances of the property. If it’s a place that would be hard to lend on in the first place… I want to be in a position of using an all cash offer as an advantage.

        That being said, with rates so low I’m not opposed to borrowing cheap money for 30 years and investing instead.

    • Alexandria October 13, 2014, 1:39 pm

      I am a long-term churner and have refinanced more than once during less than ideal “churn times”. It’s never affected my score enough to matter and certainly no mortgage broker ever raised an eyebrow. My impression was they only look at income and FICO. I know they pull credit reports, but mine is of the boring “everything always paid on time” variety, and so they don’t look beyond that. That said, I do not keep all of these credit cards open. I think that creates a lot of potential hassle. & I can see why a mortgage broker would want to know why you have 20 credit cards open at current. (Plus, when you close cards you get annual fees refunded and you can re-apply for the same bonuses again).

      My FICO has mostly always been 800+. I do have 10+ years good credit history (closed). This seems to mean a lot more than the fact I only have 2-4 years of open credit history. Even my current mortgage is only 2 years old and I have never kept any of my old credit cards. I have no other loan types on my credit report. That’s another myth for another day (that you have to have car loans or whatever).

      • Janet October 13, 2014, 3:06 pm

        Alexandria – Am I reading right – you get annual fees refunded when you close a card? Do you request it or is it automatic? I’m in Australia where sign up bonuses are lower and fees higher, so that could be a game changer. It would be risky because the banks could change their minds but I’m more doing it for the game than the $, so as long as I didn’t lose money…

        • Paul October 13, 2014, 10:54 pm

          Sign up fees are (mostly) refunded if done within ~30 days of fees posting in the US. Some companies will refund on pro-rata basis. Honestly, the card churn game only works well in the US.

    • Michelle October 13, 2014, 7:02 pm

      This is definitely something I have been wondering about as well. It seems like most credit card churners say that it doesn’t affect buying a home, and we plan on buying our next home in 1.5 years so I’m not sure what to believe!

    • Justin October 13, 2014, 7:55 pm

      I disagree with the previous commenter. You should NOT pay off the card mid-cycle and you should NOT attempt to prove the card is paid off. Source: I work for one of the largest mortgage lenders in the United States for the past 5+ years, and have underwritten all types and sizes of loans.

      Here’s some things to keep in mind:
      1) All lenders will ask you to explain each inquiry and whether it “resulted in new debt”. The big thing people don’t understand is that if you open a new tradeline, the lender views this as “debt” even if you plan to pay it off immediately, or if you’ve already paid it off. They don’t know what your intentions are, i.e. if you plan to carry a balance or not. New card = New debt.

      2) Why I say don’t pay it off… the lender will need to see a statement on your new card (unless it’s already reporting on credit). If you show them you’ve paid it off and try to qualify with zero, they’ll request your bank statements to show where the money came from to pay off your credit card. That leads to scrutinizing, documenting, and asking about every deposit that isn’t immediately obvious to be payroll. A documentation nightmare.

      3) 99% of people on this site will be able to qualify with the card payment anyway. You only have to qualify with your minimum payment (which clearly nobody on this forum pays anyway), and that’s at most 5% of the balance. Generally 41-43% debt ratio (that’s mortgage + credit report debts + taxes/insurance divided by pre-tax income) is the max ratio in the industry, and I assume most Mustachians are well under that, so a $50 card payment here won’t hurt you.

      4) I see plenty of borrowers with 800+ FICO’s carrying thousands in CC “debt” (though many clearly pay it off each month) and with recent inquiries. If you have an established credit history, a couple of cards with a balance won’t impact you at all. We also give identical pricing if you’re 740 vs. anything above that… many other lenders are the same. Usually the sub-740’s have had a late payment, limited history, or high debt utilization ratios.

      • Andy Shuman October 14, 2014, 8:40 pm

        All the above are the reasons why people shouldn’t do any churning within at least 12 months before applying for a mortgage. I know, some people are more adventurous, but you might lose more than gain if you don’t get the absolute best terms on your loan.

        As to paying off when your statement is cut, people do it to help with the utilization ratio. It only makes sense right before your next churn. Your score will go up when a CC provider reports to the bureaus a low UR, within reason, of course.

    • Money Saving October 14, 2014, 5:35 am

      I think the main issue is just filling out their required forms detailing why you are doing what you’re doing. I think it’s just a small hurdle to jump over for the rewards you’ll get. Overall, I don’t think they would care as long as your credit score remains high.

    • theFIREstarter October 31, 2014, 8:06 am

      I don’t do “churning” as such (the rewards scene in the UK is generally terrible compared to over there) but do use a cashback credit card to eek out that extra 1% back on purchases.

      I recently applied for a mortgage over here and it did have introduce complications, not the fact of churning or cashback, but just having a rolling credit card balance. For example I paid all my solicitor fees and estate agent fees upfront on the card for some “manufactured spending” so then had a ~£5k balance on the card just before the mortgage company had a look at my account!!! This did not go down well even though I told them I was paying the balance in full (in fact I already had done, it seems to take ages for that information to filter through to them).

      Anyway it ended up delaying our application by about a month, which was neither here nor there in the end because we were waiting on other parties in the chain, but it could have been an issue otherwise if others were eager to complete much sooner!

      So what I would recommend that if coming up to a property purchase, if you are in the UK, is to lay off the card purchases in the couple of months leading up to it.

  • Mario October 13, 2014, 10:04 am

    I have yet to discuss it on my blog because I’m very risk averse when it comes to suggesting things to readers, even though a lot of people — and the internet and in real life — ask me about it. I think that there are a lot of people that it could work for. I also think that there are a few people for whom churning could go spectacularly wrong. While I would blanket the posts with disclaimers, I’m still not sure that I’d feel comfortable… It’s something that I’m still working out.

  • George October 13, 2014, 10:15 am

    One question I haven’t seen addressed yet on this topic, what do you do with all these cards after you redeem the points ? You keep them forever, cancel them after one year (so you wouldn’t pay the annual fee) ? If you cancel them, how does that affect your credit score ?

    • Brandon Cronan October 13, 2014, 1:01 pm

      Around the time the fee is due I usually call the credit card company and first ask if they will waive the fee. I’m honest with them and let them know that I am simply trying to avoid paying the fee. This has been successful for me twice so far. If that’s not an option then I ask the credit line be moved to a no-fee card, this has been 100% successful. And lately I’ve actually been closing down a few of my newer credit lines as I’ve realized that having too much available credit vs utilized credit is also detrimental to your credit score. My score is currently at 740.

      • Mark AW October 13, 2014, 1:58 pm

        Have you tried just lowering your limit on cards to get your available credit amount down? I once accidentally applied for 2 cards from Chase at the same time (newbie so didn’t know it mattered which banks issued the cards). I was accepted for one, but rejected for the other. I called the reconsideration hotline and had them split the credit amount I was granted for the first card, say $10k, between the two cards, now $5k each. I have also called to raise my credit limit, but I assume you can call and also have it lowered.

      • Ian Framson December 6, 2014, 3:49 pm

        I signed up for a United Airlines card through Chase in Feb ’14 (35,000 mile bonus on $3K spent in 3 months). The card had a $95 annual fee waived for 1st year. I called to cancel in Nov ’14 since I was reducing my total number of open credit lines. I informed the “retention” rep at Chase that I planned to cancel prior to the 1 year anniversary of the card and asked if they would waive the annual fee. He said no, but he could give me 10,000 miles if I kept the card open. I happily accepted. I asked if the miles could be clawed back if I decided to cancel prior to the 1 year anniversary, he said no. I am an avid churner, but this stay-on incentive bonus rarely happens. For other churners out there, I would recommend you call to cancel 3-4 months prior to the 1 year anniversary (if your card has an annual fee) and ask for incentives to keep the card open. If there are no incentives, perhaps they can downgrade the card to one without an annual fee or waive the fee. Worst case scenario, you cancel the card (after earning the bonus, of course), and move on to the next one. You can always apply for the same card 2 years later, in most cases, and qualify for the bonus again. Happy churning!

  • Tyler Merry October 13, 2014, 10:17 am

    Any one who is interested in more information may want to head to http://www.reddit.com/r/churning

    • Paul Andrew October 14, 2014, 10:24 am

      Reddit churning is subpar and somewhat standoffish in my opinion. I am a big fan of the flyertalk forums and the frequent miler.

  • rdog October 13, 2014, 10:30 am

    I find it hard to believe a person can get to $10k a year in rewards without an example. Any chance someone could attempt to create a fake scenario where this happens. I would like to attempt this but I can’t quite envision the yearly process. Thanks!

    • Mr. Money Mustache October 13, 2014, 11:30 am

      I agree – if one of our gurus in the article has a moment, he/she could do a quick list, like “Quarter 1: get these cards, delivering this value.. Quarter 2: etc..”

      Very simply, you can get about $500 on the top cash-yield cards ($1000 if you happen to need to do international travel and use the card to eliminate this cash cost). This implies working through 10-20 cards in one year. I only do about 2 new cards per year myself (and take $1500 in combined cash/travel savings), but some of the Masters take it much further.

      • Matt October 13, 2014, 1:23 pm

        Some of the math around $10k is probably a bit fuzzy. The Park Hyatt Vendôme in Paris costs €757 ($960) per night, and you can get 2 free nights with one credit card, so many bloggers will say they saved nearly $2,000 with the one card. But if you wouldn’t have really spent $1,000 per night, you didn’t REALLY save $2,000. The same caveat applies with business/first class travel.

        Here’s how I could see someone with a spouse “saving” $14,000 on travel with 4 cards.
        2 United Explorer cards (during increased sign-up bonus promotion): 110,000 United miles
        2 Chase Ink Plus (during increased sign-up bonus promotion): 140,000 points (transferrable to United)

        250,000 United miles is plenty for two “Saver” round trip business class award tickets, which in peak months can run around $7k each. There’s $14k right there, but you didn’t REALLY save that money.

        • Holly October 13, 2014, 1:32 pm

          I agree with you- I’m staying at the Hyatt Park-Vendome in 3 weeks and I would never (EVER!!!) pay $960 for a hotel stay. So, in that sense, I certainly didn’t save that much.

          On the other hand, I did earn almost $2,000 in rewards with the Hyatt card due to that specific redemption.

          • FrugalTravelGal October 17, 2014, 5:38 pm

            We got the Chase Hyatt Visa mainly for the 2 free nights at any Hyatt in the World. We stayed at the Park Hyatt in Sydney, Australia, where the regular room rate was about $900/night. We would never have paid that much for any hotel room, but it was a nice perk. We kept the card one more year and paid the annual fee, but I think that card will soon be replaced by the Barclay Arrival World Elite MasterCard.

        • Matt October 13, 2014, 1:39 pm

          That being said, you can definitely milk some serious savings.

          Here’s an example of how you could save tons of money, if you were already planning on traveling a lot.

          Southwest Companion Pass:
          Q1: Apply for 2 Southwest cards (Chase), get 100,000 Southwest points (plus $4,000 for meeting the minimum spending). Find a way to get 6,000 more and you get the companion pass, which when combined with your 110,000 points comes out to $3,142 worth of Southwest flights if you’re flying with someone else.

          I usually consider hotel cards to save me around $100-$150/night – roughly the amount I would have actually spent on a hotel night plus a little extra for the convenience of a nicer hotel than I might have gotten otherwise. Use the Club Carlson card (US Bank) to its full potential (stay 2 nights, and the second one costs zero points), and the 97,500 points you get from the sign up bonus and minimum spending could get you 6 nights at a Category 3 hotel is easily $600, with some points to spare. This could be done the same quarter as the Southwest cards.

          Q2: The Ink Plus combined with the United MileagePlus card (both Chase, but Ink is a business card, so you can get both), if you get both during promotional high-bonus periods, is enough for 2 round trip coach tickets to Europe with a stopover and open-jaw. We used a slightly different combo of cards, but hit up Germany to visit family, along with Venice and Rome to save $2,500.

          That’s 5 cards so far, and an easy $6,000 without outrageous point valuations. If you and a spouse each sign up for the latter combo, that’s 7 cards and $8,500 for two trips. Add in two Chase Sapphire Preferred cards (Chase) in Q3 or Q4 and redeem points for travel ($1,125 for the two), and you’re close to $10k with 9 cards, and we haven’t even touched Citi or AmEx cards for American Airlines/Delta, or hotel cards like Hilton, Hyatt, and IHG, or cash back rewards cards.

          • Giovanni Garinian October 14, 2014, 2:58 pm

            That sounds very tricky.. .I particularly, don’t enjoy a lot the six diamonds hotels. I mean, if i’m going to travel, i wish to stay most of my time in the city/place/country i’m visiting. Go outside, and explore and find new things, etc. etc.

            I’ve also a paper in my closet written by my aunt in 2012 that says I can have a free hotel night in one of the Fiesta Americana Hotels.

            But really, why i should take care of those things where i can stay in hostels from 10 to 26 euros, that’s an average of 18 Euros. Yes, I’m from México, I bought a Ticket to fly to Madrid with British Airways. (Maybe I could get a discount from churning a CC, but I’m still new to the CC Rewards, I think that rewards only make the annual commision be higher and also the interest rate, so my main goal is to hunt low rates, because in México CC interest rates range from 18% to 88%, and I’m between 25% and 52% with my 5 credit cards. And yes, I owe them and don’t know i will end paying them, cause my basic spending is higher than my income. Still, my credit score is excellent, well, is just clean, i don’t know my score because you have to pay for it. But I always pay on time, and my debt ratio is like 55% , a good number if you say that i can’t handle this debt.

            Well, to the point… a Hostal is a great option, especially if you are young, or travelling alone and with this option is a great place, affordable, with the only thing that you sleep with another 3-8 guests or 24, depend the place and the price, and it could be girls and boys, or only the same gender, but you get to know people in your room, or while in the breakfast time, or in the common areas, almost everybody wants to have a nice time with each other.

            And if you want to sleep alone with your girl or friends, you can ask for private rooms, for a little bit more.

            $960 hotel nights? and $60 beers? No way. Perhaps when i have so much money that i don’t know how or where to spend it, but this, is at the bottom line.

      • Alexi Zemsky October 13, 2014, 3:47 pm

        I would be happy to take up this challenge an write a detailed post on just this.

        But if you never spend money on travel, you won’t save as much.

        Just to illustrate the power of this technique however fr those who do travel, last night I booked 5 business class seats for my family to Japan using 500,000 miles and $300 in fees. I spent another $500 in fees to meet the spending requirements for the Miles used for that trip.

        2 years ago we spent $8000 for 5 economy tickets for the same trip.

        So that’s at least 7k net gained, ignoring the fact that we are flying business class.


        • Rob in Munich October 17, 2014, 4:24 am

          Sigh, wish we had this kind of cards here, I just booked a reward miles with Lufthansa, economy class, the fees alone including emergency exit fee cost 500€ alone, plus another 1100€ for my flight!

          If you want a Lufthansa rewards card you only need to charge a mere 70,000€ to get a free flight!

      • Bill October 24, 2014, 12:21 pm

        I can probably highlight a very recent example. Although I do not have the exact timing down for when I applied to cards to achieve these point totals it is still a valid story:

        Hawaii Honeymoon –
        First Class flight on American Airlines from BOS –> LIH = 75,000 AA Miles
        7 nights to the Grand Hyatt Kauai Grand Club Room = 231,000 Hyatt points
        Free Inter Island Flight on Hawaiian Airlines Kauai –> Maui = 15,000 Hawaiian Miles
        6 nights to Hyatt Regency Maui regular room = 40,000 Hyatt Points + 4 Free night certificates
        First Class flight on United from OGG –> BOS = 80,000 United Miles

        This sounds like a lot and it is. To highlight what it took I applied to:
        1 x 70,000 AA Citi Card – $3,000 spend (Currently 60k) = 70k AA Miles
        2 x 20,000 Chase freedom = 40,000 UR Points
        2 x 50,000 Chase Sapphire Preferred = 100,000 UR Points
        1 x 50,000 Chase Ink = 50,000 UR Points
        2 x 50,000 United Explorer Card = 100,000 United Miles
        1 x 35,000 Hawaiian Airlines Card = 35,000 Hawaiian Miles
        2 x 2 Free Night Certificates Hyatt Card = 4 Free night certificates

        So now I had some of these cards for longer than others. For example we both had the freedom and Ink saved up our balances to cover the remaining miles needed to transfer UR awards to Hyatt Points. You would be surprised how quick 5% back in bills and the specific categories add up. I may also have gotten a few thousand points from referrals for friends signing up for the freedom cards. Most of the cards we applied to right after getting our first mortgage which was exactly 1 year before we got married. Very few of the above cards we actually paid the fee for and there was less than $100 total in taxes and security fees paid for all the booked flights above.

        If you paid for these items the day I booked them it would cost you:
        AA Flights = $2,279 x 2 = $5,548
        Grand Hyatt = $903 x 7 = $6,321
        Hawaiian Airlines = $99 x 2 = $198
        Hyatt Regency Maui = $391 x 6 = $2,346
        United Flight = $1,743 x 2 = $3,486

        Total = $17,899, all resort fees waived and no taxes on hotel rooms.

        Obviously some of these are subjective, would I have ever paid $5,000 for first class flights or $900 a night in Kauai? Probably not. At the same time we had a tip of a lifetime that would have never done without miles. Created 2 weeks of memories in Hawaii that will be with us forever.

        To afford even the cheapest Hawaiian vacation in coach class and staying in budget hotels is still expensive was not even in the cards financially. We just bought a house/ got married and are pretty young to be doing so. With a little planning it can pay off. I also dislike reading comments here that you did not really save money because you did not have to spend the money to travel, etc. Traveling is about creating lasting experiences, sure it does not always need to be in 5 star everything for a trip. I take plenty of budget oriented non point vacations. However I can say points give me the opportunity to give me a situation where a 5 star resort or a budget hostel cost the same, which would you prefer? I am going to want to always choose the luxury travel for free.

        Luxury Travel Independence can basically come at any age, not having to wait for a huge financial stache to have those experiences is a priority and a dream come true for many people.

    • Jacob October 13, 2014, 12:02 pm

      MMM, feel free to remove this link if you deem necessary, but here is my $5,000 example:


      That trip in today’s cost would be just over $5,000 by itself. Add that to the several other flights and hotel stays over the past year, and I’m well over $10,000 in free travel.

      As for a strategy, I keep it simple. I sign up for 2 cards at a time, every 3 months, and my wife and I switch off. I won’t take a bonus worth less than $500 in rewards, and when I redeem, it’s usually closer to $800 per card.

      So that’s 2 x $800 = $1,600 every 3 months x 4 = $6,400 per year, every year.

      Now, if you make that 3 cards every 3 months (which I will be doing starting next month), and you’re darn near $10,000 per year.

      I recommend (as does MMM on his CC page) starting with the Starwood Preferred Guest card and the Chase Sapphire Preferred card as a pair. That’ll easily be free flights and hotel on a week long vacation most anywhere.

      Then from there, the sky is the limit! :)

      • Vickie October 14, 2014, 2:00 pm

        Jacob, how do you achieve the spending needed to get the bonuses? I do not have monthly spending high enough to get the best rewards, and was wondering if you have any tricks. Most of my monthly bills are for the mortgages on my rental properties and I don’t think the banks accept credit cards for the payments. I buy my food at Aldi and they only accept debit cards. Any suggestions?

        • Jacob October 14, 2014, 4:17 pm

          You need $1,000/month in spending for an entry level premium rewards card. I do it by not only putting food and necessities on there, but ALL bills and utilities as well. Plus, just got private insurance, and my STUPID HIGH premium can be paid by credit card as well. SO I’ve got a good $2,000+ per month I can throw at these cards.

          I automate all bills (utilities, cell phone, etc.) so it doesn’t take any extra time. I also save all my billing websites in a folder so I can open them all at once when I need to switch them over to a new card.

          Now, there are tricky ways of paying mortgages and such with a CC, but I’m too lazy to do that :)

        • Stephen January 2, 2015, 6:06 pm

          If you have walmart near you, look into getting American Express Serve or American Express Blue Bird.

          What you do is purchase visa gift cards from the grocery store. They are debit cards – load them onto AMEX Serve/Blue Bird (up to $5000 from walmart, $1500 direct load from CC, and $1500 online debit load = $8,000 a month). Amex Serve has a billpay function where you can pay your mortgage from your monthly load.

          If you have a cash back card with a Grocery store bonus, this will effectively give you quite a bit of cash back just for paying your mortgage.

    • Holly October 13, 2014, 12:16 pm

      My husband and I are going on a $6,200 vacation shortly. We paid $197 for airline taxes and fees. We did this by:
      Signing up for two Citi AAdvantage credit cards and earning 100,000 AA miles
      Signing up for one Starwood Preferred AMEX card and putting about 6 months worth of spending on it
      Signing up for the Chase Hyatt card and earning two free nights.

      We redeemed those rewards for our two flights with cost $2,000 retail. Four nights in London which would cost $600 per night. And two nights in Paris at a Hyatt with a $900 nightly rate.
      All of that equals $6,200

      We also signed up for three separate Spark Cash Business cards this year- all earn 2 points/$1 spent on all purchases plus offered a 50,000 signup bonus after spending $4,500 within 3 months. The signup bonuses alone meant we earned $1,770 in cash-back. I redeemed some of it for stuff for our vacation- such as a train ride from London to Paris and tickets to a few shows.
      In addition those, we’ve used Southwest miles to fly to Mexico, Las Vegas, New Orleans, and Denver this year. Those flights were $350 minumum per ticket round-trip with an easy valuation of $2,800.

      Those are just a few of the cards we’ve had this year. It is extremely easy to get $10,000 in value without much effort if you have a strategy.

    • Brad October 13, 2014, 12:35 pm

      As MMM said, you have to work through at least 10+ credit cards per calendar year to realistically earn $10,000 in value.

      While I hope to get about $1,000 of value out of each card I open, each card at a minimum should get you roughly $500 in value, and that’s if you redeemed it for essentially the “worst” possible option (1 cent per point cash back on Chase Ultimate Rewards would be an example of this).

      My wife and I each open accounts in our names which doubles the available universe of cards, so you could open two Starwood Amex, two Chase Sapphire Preferred, etc. It really isn’t that hard to open and work through the requirements on 10 cards in a year.

      We don’t do anything crazy in our lives — we just go one card at a time and focus all of our spending on that card and then open a new one. So I’ll open an account in my name and add my wife as an authorized user, and when we’re done then Laura will open an account and add me as an authorized user and just bounce back and forth like that.

      If you can find ‘sweet spots’ like using British Airways Avios points on American Airlines and US Airways then you can find amazing ways to get value out of your points. Example: We opened one Chase card that got us 5 round-trip flights from Richmond to NYC using this Avios method that saved us $2,250. These are flights we would have taken to visit family anyway, so this is real savings, not just some phony aspirational travel “savings” that many travel bloggers tout.

      But that isn’t the ‘low hanging fruit’ obviously and takes a little bit of time and effort, but it can be worth it!

      Here are two trips we took this year that will save us nearly $10,000:

      (feel free to remove these links of course MMM)


    • Greg Intermaggio October 14, 2014, 6:15 am

      Hey rdog- I don’t have exact dollar values for you, but here is a summary of the results of my churning over the past year:

      -$100 cash
      -$440 off a normal cost flight
      -A night in the Marriott Grand Flora (5*)
      -Rome > Jakarta
      -Jakarta > San Francisco
      -Denver > San Francisco round-trip
      -Minneapolis > Vienna round-trip
      -Charlotte > Vienna round-trip
      -San Francisco > Vienna one-way
      -Istanbul > Taipei
      -Taipei > San Francisco
      -Another $400 off the taxes/fees associated with the tickets (total taxes for everything combined was somewhere around $600, less this $400)
      -$50 REI gift card

      This was all done through rather casual churning- no more than 3 new cards each 3-month cycle, focusing on the getting the highest sign-up bonuses available each time. Even now, I still have enough points for a one-way anywhere in North America. I could easily see someone who was more serious about it breaching the 10k threshold.

    • Paul Andrew October 14, 2014, 10:29 am

      Using the Hyatt and chase sapphire preferred signup bonus, I was able to book four nights at the Hyatt Zilara all inclusive which goes for around $600 a night. $10k does seem like a high figure but not that high when you start to think about high value redemption and multiple sign-up offers per quarter.

      More detail can be found below.


  • Spoonman October 13, 2014, 10:30 am

    Thanks for the article, this is a topic I’ve been wanting to learn about for a while.

    My big question is this: How many lines of credit can you open before it becomes detrimental to your credit score? Do you manually cancel credit cards on a first-in first-out basis to keep things under control?

    • Matt October 13, 2014, 10:38 am

      I have 22 cards on my credit report now. To give you an idea of the effect: my credit score is lower than it normally is (around 720 now, usually it’s closer to 760), but that’s largely because I’m floating a large balance on a 0% card. (Why pay it off now when I can earn 3% APY in a high-yield checking account?), so my utilization % is not optimal. I also have a lot of applications in the past year, because I went crazy on apps shortly after my mortgage went through a year ago. If I didn’t have the high balance, I think I would be around 740+, so it hasn’t hurt too badly. Holding lots of credit lines is a GOOD thing for your score, as long as you manage them responsibly and don’t have balances on a lot of cards at the same time.

      Generally, if a card has no annual fee, I will not cancel it because it can’t do any harm (as long as you monitor it periodically for potential fraud, which with Mint or Personal Capital is no effort at all), and helps your utilization %.

      For cards with annual fees, I’ll cancel them somewhere between 9-11 months after opening them, except the rare cases where the annual fee is worth paying.

      • JB October 13, 2014, 10:44 am

        It doesn’t do any harm to cancel it either.

      • Dividend Growth Investor October 13, 2014, 10:52 am

        Hi Matt,

        So do you ever close any of those cards? Or do you just keep accumulating 20 – 30 credit cards?

        • Matt October 13, 2014, 11:10 am


          I’ve closed some. Generally, the best sign-up offers are for annual fee cards (because they want to rope you in and hope you never cancel it). I have 5 that I plan on cancelling in the next 3 months or so, but I probably will apply for one or two more cards in ~3 months.

          Technically, it does, especially if you have a high credit limit on the card you cancel. Your utilization % is calcaulated off of (sum of balances) / (sum of credit limits). Cancelling a card with a high credit limit and no balance increases your utilization %, which is 30% of your credit score. Now if you still have a low utilization even after cancelling it, it shouldn’t hurt you much, but it still is a decrease in your score.

      • Cody October 26, 2014, 12:18 am

        Matt– /offtopic but what bank are you using for a 3% APY checking account?

        • Justin November 13, 2014, 3:05 pm

          I would also like to know where you’re getting such a high interest on checking! :)

          • Craig February 19, 2015, 10:15 am

            I use Lake Michigan Credit Union 3% Max Checking. If you don’t live in MI, you have to donate $5 to charity to open an account. To qualify for the 3%, you have to have:
            1. One direct deposit per month
            2. 10 debit purchases per month
            3. Log in to web banking 4 x per month.
            4. Sign up for e-statements.
            So far so good for us!

            • David Robarts July 28, 2015, 12:03 pm

              Requirements 1 and 2 are fairly common to try to limit this to a person’s actual regularly used account (and get their share of transaction fees from merchants); but balancing 10 debit transactions on the checking account with meeting spending requirements on rewards credit cards raises the difficulty level. Requirement 4 is a basic cost saving measure that I imagine no one here would even think twice about. What I can’t figure out is why the bank has requirement 3 – do they have any research showing a benefit to having customers who log into banking weekly vs. customers who long into banking monthly?

              • Dustin Stout January 8, 2016, 3:33 pm

                Consumers credit union, up to 5% return (max 20 K) if you use their credit card.

  • John October 13, 2014, 10:32 am

    This is a scam! There are so many rules. For example: theChase Sapphire Preferred gives the first eat free but after that it is $100 a year. And once you scan the reward you can’t do it again for another 2 years.

    A MMM lifestyle is about simplicity. This is far from a simple life.

    • Marcia October 13, 2014, 12:38 pm

      I have to agree. I think, for me, it just doesn’t make sense to do this. (I feel the same about the CVS coupon game.)

      However, if I were someone who traveled a lot – for example, if my other half was from a foreign country and we traveled overseas frequently, I can see where a few hours of work per year could pay for itself in foreign travel.

      As it is, we fly as a family once every 2 years. I think next year (our next trip), my husband might have enough miles for a couple of free tickets (he travels for business). I, however, will not. I had the chance of an international flight for work that would have put me over the 25k miles, but it never happened.

    • Eric October 13, 2014, 4:09 pm

      I wouldn’t call it a scam, but it does feel oddly Mustachian and non-Mustacian at the same time.

      I take a more traditional approach in just sticking with a single card for all purchases. I don’t get the continual string of sign-up bonuses, but the other benefits apply, and I don’t have to go through all of the gyrations and worrying about credit scores and mortgages and whatnot. That seems like a good middle road.

      Incidentally, I like the Alaska Airlines card. It gives 1:1 miles:dollar on all purchases (3:1 if buying Alaska tickets), plus a $121 companion fare each year, which can easily be worth several hundred dollars. The catch is Alaska doesn’t fly to nearly as many places as the major carriers do, but living in Seattle it works great for us. They say you can redeem miles on Delta, American and elsewhere, though I’ve never done that. You get 25k miles for signing up. There’s an annual fee ($79? something like that).

  • JB October 13, 2014, 10:43 am

    I have done this a few times. have an application for an amex card, we would get $500 in hotel dollars but have to pay $400 for the card.

  • Chris October 13, 2014, 10:48 am

    I think there’s a lot of up front work to get involved in CC churning, and similarly, they can always pull the rug out on some great deal in the future. For me, I use my business credit card (got a chase Ink) for purchases of thrift store items that I plan on re-selling. I just wish most garage sales would also accept credit cards! We got a laptop using credit card rewards just from the initial bonus. I’ll have to re-adjust if the annual fee isn’t worth it next year.

  • LeisureFreak Tommy October 13, 2014, 10:54 am

    Good write-up. I have looked into this myself after hearing about amazing numbers as you detailed.
    100% debt free – CHECK
    Credit Score is an awesome 8XX – CHECK
    House Paid off/not moving – CHECK
    Use Card $3K to $5K in 3 months to get the points — Hmmmmm
    With keeping my mustache intact and my early retired lifestyle budget, I would struggle to use a card to reach the $3k in 3 months spending threshold. I would have to see if I could pay all monthly utilities on the card to do this. I did check and my medical insurance can’t be paid by card so hitting the required spending threshold might be like having to swim through a sewer-retention pond to get that $100 bill in the leaves. I do know how to swim though….
    I do think it would work for me for one quarter a year if I had large purchases planned with timing around the holidays. Definitely something I would consider for the short term to help offset a planned vacation. In the meantime I will just have to stick to the rewards cards I have and be satisfied with the 1% to 3% cash back (2% & 3% limited) they offer. I do see how this could work for people with larger budgets and a cool way to reduce travel cost if you are organized and financially disciplined.

    • Debbie M October 13, 2014, 11:18 am

      I agree. Some of them require only 1,000 in three months. Even that’s a stretch for me. Some of my biggest expenses shouldn’t be paid on a credit card because of the additional fees (property taxes). But I just got one, and tuition on a five-hour class should make it possible.

    • Scott October 13, 2014, 12:57 pm

      This is what he was referring to by “manufactured spending.” You buy a whole bunch of gift cards you can then use at a later date. You get the spending done now, but the buying done later, if that makes sense.

    • Becky October 14, 2014, 11:36 am

      Meeting spending limits would be my problem, too. I wonder if this might be more applicable to small business owners who could charge business expenses. I’m still at the stage of saving a huge portion of my income – I think even charging all my groceries, gas, etc… I wouldn’t make the minimums unless I had some type of large repair bill. As a frugal household of one, I just don’t spend enough!

  • Aldo R October 13, 2014, 10:56 am

    I don’t play the credit card game because I just got out of consumer debt. I think I wouldn’t get into credit card debt because I have been using my credit card without paying interest for over a year now, but I just don’t feel like keeping track of a lot of cards.

    I don’t mind people doing it if they are actually going to spend that money to get the rewards, but I don’t like the whole manufacturing spending because I feel it’s very dishonest… you’re lying and pretty much stealing.

    I don’t know, maybe someday I’ll change my mind, but I’ll stay away from it for now.

  • Kevin October 13, 2014, 11:11 am

    Anyone use the new Citibank Double cash rewards card. No annual fee and 2 percent. return on purchases 1 percent up front then 1 percent when you pay the balance?

    • Al October 13, 2014, 11:42 am

      I just signed up for that card. Should be coming in the mail soon. However, with no sign-up bonuses, it doesn’t seem to be a good candidate for card churning. It’s one of the best cash back cards, that I’ve seen though.

    • JT April 22, 2015, 8:11 pm

      This cannot be used for churning since it has no sign up bonus. Airline and points cards offer a much greater reward in value…I have heard 10%-17% back when you are a guru

  • V October 13, 2014, 11:12 am

    Wondering if any Canadians reading this have suggestions for cards which are worthwhile to do this with in Canada? I looked at the PC World Mastercard, but they won’t make exceptions to the income minimum (which I don’t meet unless my travel reimbursements from work are counted). I haven’t seen others lately with good offers for Canadians.

    • Lynne October 13, 2014, 11:56 am

      I don’t think we have ways to manufacture spending like they do in the States. And while there are some signup bonuses out there, those aren’t nearly as good in Canada either. I think maybe there’s a lot more competition in the American credit card world.

    • beth October 13, 2014, 2:28 pm

      I have been shut out of the best cards Canada has to offer because I make less than the required 62k per year.

      Canadian cards offer nothing as exciting as these American cards. I am stuck with my 1% cash back Visa.

    • Marla October 13, 2014, 3:18 pm

      Yes, (wealthy frugal woman with 12 cards here) best current options in Canada are the Amex cards. They offer very useful transferable points (transfer to loads of airlines or redeem at hotels) and no fee first year. Apply through greatcanadianrebates.ca or get a friend to refer you for extra points. If you’re on the west coast, the Alaska Airlines card is also excellent with 25k miles at sign-up and annual companion certificate.

    • RetiredAt63 October 13, 2014, 4:13 pm

      I would also like to know if other Canadians are doing this. Presently I have a MasterCard that has Air Miles. I am finding it harder to use those air miles for plane travel, and have switched to the rewards side.
      I have found a few cashback cards but haven’t applied for anything yet. Anyone done this? And comments? I just renewed my mortgage so that is not an issue.

      • Lynne October 13, 2014, 6:07 pm

        Amex aside – which does seem to have some good deals but I haven’t bothered with it since many retailers don’t accept it – the Scotia Infinite and MBNA SmartCash cards are probably the best for cash back. Which one is better depends on how much you spend (Scotia has better rewards but also an annual fee, so you have to spend enough to make up for that. They usually have a deal on where you can get the fee waived the first year though.) If you’re going to apply for any new credit cards, take a look at redflagdeals.com first and see what bonuses they’re offering if you go through their link; right now they have a $60 bonus for getting the MBNA card, for example.

        • RetiredAt63 October 13, 2014, 8:26 pm


      • Lee Lau October 15, 2014, 11:01 am

        There’s not as much for canada. Subscribe to this for Canada deals – http://blog.rewardscanada.ca/

        For CC rewards I use BMO’s World Travel Elite but I’ve got enough spending through there for annual fees to be waived (I call in to complain about the fee every year to get it waived – being a pest sometimes saves $)

    • jd October 14, 2014, 12:12 am

      I do some card churning–I agree that there aren’t as many good offers as in the US, but some offers do come and go. There were lots of offers earlier this year when the Aeroplan program moved to TD, with different card issuers offering bonus points and waiving annual fees to entice consumers to switch to their cards. I generally only apply for cards during promotions where the annual fee is waived and I cancel within one year.

      Right now, you can get $400 cash back from CIBC when you get their Tim Horton’s visa and open a chequing account. I already received the $400 from this offer (less ~$15 paid in monthly chequing account fees), but it was more of a PITA than I expected. The Amex Gold card mentioned above is another good option with 25k points and first year free (+$50 cash back when you apply through Great Canadian Rebates.)

      • Prairie Practicality October 16, 2014, 11:14 am

        RBC VISA Infinite Avion has 15,000 pints bonus – worth $125 cash or use for flying. Annual fee of $120, waived the first year. I tried and it worked. 20 minutes signing up, 10 minutes redeeming and 10 minutes to cancel.
        CIBC Aventura, CIBC Tim’s ($20 at tims for signup) BMO MasterCard, Scotia Momentum etc.

        The cards exist in Canada. Not as many as the U.S. but they exist. Search your favourite banks, look at the CC and pay particular attention to travel points. Most travel points can be converted to cash. It’s not for everyone though, be careful.

      • jd October 26, 2014, 2:10 am

        If any Canadians are still reading these comments, TD is now offering their Aeroplan Visa Infinite with 25k Aeroplan points and first year free, with a minimum spend of $1000 in the first 90 days. If you apply through the link on Great Canadian Rebates, you also get $50 cash back.

    • Kenoryn October 20, 2014, 2:07 pm

      This isn’t a credit card, but there are some similar rewards things with bank accounts. PC Financial and Tangerine often have decent offers, and are also good no-fee bank accounts (plus Tangerine pays interest on chequing accounts and both have good interest rates on savings accounts.)

      Tangerine also offers referral bonuses for getting other people to sign up. There is currently an offer at Tangerine where the bonus is doubled, so if you refer someone and they start an account with at least $100 in it, before Oct. 31st, you and that person each get a $50 bonus. Then they can refer other people and get $50 for each of them. If anyone wants to sign up with my Tangerine referral, here it is. ;) (hopefully it isn’t breaking any rules to post that here.) Orange Key: 41615555S1

      Tangerine also has a promo on where if you set up a chequing account and set your pay to direct deposit to that account they send you a $10 “payday bonus” every Friday up to $120.

      • Kenoryn November 5, 2014, 8:23 am

        The Tangerine promo extended to Dec. 31st ’14 if anyone still wants to take advantage to get the bonus. :) (And get me a bonus!)

        However, while Tangerine still seems to be the best option for chequing, I see that Meridian Credit Union is offering 1.75% on savings accounts, which beats Tangerine and PC’s 1.3%., and Peoples Trust in BC beats them all at 1.8% for savings accounts and 3% for TFSAs.

        Also, I see CIBC is offering $400 to sign up for both a Tim’s credit card and bank account.

  • Sweta October 13, 2014, 11:13 am

    There’s a subreddit dedicated to churning: http://www.reddit.com/churning

  • Brandon Curtis October 13, 2014, 11:18 am

    You don’t have to invest the time to churn to save some money with reward credit cards. 2-6% cashback on every purchase is pretty easy with just a few no-fee cards:

    === US Bank Cash+
    5% on two categories and 2% on one, chosen quarterly from a list (http://goo.gl/FmUeo)
    Form: statement credits (any increment); >$100 redeemed at once, $25 Visa card (one per year)

    === Chase Freedom
    5% on quarterly categories (http://goo.gl/4qPuWo)
    Form: statement credit (any increment)

    === Discover It
    5% on quarterly categories (http://goo.gl/AOKmha)
    Form: statement credit ($50 increments)

    === Amex Fidelity Rewards
    2% on all purchases
    Form: deposits into a Fidelity brokerage account ($50 increments; can be cashed out)

    === Citi Forward
    5% on restaurants, bars, Amazon, book stores, record and video stores, movie theaters
    Form: gift cards in $50-100 increments (http://goo.gl/09r8)

    The Amex Blue Cash Preferred is also pretty nice (6% on groceries, 3% on department stores and gas, $6000 spend limit) but you need to account for the $75 annual fee.

    An underappreciated strategy to increase cashback is to add trusted people as authorized users on your account: it’ll boost their credit score and your rewards. This is especially beneficial on cards that charge an annual fee.

    It’s probably intuitive, but the airline cards are usually a bad deal and not worth the fees and hassle if you’re not a frequent flier.

    • Rdog October 13, 2014, 11:37 am

      Ok, lets assume every purchase is 5% cash back. Now, let’s combine cash back at 5% with quarterly rewards to see how close we get to $10k that MMM mentions in the article. Say you get 12 cards a year and the average bonus is $400 for a total of $4,800 of rewards. Not to get $5,200 back in cash at 5% you would have to spend $104,000 annually to get a total of $10,000 cash back. Or are people really getting more than 5% in travel rewards? How much are people getting in travel rewards? Has Mr. MM been drinking the coolaide and not doing at least some fuzzy math before submitting an article because he is anxious to make money from his credit card referrals? A example could certainly help unless MMM didn’t do his math…


      Concerned MMM Reader.

      • Debbie M October 13, 2014, 12:48 pm

        This article is mainly about the awards for signing up, not the cash-back awards. Hope that makes you feel better!

        • Angela M. October 13, 2014, 1:49 pm

          The real rewards are in the sign-up bonuses, which can add up to several hundred dollars/card in travel rewards. Churning” cards means opening a new account, claiming the sign up bonus, then moving on to the next card INSTEAD OF opening and using a particular card on an ongoing basis for those measly % cash back rewards. Many cards allow you to claim the “sign up” bonus once every 24 months, so if you plan well you can keep the free travel ride going for years and years. I think I’ve claimed the United sign up bonus three times in the past decade!

          • Erik Mathys October 14, 2014, 6:08 am

            I have never churned credit cards, so maybe this question does not make sense. If the benefit is just the signup bonus, why do you need a spreadsheet to manage all these cards? The complexity sounds like an accident waiting to happen.

      • Brad October 13, 2014, 1:17 pm

        Rdog: The value is not in the little 5% cash back but in the signup bonuses. The 5% is irrelevant when you’re looking at an easy 15%-40% on any decent kind of redemption from the signup bonus.

        I think MMM has proven that he doesn’t care one iota about the credit card referrals when he willingly gave up Chase direct affiliate links just to prove a point:


        People would kill for those direct links with Chase!

        And honestly, that $4,000 per month he was making was chump change compared with what he could be making off these affiliate commissions now. If he really wanted to go for it, I guarantee you he could easily make $1,000,000+ per year just from those Chase commissions with a very minor effort (this post for instance).

        And he gave that up for ONE WORD. If that isn’t Badassity at its finest, I don’t know what is…

      • Kenoryn October 20, 2014, 2:46 pm

        Folks, Rdog did factor in the signup bonuses as well. :) I think the difference is the number of cards you are assuming. You said 12, while someone above mentioned they do 20-30 per year. 25 per year = $10,000 at $400 each. The first example in MMM’s article says she applies to 4-8 cards quarterly, which means 16-32 cards per year. That assumes no cash back or other spending rewards. However, they often have minimum amounts you need to spend in a certain timeframe to get the bonus, so you’d have the basic rewards associated with that as well.

  • HawkeyeNFO October 13, 2014, 11:23 am

    The credit card churn game changes so fast that this fine blog post is already out of date regarding Amazon Payments, as that option is no longer. Churning cards is a very profitable endeavour though, especially with travel rewards. No deal lasts forever, so you need to keep up with the latest deals. In 2013, I made a nice 5-figure sum from these types of activities, but many of the deals from last year are gone. Make sure you know what you’re doing before you start, and don’t go big until you’ve realized some success with 3 or 4 cards.

    • Brandon Cronan October 13, 2014, 1:17 pm

      sage advice. The whole game is cyclical with bonuses coming and going, so if you’re new it’s worth watching for a bit before jumping in. But when you do see one of those sweet deals there’s no harm in capitalzing! I’d recommend starting small with one or two cards that you know you can comfortably make the minimum spend on. Then go ahead and use those points to travel! The value of the points is continually decreasing so no point in hoarding a bunch of them for years only to see the value of those points erode.

      Perhaps within the next couple of years you’re considering a travel based mini-retirement to test the waters of full blown retirement? That would be an optimal time to get into the CC game.

    • Richard Van Manen October 13, 2014, 5:31 pm

      Wondering if anyone was going to mention this article coming out the day that Amazon Payments stopped working :) That easy manufactured spend path has been shut down. You can still time these deals out when you know you have a large credit card purchase coming up.

      • Paul Andrew October 14, 2014, 10:31 am

        Seems like the target red card is the next big thing. I am going to check it out soon.

    • Paul Andrew October 14, 2014, 10:32 am

      I have heard stories of the olden days with the US mint accepting credit cards for currency.

  • Paula October 13, 2014, 11:25 am

    You touched on CCC for cash benefits, which for me would be far more helpful than travel benefits at this point. Anyone who can elaborate on the strategy? Thanks!

  • RH October 13, 2014, 11:27 am

    Sounds interesting……but it’s seems like a lot of work. It’s like buying clothes, keeping the tag on, wearing them, and returning them within 30 days for a refund. Trying to keep track of all that…..yikes.

    I guess I wouldn’t pick up the $500 bill buried in the mud under the leaves…

    • Brandon Cronan October 13, 2014, 1:19 pm

      If you’re not into managing spreadsheets, this probably is not the game for you.

  • James Roloff October 13, 2014, 11:35 am

    I can’t help but notice thing these reward cards almost always incentivize anti-mustachian behavior:

    • Mr. Money Mustache October 13, 2014, 11:39 am

      It is true. I like the “Amex Blue Cash” card, because it is 6% back on a useful category, Groceries. There are also a few cards that do 2% back on everything, including my own Travelocity American Express. And the signup bonus for many cards can be redeemed for a “cash” statement credit rather than travel, if you don’t have enough travel planned to eat up the points. Chase Sapphire Preferred is one of these.

      • Ed October 13, 2014, 12:24 pm

        Currently 6% if you pay $75/year and 3% for the $0 annual fee version.
        You break even after $2500 spent on groceries and there is a limit of $6000 spent.
        3% of the remaining $3500 is $105.
        $105 less $75 is $40/year of free-ish money.
        Just remember to switch to another card paying more than 1% when you reach your $6000 limit.

        • Debbie M October 13, 2014, 12:47 pm

          It would take me five years to reach a $6000 limit on groceries.

          • CanuckExpat October 15, 2014, 11:51 am

            Buy gift cards at the grocery store and then turn them into cash.
            Oops, did I say that? :)

            This gets into manufactured spending, but then it is easy to max $6000 each year

      • Mistrblank October 22, 2014, 1:48 pm

        Sadly, not useful for all groceries since I shop Aldi for massively better savings on most of our groceries and they won’t take a card. I do far better than 6% savings too by shopping with them for the things my family consumes.

    • Brad October 13, 2014, 12:22 pm


      Don’t even bother with those piddly little 2x or 3x on restaurants, gas, etc. — the only real value is in the signup bonus.

      You put your normal spending on the new card instead of using your old credit card, cash or a debit card and don’t do anything else differently.

      Let’s look at the Chase Sapphire Preferred bonus for instance: You’ll have 48,000 Chase UR points at the end (40k bonus + 5k bonus for authorized user + 3k for $3k spend = 48k).

      You can trade that in for $480 of real cash (at 1 cent per point) or $600 in travel through the UR portal (at 1.25 cents per point).

      The $600 is a 20% return on your $3,000 spend, which is a great return for doing nothing! So you can see why you want to maximize the bonuses…

      We were able to take our 48,000 UR points and turn that into 5 round-trip flights from Richmond to visit family in NY (it is only 9,000 British Airways (UR transfer partner) Avios points to fly on American Airlines from RIC-LGA). Those are about $450 flights, so that was $2,250 in value for us on our original $3,000 spend. We were please with that 75% return to say the least.

      • Paul Andrew October 14, 2014, 10:34 am

        I know you just used it as an example, but the UR portal is usually abysmal in my case. Transfer partners such as Hyatt have been great in my experience for more bang for your buck.

  • Beric01 October 13, 2014, 11:36 am

    My biggest problem is not the concept of churning, it’s that it’s hard to spend enough money to get the reward! My Chase Freedom was the best when it was spend $500 in 3 months for $200 – that was doable. But $3,000 spending in 3 months?! It takes me 9 months to put that much on a credit card! My main expense (as a Silicon Valley resident) is rent – and my landlord only takes checks. But not owning a car and no longer spending excessively on stuff I don’t need, a high credit card spending month for me is $300.

    • Mr. Money Mustache October 13, 2014, 11:46 am

      Sounds like a great problem to have! My own family usually burns $1500 per month on the credit card, since most of our expenses go through it and we lead a not-that-frugal lifestyle.

      Over the past year however I have had the pleasure of spending over $60,000 on construction materials when building this new house. I did all of on rewards cards, of course, and the bonuses have been quite nice.

      • Ron October 19, 2014, 8:33 pm

        18k/25k=72% of expenses via credit cards. A good number. Maybe you should solicit tips on how to max out expenses on credit cards.

    • Holly October 13, 2014, 11:59 am

      I am in a similar position. One thing I have done to meet minimum spends before is prepay bills. For example, my health insurance company will let me prepay up to 6 months on a credit card. That is $2,400 right there. You can also prepay your utility bills and insurance bills if you want. You’ll miss out on the interest you would be making on that money but it might be worth it if the reward you are pursuing is especially worth it.

      • alison October 19, 2014, 7:51 am

        My solution to this is to add authorized users who I trust, whose spending exceeds my own but isn’t so out of control that they won’t be able to pay me the full amount they owe every month. In theory they only need to use the card for a few months, until you meet the minimum spending….

  • thiseye October 13, 2014, 11:39 am

    Incidentally, today is the last day of manufactured spending with Amazon Payments. https://payments.amazon.com/help/76056

    I’ve been doing the churning game since earlier this year to pay for my travel habits while trying to maintain a mustachian lifestyle. The complexity really comes at redemption time trying to maximize the value you get for your points/miles. And then also if you get into the manufactured spending game which has some low-hanging fruit (Amazon Payments being one), but gets a lot more complex (and ever-changing) from there. So it takes a lot of time researching and learning the game and then to keep up-to-date on the most recent changes.

  • JP October 13, 2014, 11:45 am

    Maybe I should don my tinfoil hat before posting, but this general idea seems unnecessarily risky and complicated for my taste – excessive identity exposure, increased potential for human errors, etc. Won’t take long before your “hourly rate” plummets should something unfortunate happen. And the more popular this idea gets, I predict it will get harder to profit over time. I liken it to trying to get freebies out of attending timeshare presentations – diminishing rate of return for the effort and hassle the more you do it.

    • Paul Andrew October 14, 2014, 10:38 am

      I agree somewhat, but I think that it will only get better with time. Unlike timeshare presentations, it will directly benefit the churners as the masses are more likely to use credit unwisely, thus increasing the incentive to drive sign-ups through offers.

  • Jacob October 13, 2014, 11:51 am

    Having travel hacked free flights for 7 people to Hawaii (heading there next month), free rental cars there and a free night at the Hyatt (night away from the kiddos) with only a week’s worth of work, I can assure anyone that it is worth it if you plan well.

    I have also gotten another 5-7 nights free used for various weekends away with my wife and stays at places like the Westin in downtown Seattle and Disneyworld (The Swan Hotel).

    Add that to the ability to fly down at a moment’s notice to visit ailing grandparents last year and even fly my mom out who didn’t have the cash….totally worth it for me and my family.

    It’s not the luxury that appeals to me, it’s the ability to visit family and friends and travel for next to nothing almost anywhere in the world that draws me in. I keep a simple spreadsheet with cards, bonuses, spending requirements, and cancellation dates (because annual fees aren’t worth it) to make sure I get the most from the cards.

    I have burned about a half million miles in the past year and a half (when I first started), and redeemed about $20,000 in free travel. It’s a fun game to anyone interested.

    That being said, take heed and don’t play if you are taking out a loan within the next year or so. Wait until you don’t need to borrow or ReFi, and then play away! :)

    And MMM, if you need any suggestions on this stuff, I’ll gladly help :)

  • Holly October 13, 2014, 11:55 am

    I think credit card hacking is most certainly a Mustachian hobby if you only take the upside. If you are bad with credit cards or in debt for some reason, then it is probably not a good idea!
    We have 50 credit cards spread between myself, my husband, and our two businesses. We just use them for boring stuff- business expenses, groceries, health insurance, etc. For example, I’m never tempted to go out and buy a new TV just for the rewards!
    With that being said, we profit from these cards extensively. We are getting ready to embark on a $6,200 vacation to Europe that I paid $197 for in airline taxes and fees. Our hotels cost literally zero and I got our hotels in London and Paris to throw in a free breakfast! We are going to St. Maarten in January for a total of $161 (airline taxes and fees). I am flying to Denver next week to see Pearl Jam and paid a total of $11.50 for our two flights on Southwest- our hotel is free. Tickets were not free, unfortunately =(

    Still, you get the point. Getting free stuff is awesome and it’s worth the effort for me. I also write for Frugal Travel Guy, however, so it is part of the “job” to actually take advantage of the offers I write about.

  • Ryan October 13, 2014, 12:22 pm

    This article seems far too uncritical of the concept of credit card churning to me. It almost reads like an advertorial. I accept that some people can, and do, make money by juggling cards around in this way, but it’s not for me (or most other people I suspect, even Mustachians). I would not recommend it to my family or friends because I think it’s potentially dangerous if not done very, very assiduously.

    • Mr. Money Mustache October 13, 2014, 12:31 pm

      Definitely a valid criticism Ryan. I do think credit card optimization for everyone, but I have a hard time criticizing the practice since I do it myself in a light way.

      That’s why I think of it as deciding what to do with dollar bills lying on the ground: I pick them up if I enjoy the practice, but since I no longer actually need more money, I try not to go too far out of my way to do it.

  • woodnut October 13, 2014, 12:24 pm

    I have a coworker that churns his mortgage. Every 3 months he refinances, switching between 15 yr and 30 yr loans. Evidently he could not refinance 30yr for 30yr, or 15yr for 15yr if the new loan had a higher interest rate. He would find mortgages that had negative points. They would pay him to take out the mortgage at the expense of a higher interest rate. I never did the math, but he claims it was a money maker even with the higher interest rate. I’m thinking when he goes to sell, the county clerk’s office isn’t going to have any idea who has a deed of trust on his house and who doesn’t. I’m not sure if he is still doing it, but I thought it was a fairly unique hack of the system at the time.

  • CCORD October 13, 2014, 12:39 pm

    I don’t have time to read all the comments right now so I may be repeating someone else.
    As a churner I caution everyone to do a lot of research and read all of MMM guru’s advice, the Boarding Area blogs and the Flyertalk boards as well. I have been very successful at this for many years but it’s a lot of work. A lot of work.
    You need a long term travel goal(s) and an application strategy developed before you dive in.
    You need to understand each card, its points system and how it works thoroughly before you apply otherwise it might not really be worth it for you.
    Most of the best cards carry annual fees.
    You need to decide the value of different miles, points and other card perks to you, to determine if it’s worth paying the fee.
    You need to develop a system to make sure you can meet the minimum spending requirements and also to make sure you don’t miss any payments.
    Sometimes when you apply online you won’t be approved. You will have to call CS and “convince” them to give you the card. You need a strategy for that.
    Lastly if you’re using miles and points to travel you need to be flexible (about dates and destinations) and check for availability almost daily. It’s a huge task to plan trips with miles and points.
    I advise newbie’s to tread with caution, start slow. This isn’t for the faint of heart. No “free” travel is worth ruining your credit score. That said every year I take around $10k+ worth of free travel. It’s what I consider to be a very lucrative part time job. Best of luck.

  • Frugal Paragon October 13, 2014, 12:43 pm

    I would be interested in trying this casually, but alas, I have a credit score under 700 :-(. We once missed three months of mortgage payments and then short-sold a house. So my priority is to try to get my credit score up and get ready to buy a house… Unfortunately, I have zero actual ideas for raising my credit score.

    • Mother Fussbudget October 13, 2014, 1:34 pm

      I am in the same boat – short-sale in March 2011 – over 3 years ago, yet my credit score is below 700 (~680).
      If your credit score was great before the short-sale (i.e. 700-800), short-sale affects your credit worse (~180 pts) than if you had marginal credit ahead of the short sale (i.e. lower than 700, you may only lose 1oo pts).

      The short answer is: I’ll have to wait 4 more years before I’m back above 700. At this rate, I’ll be FI before I’m able to take out a mortgage.

    • KBlynx October 13, 2014, 3:23 pm

      Frugal there is lots you can do right now! I spent 3 years aggressively attacking my low score and saw a lot of payout for the hard work. I started with a secured credit card. You send them X amount and that is your credit line. Then I got a store card. I paid them off every month. When I applied for my mortgage they told me that they were impressed with how quickly I’d worked my score back up. It’s still not GREAT and won’t be for years but it was enough to prove that I have been serious about repairing my finances and the lender took notice.

  • Angela M. October 13, 2014, 1:14 pm

    This article is spot on MMM! Since 2005 my family has traveled free or almost free every year by mindfully taking advantage of credit card offers. I recently started FreeTravelGenie.com to help newbies get started, with practical tips and step-by-step instructions (complete with pre-made spreadsheets) for first-timers. The credit card companies all rejected my affiliate applications so I maintain the site as a free public service and do not keep updated with the latest short-term offers, but the ongoing offers I have posted rarely change. My site also has a Wise Credit page with info to help avoid pitfalls that make “free” travel very expensive. #FlyFreeTravelHappy

  • CTY October 13, 2014, 1:21 pm

    First–this makes extreme couponing look like child’s play! And just like couponing (where stores/brands put barriers up to end the freebies), this too will become harder & harder to do. In the past I have done short-term, amateur churning (never knew it had a name) but it is getting harder to do. Mostly because I just don’t spend much money.
    I do have a question though–I am wondering if there is any truth to merchants claim of the credit card companies charging them for card transactions (and didn’t MMM say we already pay (3%) this if we charge or not?). Anyway, typically if they charge more we don’t buy from them. But here’s the catch– we are in the process of obtaining a 0% card to pay for painting the house–but are not completely on board because the contractor adds 2% for credit card users. He claims this merchant fee from the credit card company & he’s just passing that on to us. (It’s not just him–every contractor said the same thing–and a few don’t take cards because of it).

    • Angela M. October 13, 2014, 2:16 pm

      I have never had a house painted so not sure how much $ you may be taking about, but let’s say it costs $3,000. A 2% fee would add $60. The Chase Sapphire Preferred card would score you 40,000 points, enough for free r/t airfare. Whether $60 for a r/t ticket is worth it or not depends on whether you have a travel plan you are working on. I would probably only do it if I had a plan to use the ticket… but then I always have a travel plan I’m working on. :)

    • Geek October 19, 2014, 8:05 pm

      While I’m all for people trying to recover their fees somehow, it may be against your credit card provider’s agreement for him to charge you extra. You could give them a call and see.

  • scott October 13, 2014, 1:25 pm

    Does anyone know if it is possible to take advantage of the same promotional bonus more than once? For example, I opened a Chase Sapphire Preferred card, collected the bonus, and closed the account. Is there some sort of waiting period, 2 years?, 5 years?, after which you can earn the promotional bonus again on the same card? I am primarily interested is cash bonuses and it doesn’t seem there are that many cards that give cash bonuses of $400+.

    • Alexandria October 13, 2014, 1:52 pm

      It depends on the card. Google a bit to see what the waiting period is. Most of them will only let you redeem once per year. I have done several credit card bonuses three times. Chase seems particularly desparate. They gave us like $2,000 this year just for opening accounts that we quickly turned around and closed. The Sapphire is one that I have done 3 times. I’ve been told you can’t double dip their SW Chase card, but I just saw yesterday in their fine print that it was okay to redeem a new card bonus every 24 months. That is the longest one I have come across. Other people on the internet will know the answer for each particular card.

    • Angela M. October 13, 2014, 1:58 pm

      Always check the “Offer Details” — the current Chase Sapphire Preferred (CSP) bonus offer is available to people who are not current cardmembers and who have not claimed a CSP bonus in the past 24 months. This is a good example of a card that I like to close as soon as I have earned the bonus, so that I do not pay the annual fee that kicks in after 12 months AND so that I can claim again after 24 months have passed. I keep open indefinitely cards with relatively low bonus offers ($200 or less value) and no annual fee to help balance out my credit score, which depends in part on the average time accounts have been open.

  • Nathan Friedly October 13, 2014, 1:39 pm

    Does anyone else feel that rewards cards are, in essence, bribery? I mean, it’s a legal, socially acceptable bribe, and I can’t really recommend that people not use rewards cards when most merchants price things the same either way. (Not to mention the extra consumer protection for lost/stolen credit cards.) But it just feels scummy.

    I have to wonder what would happen if rewards cards became illegal some day – would people be in less debt on average? Would they buy less crap they don’t need? Would debit cards get the same protection as credit cards?

    • Angela M. October 13, 2014, 2:04 pm

      As a board member of a local organization, I know we prefer to receive dues and donations by credit/debit card (and we are charged the same processing fee across all credit/debit cards) instead of cash/check because it actually costs us more in resources (labor) to process cash/check payments. Credit cards are NOT for the credit- or debt-challenged; to keep finances in line, I always set up full-balance monthly auto-pay on new accounts so using a credit card has the same effect as a using a debit card and is transparent as far as my bank account balance is concerned.

      • Debbie M October 13, 2014, 2:59 pm

        Very interesting. My local food coop claims that it’s all the same to them whether we use cash, a check, a debit card or a credit card, but I found it very hard to believe. I did hear that some credit cards (American Express) charge businesses higher fees than other cards do.

      • Nathan Friedly October 13, 2014, 6:12 pm

        Interesting – Are you thinking that without rewards cards, you’d have more work to do?

        I used to accept credit cards when I was a freelancer and I felt about the same way – they are easier. But in my case, rewards cards costed me more than 5% and many of my clients paid with rewards cards. And, being my sole source of income, that worked out to several thousand dollars per year.

        (And, just to clarify, I’m not against cards in general, I just don’t like the rewards aspect.)

        • Kenoryn October 20, 2014, 2:53 pm

          I have heard that the premium cards cost retailers more when you use them, and that AmEx is the worst. When shopping at small local retailers I often use debit, and use my rewards card for the gas station, Superstore, etc.

  • Samiam October 13, 2014, 1:42 pm

    I have been considering implementing something like this for awhile . I have meticulously cultivated a high credit score (over 800) and pay my balance in full each month. Just paid everything else off so I am debt free except for a small balance on my HELOC. I currently have 6 cards with an average of 10K credit limit. Assuming I apply for 2-3 rewards cards at a time a couple times a year, will closing unused cards hurt of help my credit score. I could live with a ding of 20 points or so assuming I am profiting handsomely from this activity.

  • Ohio State Eye Doc October 13, 2014, 1:46 pm

    I started doing this last November and I’m on my first round of cancellations. My difficulty is in deciding which cards to cancel when and if I have the opportunity to reapply in a year or two to get the bonus miles once again. Has anybody been able to cancel a card just to resign up with it a year or two later and get another round of bonus points?

  • gubmints October 13, 2014, 2:18 pm

    Good summary- This is how you make the most of credit card bonus offers. I list 5 more ways to make the Credit Card Bank your Poodle here : http://wp.me/p2Nyqo-qM

    • Debbie M October 13, 2014, 2:53 pm

      I’m not sure I want a poodle, but I did enjoy your post. For some reason, I never thought to have one card just for “utilities” (or regular payments) that you never expose to compromise. I LOVE that idea and am now thinking about how I will implement that.

  • Janet October 13, 2014, 2:53 pm

    Do any Australian Mustachians have any successes to share?

    We recently signed up for the ANZ no-fee in the first year + 50,000 Qantas points deal (now closed) but only hubby could get one because I had held on to a no-fee ANZ card from years ago. Apart from this, I haven’t seen any viable sign-up bonuses i.e. where there is a low or zero annual fee. The only cash bonuses I’ve seen is a $50 cashback with Coles Mastercard (10,000 Flybuys points).

    • Katherine October 13, 2014, 4:31 pm

      Ditto for NZ, I’ve never seen any signup bonuses, and the card I do have has a very low rate of cashback compared to some of the figues I’ve seen quoted for the US.

      • Vanessa October 16, 2014, 5:32 pm

        We are not really very bonus driven in NZ. No sign-up or transfer bonuses. If you shop at countdown and have a 0necard and use your point-credit card you get more reward for money spent, but it’s a pittance compared to the US. But you pay more for your groceries than pak n save. Amex platinum is linked to Air New Zealand air points has an annual fee, but the rate is one point for every $75 dollars earned (that’s the best rate). It seems to me that Churning here would just churn your brain and get hardly any reward.

    • Neo October 13, 2014, 6:24 pm

      I looked into this before(Australia) and couldn’t make it work. After this article I’m tempted to have another look. Other bonuses to look out for are sign up’s for savings accounts. I got $50 for suncorp $50 for Hsbc $75 for ING and 5% off purchases for 6 months and $50 for a Mywealth CBA trading account.

    • NATH October 13, 2014, 9:29 pm

      There is not many bonus’s around in Aus but the one you signed up for with ANZ sometimes comes up with other banks as well.
      Problem is in Australia when you apply for a mortgage they take into account your credit card debt as fully utilised even if you never use the cards. So $50,000 worth of available credit x 3% (min monthly payment) = $1500 per month less servicing for mortgages.
      Good thing about having a few cards though is its a springy debt cushion as described in one of MMM’s articles.
      One way to earn bonus’s is sign up for a Platinum Amex or similar with strong point earning capacity. 2 or 3 points per dollar spent. Then when you go out and buy things, groceries, dinners etc just put everything on the card. after a couple years you might have 100,000 points which could get you a return air-fair to somewhere nice overseas.
      Another trick is if you can land an executive job with a corporate credit card, the points can be arranged with the credit card company to be transferred against your personal name. The potential benefit here is huge and I have a friend who flies to Europe frequently just from spending on business expenses etc.
      The oldest trick is when you are a frequent traveller you actually earn points too. Qantas frequent flyer etc. If you check out the website these points can be used at department stores and for vouchers and other things. Also if you can upgrade yourself to silver or gold or platinum frequent flyer status (perhaps with the help or regular employer funded business trips), you are much more likely to get upgraded on flights and then actually earn more points with extra freebies.

  • Andres October 13, 2014, 3:19 pm

    I’m all for gaming a system, but lately I’ve been paying cash for things under $500. I’m fully aware that things are 3% more expensive because everyone uses credit cards, but I’m happy to pay cash to put a little extra into the pocket of a local business. If it’s an online purchase or I’m going to a chain, then I’ll use a card.

  • Even Steven October 13, 2014, 3:23 pm

    I know MMM mentions that you are in a Debt Emergency you should not churn and burn the credit cards. But what if you are afraid you are going to go back to spending on the CC and not paying them off or spending a little extra here and there, $50 here and $50 there, is CC churning and rewards reaping the best thing for me?

    I ask because I’m honestly afraid of having a credit card, I’m close to finishing up my student loan debt, but I don’t think it is a good idea for me to stay the course and just stay away. Is that wrong do you think I”m giving up hundreds of dollars???

    • Debbie M October 13, 2014, 3:30 pm

      I think you’re saving loads of money by knowing yourself and not doing anything crazy. There are infinite ways to make and save money–no one is going to do all of them. Just do the ones that are the best for you.

      • Even Steven October 14, 2014, 11:44 am

        Thanks Debbie! Since I read and write on personal finance I always see the CC game being played and feel like I”m missing out, but yeah sometimes it’s ok to just watch the train go by than to get on and see where it takes me.

        • mschaus November 5, 2014, 9:37 am

          Steven — I totally agree that taking control of personal psychology is very important, and avoiding cards may indeed be the best thing to do for you. But maybe some extra rigor on your cash flow statement would give you more confidence? I remember we spoke at the meetup about the RPF podcast — Joshua has a great one on cash flow statements that might help.

    • Sergey October 13, 2014, 5:37 pm

      Most of those cards also come with 0% APR for a year or more. Essentially, you can just focus on paying your student debt while charging your current expenses on the credit card. I did that and I only paid interest a few times due to not knowing the details of how payments are applied.

      • Even Steven October 14, 2014, 11:45 am

        The last part also makes me want to stay away, while I’m on the ball for paying items on time, I’d hate to slip and then have a late fee, interest, etc and find out it was all a wash at the end of the day.

        • David Robarts July 28, 2015, 12:47 pm

          I once slipped on paying a full balance on a rewards card (transposed a couple of digits causing the payment to be just a few cents less) and had to pay the penalty of interest on that card for a couple of billing cycles. That was a huge influence on my decision to set up my online bank to receive the bill and pay automatically. I use Mint.com to see my “net cash” (the total of checking & savings accounts less the total of credit card balances). I used to track credit card spending as if I had written a check (back when my financial life was simpler). The key is to make sure that every transaction feels to you like you are spending real money. For some, that means carrying arround cash, for others a debit card offers convienence, for those of us who feel that spending on a credit card is still sepnding real money there are some sweet rewards.

  • ks October 13, 2014, 3:30 pm

    of course, with domestic airlines awarding miles based upon $ spent on airfare, not miles flown, the airfare aspect of this pursuit could all be coming to a halt in 2.5 months. Better check the terms and conditions for 1/1/15. Hotel points still seem like a decent deal, especially if you can earn points via consistent business travel in one chain/brand, coupled with an affinity card or two.

  • CL October 13, 2014, 4:40 pm

    For 2 seconds I thought it was a joke post like the ode to SUVs that we saw in April.

    But then I remembered that MMM had spoken about credit card rewards before. I also have the problem of not spending enough on my credit card to get the rewards. I have about a month and a half left in which my spending needs to double in order to get the initial signup reward for my Ink card…and I have nada. I simply don’t spend enough to hit where I need to.

    After 20 seconds in the reddit churning area, I recognize that this is a whole new world with new terminology.

    • Paul Andrew October 14, 2014, 10:47 am

      I would recommend the flyer talk forums. The format of reddit isn’t very conducive to beginners as there is no wiki and the frequent posts get buried. I would check out the target prepaid red card/serve to meet the spending.

  • Sergey October 13, 2014, 5:24 pm

    I applied for the United card from Chase and have accumulated more than 100,000 points via the signup bonus and international travel. This year, I bought two one-way tickets, one to the Philippines, another from China back to the U.S. I still have some miles to use later :)

  • Alex October 13, 2014, 6:22 pm

    So there are some things you should know about credit card hacking… They aren’t necessarily bad, and the following statements shouldn’t necessarily stop you from playing the game, but if you are going to do it, then you need to be fully aware of the psychology behind these point systems, and consider your decision to proceed very carefully; Mustachians–you are not immune to this advice.

    CC companies are aware of the “hackers,” and far from disliking the practice, they work actively to promote it and recruit more “players” of this game. It isn’t that they are counting on you to “get addicted” to the points, forget to churn your cards at the right time, or end up carrying some balances in the end (though there is probably something to this as well)–you can’t “outwit” the system simply because you have the great advantage of being a mustachian–those situations would never happen to us; however, there is actually something else more insidious at work.

    For example: the fact that you are more likely to spend faster while playing (and the CC companies make money on every purchase put through the cards)–this is based on principles taught in almost every business school in the country now, and popularized in famous works such as “The Goal” by Eli Goldratt. The basic idea is focused around increasing “throughput”–e.g. how fast can you get the money wheel spinning? How often can you get people through the door? How quickly can you move product through the factory and out to sales? As it turns out, science has discovered that as people approach the completion of a goal, they naturally “speed up” toward the finish line–this has been shown over and over to work (think about those free lunches you get for stamp cards–they aren’t actually free–this system has been shown to pay for itself as much 5-10 fold in some cases simply due to increased throughput of the overall system). The credit card game has the same principles built-in–including a time limit and an attainable, clearly defined goal.

    Even more effective is when there is a perceived “head start”–people speed up their spend at an even greater rate if upon sign-up they already have a few stamps toward their 10th burrito (e.g., they may receive some points for signing up, but need to reach a certain spend limit before getting “the rest”). If you think you’re smart enough to evade these tricks, think carefully about that–do you like playing games and reaching goals? Do you ever think, “Well, I’m so close to meeting this spend limit, and I’m getting points for it–I will have enough to pay off this amount, so fuck it, I’ll go ahead and buy this [insert favorite item or experience here].” If so, you lost the game, and the CC companies have bested you (dratz)! Or how about, “I have been thinking about going on that expensive vacation or buying that new (whatever) for a long time, but now, I have the opportunity to sign up for this card, and if I’m going to spend the money anyway, I’ll “save” 500 on that purchase!” Again, you have failed. Without this incentive, is it possible that you could have been just as happy forgoing that experience or item for some other things, available right in your own family room, or out your back door?

    Again, the lessons are–you have to be ridiculously careful and guard against your emotional/irrational self (we all have one) while playing this game. You need to be acutely aware of your motivations for spending, and I’d only recommend it if you can basically automate the items that you ALREADY spend on. Be sure you add up in advance what you have “committed to spend” before taking the plunge, and make sure that it lines up with what your normal spend patterns/budget is typically like anyway.

    One more note: I thought that I was smarter than this system once upon a time, and I was aware of the psychology behind it going in, but after a few churns I noticed a pattern–I was “completing” my spend limits faster and faster than I had originally predicted due to all of the internal dialogues/justifications above, and then some–even though I already knew how it worked. So buyer beware! I don’t participate anymore, and while I don’t necessarily think others should gamble with the practice, you may very well be better than me, and that’s cool too.

    • Becky October 14, 2014, 9:16 am

      I LOVE THIS! That is all.

    • rjack October 14, 2014, 11:22 am

      Alex – Really excellent points! It is the behavioral finance aspects of churning.

    • Even Steven October 14, 2014, 11:48 am

      Alex I think you hit on some great points and reasons to pass on churning for myself. Thank you.

      • Fuzz October 14, 2014, 2:45 pm

        Great points, Alex.

        I caught myself spending more because I used a credit card for points, even though I paid it off at the end of every month. As an experiment, I’m switching to a debit card and making my savings/retirement contributions at the start of the month so as to limit the amount of money in my checking account. I think this is going to be much more productive.

        Also, I think it’s harder than it looks to actually redeem for travel points. But that’s just my anecdotal experience.

    • Lian October 16, 2014, 11:29 am

      Most useful comment for me! I know myself well enough to know I would spend more to reach those spend limits. The whole concept of credit card churning appealed to me at first, because I like to travel and want to do what I can to reduce those expenses; but it would only work for me during those years with a planned expensive purchase such as home maintenance/remodel – and I hope those kind of expenses are rare. I would be interested in learning travel hacks that don’t involve credit card churning.

    • KC October 18, 2014, 8:35 am


      Brilliant comment. It points up something I know about myself–namely that I’d be using up bandwidth thinking about how to spend “strategically.” And that’s bandwidth that I could likely devote to better things.

      That’s not to say that more disciplined thinkers/spenders/strategists won’t benefit. But it’s good to have an eye to your own susceptibilities.

    • mike July 14, 2016, 9:42 am

      Here we are in 2016 and I just finished my completion to get the Southwest companion pass. Perhaps I’m in a unique position on this in that now it’s time for me to travel and even up my spending.

      But I agree wholeheartedly with what Alex is saying. Man, I spent a lot more than I normally would have. But the education to me is worth it. I learned to manufacture spend and a few other tools too. And it almost has become a hobby, something I enjoy.

      Take Alex’s points to heart, but perhaps think of doing CC churning in a minimalist way. Just, along with spouse, do the Southwest companion pass. That’s it. One completion is good for 2 years. You do one and the spouse does it the next time.

  • Bob Hall October 13, 2014, 7:50 pm

    I’m just reading these comments totally aghast that nobody even questions whether participating in the credit card system is ethical. Does anybody stop to think how credit card companies can afford to give you free flights, and cash back deals? It’s because the credit card system cheats and swindles millions of financially un-savvy people. I don’t need to explain all the sketchy stuff they do — go google it.

    So the question shouldn’t be “If I see a $100 bill in the leaves, should I pick it up?” … Instead, it ought to be “If I could make $100 by, say, getting a kid addicted to cigarettes, should I do it?”

    Sadly, in today’s world, the one and only question is: “Is it good for ME?”

  • Syed October 13, 2014, 9:48 pm

    Very interesting stuff. I really enjoy reading about different churning and manufacturing spending methods. I have been able to make a decent profit (tax free!) the past couple of years. But I definitely agree it’s all about if the work is worth it to you. I have left certain lucrative credit card offers because of the excessive work that needed to be done. The best part is that it is fun once you get into it. It’s hard to do stuff for money if it’s not fun.

    • Paul Andrew October 14, 2014, 10:49 am

      The tax free comment is a good one. One of the great things about churning. It could get interesting if there is ever a high profile court case, such as one of the people that do it for a living.

  • Frugal Bazooka October 13, 2014, 11:34 pm

    I’ve been churning cards for fun and profit for over 20 years. My first run in with churning was when I got my first job after college(in the 90s) and suddenly I had substantial credit card debt. For some reason I jumped at the chance to spend every dime I made and more. The “more” meant credit cards, but even in my momentarily lapse of common sense I realized the interest rates were redonkulous. Once I came to my senses, I kept rolling the cards that had high interest charges onto new cards that offered no interest for a year. The churning saved me at least 2k over a 2 year period. Even if it didn’t save me a dime it still made me feel better that the credit card company was no longer getting that extra 20% + interest rate. Between churning and a drastic reappraisal of my awful spending habits I was able to buy a house within a year of being debt free. The underwriters asked a few questions, but the deals went thru and we kept churning as we bought 3 houses in a 3 year period (1 rental).

    The card offers these days are just too good to believe. The Barclay’s card is by far the best because you don’t have to worry about kowtowing to the airlines and their idiotic rules and black out dates. We just reimbursed ourselves $500 using our Barclay card points and it felt good to have the credit card company give us BACK some money for once!

    As much as i like your forays into science and social engineering and such, giving great financial tips is definitely the forte of this site…keep it up.

  • Mathieu October 14, 2014, 4:52 am

    Anyone from the UK doing this? It doesn’t feel to me like there are enough reward cards to go around?? We do have Amex, and Lloyds avios, but there isn’t much else out there…

  • Martin October 14, 2014, 6:13 am

    In the UK we have a name for this, it is called “Stoozing”:

    Stoozing’s the art of making money out of 0% deals. It became the vogue of money nerds when credit card companies first launched 0% deals.

    It works like this: Lots of cards lend new customers money at 0%. By grabbing this cash then saving it at as high a rate of interest as possible, you’re earning interest on money they’ve lent you for free.

    In stoozing’s heyday, the amounts people could get were huge, with the biggest stooze-pot being £80,000 of 0% credit card debt (multiple cards, continually rolling onto 0% deals) which saved that stoozer nearly £5,000 a year as the money was offset in his flexible mortgage.

    We’re not quite back to the heyday of stoozing but with the credit card market the hottest we’ve ever seen, with plenty of long 0% spending deals and bank accounts paying interest of up to 5%, stoozing’s definitely back.

    And so is the true poetry of stoozing – which is when one bank has a great deal for borrowing AND one for saving, so you can profit from its own cash.

    Warning: Stoozing is ONLY for those who are debt-free & financially savvy. If you’re not, avoid it as mistakes can be costly.

    The aim is to get the longest 0% spending deal you can and with possible added cashback rewards to boost your stoozing gains (don’t confuse these cards with 0% balance transfers, which are for shifting debts).

    Which cards’ll accept you? The only way to find out is to apply, but that marks your credit file.

    Once accepted, use the card for everything you buy; replacing all credit card, debit card, cheque and cash spending up to the credit limit – though never withdraw cash as you’re charged interest.

    As all spending is on the credit card, cash isn’t withdrawn from your current account, allowing unspent wages to build up. This means the debt on the credit card will be matched by extra cash in your current account – and this forms the stooze pot you can use to save.

    However there are a few safety rules for doing this:

    Don’t exceed your credit limit. That can result in you losing the 0% deal and hurting your credit score.

    This isn’t an excuse to overspend. We’re just using it as a method to build up savings to match the stooze pot.

    Only make the MINIMUM repayments. Don’t try to repay this card in full. Just set up a direct debit to make the minimum monthly repayments, usually around 2% of the outstanding balance. Don’t miss any payments, or you could lose the 0% promo offer, messing up your entire stooze.

    Never withdraw cash on these cards. That isn’t at the cheap rate, you will pay interest even if you clear in full, and it can impact your credit score.

    You now have debts on the credit card, and approximately same amount in credit in your current account.

    It’s time to maximise the interest you earn by moving the money into the highest interest savings vehicle possible. Don’t wait for the cash to build up, just siphon it off into the savings account as soon as possible.

    When the end of the 0% period approaches, you can choose to simply pay off the debt with the savings and bag the gains. Or you could shift the debt again to another cheap balance transfer to keep earning interest on the savings.

    If you take the second option, always try to grab the balance transfer card with the lowest fee possible. Balance transfer fees used to be around 2-3%, but are now a lot lower so that can make it worthwhile. Check the current top low-fee balance transfer offers.

    Plus, you can restart the whole scheme with another new card at the same time. It’s possible to do this whole system with two, three or four cards consecutively.

    Most lenders’ scoring systems aren’t sophisticated enough to detect that you’re playing this free cash gain.

    Yet multiple, clustered applications, and high outstanding debts, even at 0%, will diminish your ability to get competitive credit, so always spread card applications out.

    • Janet October 14, 2014, 5:09 pm

      Thanks Martin, I used to do this when I lived in the UK but had totally forgotten! I looked up zero percent interest rate cards in Australia and we have two offers currently with no annual fee – Coles (6 months only) and Westpac Altitude Business (no annual fee for first year only). With my low-ish expenses and mortgage my gut feel is that it wouldn’t be worth my while but I will definitely look into it – maybe it is if I can combine it with a no fee balance transfer at the end or something.

    • Frugal Bazooka October 15, 2014, 10:53 pm

      Stoozing! Great name, great game. There’s no better use of capitalism than to control the capital that is supposed to be controlling us.

      Thanks for the blueprint Martin

  • JayP October 14, 2014, 7:16 am

    This is pretty easy to do. I won’t make 10K a year, but I guess I’ll average around $1,000 this year. A couple of notes – to get good rewards, you probably need to charge around $3K over 3 months(to get the signup bonuses). Only do this if you are very maticulous in your payments, keeping track, and cancelling the cards before you incur and annual fees.

    Some good ones involve flight points, hotels(keeps you from losing accrued points with Hilton), and of course cash. You can reapply for the same cards after a couple of years.

    Credit – it makes your score slightly lower, but mine remains in the excellent range. Use creditkarma to check. We don’t plan on buying a home soon, so I could care less really.

    Think about this – IF you get a $400 signup bonus after $3K purchase – thats a 13.3% return! Plus whatever points you earn on $3K. Not bad!!!

  • Court October 14, 2014, 7:17 am

    I’ve been doing the cc game for years and it’s amazing but as mentioned before you have to be organized and keep track of everything in a spreadsheet and pay off your balances in full. It does require work but if you want to travel for free it’s so worthwhile. My fiance and I have been on 6 international trips and 8 domestic trips over the last 3 years with our points and we still have ~5500,000 points waiting to be used. There are many websites out there that track which cc is the best current deal out there so it takes hardly any effort on your end figuring out which card to apply for (some examples are Mr Points Guy or Million Mile Secrets). We sign up for about 5-10 cards a year. Sign up for cards that have high bonuses (I prefer Chase/United and Citi/American as the point requirements for flights are normally lower than other airlines like Delta). My fiance and I got the SW companion pass through cc bonuses and have been flying for free on domestic flights for 2 years. I normally cancel a card if it has an annual fee by month 11. Would be more than happy to help anyone who is just starting out.

  • Mrs. Prissypants October 14, 2014, 8:29 am

    Credit card churning is along the same lines of ponzi schemes, & other “get something for nothing” scams. It’s a scam, based on greed, plain & simple.

    I agree with one of the above comments about a Mustachian lifestyle being one that embraces simplicity, frugality, & can I add, HONESTY? Using a credit card for legitimate purposes & earning rewards is not dishonest. Signing up for dozens of credit cards with the intent to only get the initial bait (bonus rewards) is scamming the system. I’m glad Amazon has changed it’s policies. I know the treasury has also changed it’s policies once it got wind of credit card churners buying up coins & selling them in order to earn rewards points.

    Scamming the credit cards in the name of “sticking it to the sleezeballs” is the epitome of hypocrisy.

    MMM, I value your approach to personal finance, but I have to say I’m disappointed that you would promote this in any way on your site. Credit card churning is shady, unethical business & I don’t know how people who do it can sleep at night.

    Your analogy about picking up a $100 bill in the leaves/mud would be more accurate if you changed the leaves/mud to a bunch of hissing snakes. A select few may be able to retrieve that $100 bill, but most, if not all will get bit in the end.

    • Ryan October 14, 2014, 12:15 pm

      Where is the hypocrisy in “sticking it to the sleazeballs,” Ms. Prissypants? Do you agree that credit companies are sleazeballs? I do, and if you read MMM, you probably do, too. I like being a net loss to the credit card company.

      Is it because by sticking it to them, I might be inadvertently driving up the interest rates being charged to other consumers in order to pay for my goodies? To that I agree, but add that if everyone lived frugally AND took advantage of the goodies, we could drive them into a new business model where, I don’t know, they stopped charging usury rates but offered no goodies? I’d be down for that result. Credit card churning as it stands isn’t unethical or shady since you’re playing by the rules set up by the companies, the same rules that apply to everyone. The only shadiness creeps in with “manufactured spending.”

    • Frugal Bazooka October 16, 2014, 9:31 am

      Notwithstanding your personal feelings about churning, your first statement is not factual.
      There is nothing about churning that is remotely similar to a ponzi scheme and it certainly is not a get rich quick scheme. No one gets rich earning a $400 credit on their 1200$ credit card bill. If anything churning fits 100% in line with the MMM concept of minimizing costs and maximizing financial potential. Credit card companies know exactly what they are doing and no one is taking advantage of them (lol, that’s the funniest thing I’ve ever written – poor poor helpless billion dollar, poor people manipulatin’, credit card companies) Not only is churning legal and ethical, I consider it hypocritical NOT to take advantage of low hanging financial fruit.
      Calling people “greedy” on a website message board dedicated to building massive wealth thru radical frugality and general hacking of a complacent capitalist system is the height of lacking meta-cognition…and what you call greed, the rest of us greedy folks call “enlightened self interest”

    • Gmullz November 17, 2014, 1:36 pm

      I have no problem nickel and dimming credit card companies and banks out of a few dollars, while they do the same to millions daily. When they choose to offer a sign-up bonus, they’re placing a bet. They’re gambling that the person who signs up will rack up a balance and begin to pay interest which will cover the cost of the sign-up bonus and more.

      They’re losing that bet on someone like me, but definitely not losing on your average consumer, and as a result, a whole. Have you seen their earnings reports? They’re winning. If they start losing, maybe they’ll change their policies. Until then, I’ll keep flying for free to visit my sister, 6,000 KM away.


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