Churn question
 

Hello,

For those of you who do the 90-day (or whatever) churn cycle, how many cards do you typically open at a time?

I am not a churner by any means but it seems that most of the heavy churners try to do around 5 every 90 days. I prefer to do that many each year. I sacrifice many points but that is all I feel comfortable with. YMMV.

Question for the heavy churners... if you churn that many cards, do you cancel them right away or hold on to them for the first year then cancel? I guess I'm a "moderate churner" that typically holds 4-6 cards at once, 1 of which is a card I've had for a few years (good annual retention bonus), and the others I usually keep for a year, which nets out to maybe 3-4 new applications every year. I've thought about trying to increase this (to maybe 3-4 every six months vs every year), but not sure if the status of open vs closed accounts has that much effect on approvals/credit rating.

I usually try to do 3 to 4, or 4 to 5 cards every 3 to 4 months.

What bout the cancellation of cards? Do you cancel all of them every 3-4 months? Do you hang on to all of them for a certain amount of time all the while applying and/or adding 3-4 at the same time?

I'm interested in churning and have done a bit, but not at full-speed solely because I do not have a plan or a good strategy in place to open and close cards at an appropriate time (not right or exact time, but at the best possible time to do so) It looks like best possible time to apply for new cards is 3-4 months. What about best possible time for closing cards?

Sorry if the post was long, but I'm truly interested.

BTW... I have been following your blogs and keep on top of it by the way of RSS feed.

Thanks for reading! I usually never close a card unless I have to pay a fee or have to close it to get approved for another card.

Once again, around 4 months works for me, but it may vary for others based on length of credit history, level of utilization etc.

Can the public plastic recycling chatter and take the shop talk to PM. Many of us are still in mourning for the death of metals recycling on July 22 due to an overdose of chatter and publicity.

Recycling is a green business, lets keep that green coming in.

I also follow your blog and have found it informative and helpful, thank you very much. You are not alone with your general recommendation regarding credit card applications and cancellations. Others share your suggestions and IIRC, at the FT University near LGA a few months ago one of your fellow bloggers (the Frugal Travel Guy) advocated a very similar, if not identical, approach. I understand your basic advice yet I hope you don’t mind some further discussion.

Presumably if one is applying for about 4 cards every 3 months and being approved for most of them, one would have 12 new accounts each year. For some of those accounts annual fees will be waived after a phone call. And some will not need to be closed to obtain a new card from the same back, it might only be necessary to transfer some of the credit line. Potentially, including accounts that are kept open for many years to maintain a long history, one could have several dozen open credit card accounts. Is there a number of open accounts that is TOO high, at some point are too many open accounts counter-productive or too difficult to keep track of or too much of a security risk? Or do you find that closing accounts as you suggest (to avoid fees and to open new accounts) keeps the total number of accounts under control? Is there a maximum number of open accounts you would recommend and if so what is that number?

Presumably also, banks will not approve an identical account at the same time as one has an open account. If you have an open ABC Bank XYZ Airlines Platinum card, it would seem unlikely that ABC Bank will approve another XYZ Airlines Platinum card which would seem to go against the basic premise of churning. In other words, to churn the card to get the bonus (again!), it would seem that at some point the account needs to be closed. With the understanding that Citi apparently bases approvals on time since last approval, don’t other banks base approvals for identical cards on the amount of time since the account was closed? If one closes the account at 11 months, instead of 3 months, would that not result in an 8 month longer delay until that card could be churned?

Please do not think I’m being argumentative, I’m just trying to learn more. Thanks very much for your participation and comments.

Thank for the reply. I have read that particular blog few weeks back, and have forgotten about it. Thanks for the link

I like to know as well...

ditto.

good questions!

from my own personal experience, there is no hard and fast rule when it comes to churning.

each individual is assessed differently so there will always be a YMMV when it comes to giving advice.

the best advice anyone can give you is to research and read. Once you've done that, the next step is to ask whether you are comfortable with the risk/reward ratio you have discovered through your readings. if you are comfortable, proceed with your churning. Once you've done it a few times, you'll begin to understand the process that is unique to your situation.

12 posts in and this is the only reference to miles or points. I think this discussion belongs on another forum.

The reason you lump multiple card applications together, and submit them all on the same day, is that the credit card companies then don't see what the "competition" - ie, the other card companies - are doing when you're applying. Plus, if you are applying for more than one card from the same company on the same day, then credit inquiries for that company will be consildated into just one inquiry. So you get only one "pull" for two (or more?) applications. You credit score gets dinged by 4 to 5 points for each pull, so consolidating pulls is advantageous. Example: my wife got targeted for the Amex Gold biz card for 75K MR points after only $500 spend. I also wrangled a referral for her for the new Amex SPG 30K points card. I put the apps thru on the same day - in fact, within 1 second of each other, using two browsers - and she got approved for both, yet only got one inquiry on her credit report.

The reason you wait 90 days (or more) between churns is that many credit card companies will view an inquiry as not recent if it's more than 90 days old. They look less favorably on your credit worthiness with many recent inquiries. Waiting more than 90 days makes the inquiries not quite "recent". This varies, of course.

It helps your credit score if you have long standing accounts. So you should keep at least one or two cards for the long term. Your best bet is to identify a card that would be a good every day spend card, that you will use after you've reached all your new card spend thresholds, and plan to keep that card for a long time. This is the card that will get you good points value independent of the sign up bonus. Many think the SPG card gives great value for everyday spend, and I agree. I also need a Delta Amex Reserve to help me achieve airline status, and a Marriott card because of my hotel needs, but that's just my situation. You need to decide what works best for you. My oldest card is now 14 years old. I have another that is 12 years old. All the other cards I keep until shortly before the annual fee is due, then I cancel. That way my "average age of accounts" (which is a stat that the credit companies look at) is maximized. But if I'm not going to be using a card for ongoing reward benefits - in other words, if I only signed up for it to get the big sign up bonus, then I cancel at the 11 month mark. That gives me room for the next churn.

I churn 3 - 6 cards every 90 days. I keep telling myself I've got all the points I need, and there's no good offers left, and I won't be churning for a good 6 months....but then something new always comes along that I canNOT resist (Hello BA 100K miles!).

Hope this info gives you a useful starting point to develop a strategy. Thefrugaltravelguy wrote a book that helps - all profits go to charity - you might want to check that out. And FT is so huge with info, it can be daunting, but if you keep reading, you'll soak up info.

I respectfully disagree.

That is a valid point, although the theme of the entire thread is churning credit cards to MAXIMIZE MILES AND POINTS. Nevertheless I’ve revised my post to include several specific references to points and miles:

I also follow your blog and have found it informative and helpful, thank you very much. You are not alone with your general recommendation regarding credit card applications and cancellations. Others share your suggestions and IIRC, at the FT University near LGA a few months ago one of your fellow bloggers (the Frugal Travel Guy) advocated a very similar, if not identical, approach. I understand your basic advice yet I hope you don’t mind some further discussion, specifically regarding credit cards and maximizing miles and points.

Presumably if one is applying for about 4 cards every 3 months, to get as many miles or points as possible, and being approved for most of them, one would have 12 new accounts each year. For some of those accounts annual fees will be waived after a phone call. And some will not need to be closed to obtain a new card from the same back, it might only be necessary to transfer some of the credit line. Potentially, including accounts that are kept open for many years to maintain a long history, one could have several dozen open credit card accounts. Is there a number of open accounts that is TOO high, at some point are too many open accounts counter-productive or too difficult to keep track of or too much of a security risk? Or do you find that closing accounts as you suggest (to avoid fees and to open new accounts) keeps the total number of accounts under control? Is there a maximum number of open accounts you would recommend and if so what is that number?

Presumably also, banks will not approve an identical account at the same time as one has an open account. If you have an open ABC Bank XYZ Airlines Platinum card, it would seem unlikely that ABC Bank will approve another XYZ Airlines Platinum card which would seem to go against the basic premise of churning. In other words, to churn the card to get the bonus miles or points (again!), it would seem that at some point the account needs to be closed. With the understanding that Citi apparently bases approvals on time since last approval, don’t other banks base approvals for identical cards on the amount of time since the account was closed? If one closes the account at 11 months, instead of 3 months, would that not result in an 8 month longer delay until that card could be churned?

Please do not think I’m being argumentative, I’m just trying to learn more. Thanks very much for your participation and comments.