question about churning
 

would this be considered churing?

I have a Chase freedom and a Chase Mileageplus. I move all my credit from the MP to the Freedom and close out the MP. Then apply for a new card.


What are the advantages or disadvantages of this process versus just cancelling a card and losing the credit limit? Thanks!

That's not really churning.

The purpose of churning is to garnish as many points/miles as possible. Cancelling the MP just to apply again immediately doesn't count. Churning is selecting a group of cards to apply for, based on your needs and the offers available, on a regular basis. Some do it once a quarter. Others once or twice a year. Some super-churners do it more frequently.

You may discover that Chase is unwilling to give you a bonus on a new MP card right after cancelling the old one if you're re-applying for the same card.

As far as advantages/disadvantages - if you close the card without transferring the limit, you lose that chunk of your overall credit limit. If you carry a balance, your utilization % will increase and your score may decrease. Closing the card does not, in and of itself, lower your score. It's the loss of credit and commensurate rise in utilization that does.

I wasnt going to apply for another MP, I was thinking about applying for the Sapphire. sorry about the confusion.

So when you guys churn, you just cancel the card outright?

I think the word churner applies to those who apply for credit cards, meet the min. spend to earn the signup bonus, cancel the cards (if they have an annual fee) and repeat the process. Each card has it's own limitations on how often (if any at all) you can sign up for the card again after cancelling. Citi seems to be the most lenient.

What's the reason for closing the MP card? What is your credit score, total credit and credit history with that card and your other cards? All those play a factor and you don't want to mess up your credit score by making the wrong moves. If you had the MP card for a while and it doesn't have an annual fee, I would just keep it open unless Chase forces you to close the card to open up another one. I had 4 cards with Chase and recently tried applying for a 5th. Was told to close one to get the newer one. Even though I had good credit with them, I applied for two cards just a few months ago.

Depending on your total credit, debt to credit (how much you still owe to your current credit cards) ratio, credit history, etc. closing a card for no reason will probably hurt you more. If it's a more recent card and everything else is good (low credit utilization ratio, long credit history for other cards), you should just see a small drop in your credit score. The more credit you have the better it looks. So by closing your card, your credit limit will drop.

I suggest reading up on these threads in FT and other blogs. They have a ton of information on churning cards. I wouldn't just jump into it without being somewhat prepared on what to expect and how it impacts your credit.

Historically the terms were:

App-o-Rama (AoR) = apply for lots of cards for bonuses or 0% lines (back when savings accounts and CDs paid good rates).

Churn = get the same bonus for the same card after a period of time (e.g. Citi Hilton, US Air, Citi AA after 18-24 months). It varies, but you may not have to cancel a card to churn it.

Lots of folks say churn in place of AoR.

Tactically, don't pre-close a card for an app of a different card from the same issuer. Reports are the banks do not immediately release the credit. Instead, apply, if rejected offer to reallocate or close the line when on the phone with reconsiderations.

how is it possible to get the same bonus without closing the card?

You just have two of the same card. For example, with the Citi HHonors card, my wife and I each have 4 cards (2 each from 2 application cycles).

what constitutes an app cycle? 6 months?

It varies by card when you can apply for the same card again. For Citi it's about every 90+ days (some say 96 or so to be safe).

does the app cycle differ from the request for credit increase cycle? or does it also differ across companies?

Why would you have a "request for credit increase cycle"? When you ask for an increase in credit, they MAY do a hard pull on your CR. Just what you don't want.

Every bank / CC has a different cycle. For example, for Citi AA, you can only apply every 18-26 months. For Citi HHonors, it is more or less every 90 days (depending on what other pulls you have had). AMEX tends to be 1 year after closure of a card.

So as you can see, it all varies.

a few years ago (before i started doing app-o-rama for the sign-up bonuses), i used to ask for credit increases every 6 months to lower my debt-to-credit ratio

You'll find that FlyerTalk is a bit of a different world than many other forums. The top strategy here for reducing debt-to-credit is paying in full and early. ;)

(However, we do have and welcome all kinds of folk, anyway.)

The disadvantages are as follows:

1. Chase doesn't like it when you close the card too soon. Never do it within at least 6 months since opening or you can lose the bonus.
2. You won't have any leverage when you apply for another Chase card. It doesn't apply to your situation since you only have 3, but the more Chase cards you get the harder it becomes to get approved without negotiating.

GK17 already covered the advantage of moving the credit.

I am a bit confused and have few questions as I have been churning for only a bit more than 1 year. Sorry for this long message. But you guys offer great help. I have learned everything from reading the forum before finally joining.

I have cancelled only one so far. However, I am about cancel some:
-Got Amex SPG and Amex SPG Business: I got the 30K bonus for each after meeting the minimum spend on both. I am thinking of cancelling the Amex SPG business before the 1 year anniversary so that I can re-apply after 12 months from closure. I thought that the account has to be closed for 12 months before I am eligible for the bonus again.
-Got the Amex Hilton with 40 K bonus only :( (could not get Amex give me the extra 25K) and will be upgrading to surpass soon.
-Got Chase Marriott with the 70K bonus (50K + 20K when I called in customer service). I am thinking of cancelling it also so that I can re-apply after 1 year.
-Got the Chase Priority with the 80K bonus (60K +20K after I sent a message through the website. I am thinking of cancelling it also so that I can re-apply after 1 year.
-Got the Chase Freedom with $300 cash back after first use. I am thinking of cancelling it also so that I can re-apply after 1 year.
-Got the Chase continental prior to the merger (got the 30 K bonus) and closed it almost a year ago.
-Got the Amex business, working on meeting the $10K spending to get the 75K bonus
-I cancelled the Amex Gold that I had for a very long time (probably that was a mistake) after getting the Amex business. I will re-apply in 12 month year to get the 25K bonus (and then cancel the Amex Business).
Cards on my list to churn: Amex Delta, Amex Delta business, upgrade to Surpass, then all the Citi cards AA and hotels.

I have been monitoring closely my credit score (still in the 700s) and never carry a balance on the card.
If the card has no annual fee, I can have multiple cards for the exact same type (2 or 3 Amex hilton and 2 or 3 Freedom cards as they don't have annual fees)?
In the case of Citi, we have to close the account for 90 days before re-applying?
Should I be cancelling per the above?

Thanks for your advice.

Yes, 12 months from closure. But close the personal one, the biz one has OPEN savings.


You will likely have to wait till one year since you applied due to a provision in the card act.

Bonus is down to $100. Keep it and use the 5% categories. Juice isn't worth the squeeze.

There are (at least) two things to consider...

The time between bonuses differs depending on the issuer and the card. In particular, Chase can be 2+ years after canceling certain cards. They will approve you with no problem but then send you a letter denying you the bonus. Others, like AMEX, will tell you right in the T&Cs how long you have to wait. Still others, like the Citi Hilton cards, it doesn't seem to matter at all if you ever cancel or wait more than a few months or not.

The best thing to do is carefully read each thread on each individual type of card. There are stories of personal experiences with re-applying, which will give you details that are more useful than blanket statements.

The other thing to consider is how your usage pattern looks to an issuer. If you get beyond the credit score, you'll find stories of people "blacklisted" because the only thing they do is hold every card a year or less. At some point, that could set off warning alarms that you aren't really a good potential customer, even tho your score is fine.

Part of your strategy should be to decide which you'll be holding and which you won't. If you try to strike a balance it can make manual reviews much easier.

i always paid in full. at the time, i called in to get credit increases only to maintain a high credit score.

MDtR-Chicago/dcpilgrim,
Thanks for your feedback! That is very helpful.

Keep reading and keep asking questions. There are a lot of people giving advice who are misinformed, but also a lot of people who are very well informed (MDtR-Chicago is one). You'll have to learn to sort through what's good and bad for yourself by learning.

I would keep and cancel differently than what you've listed above. Here's what I would do:

-SPG personal and biz: cancel both. I barely spend anything on those cards because I'm always meeting the minimum spend on other cards.

-Amex HH: keep. This is a no fee card that I'll always keep with Amex mainly to establish a longterm relationship with Amex, plus it gets me access to AXON awards with HH. I believe you can have both this and the Surpass card at the same time.

-Chase PC: keep. This card is more than worth it's annual fee because you get a free night in any PC hotel worldwide. $49 for a night in almost any decent hotel is a bargain, how much more so in some of the awesome InterContinental or Crowne Plaza that are apart of PC. On the other hand, I wouldn't necessarily discourage you from canceling this card if you're planning on getting the sign up bonus again. Just be prepared to wait 2+ years with Chase.

-Chase Freedom: keep. Now way I would cancel this card. You got the best offer that there was. You also get 30k UR points/yr by taking advantage of the 5x categories, all without a credit pull. 10k UR points isn't worth a credit pull. Definitely keep this one.

-Chase Continental: cancel. I canceled mine too. Not worth the annual fee. Hopefully you canceled before Chase merged this card with the UA card, so you can get the UA card later.

-Amex business gold: downgrade or cancel. Given that this was your oldest card, you shouldn't have canceled it.....except that it was an Amex so it's less of a big deal because Amex has a small little quirk about how they report the age of your accounts. It's likely that each of your Amex accounts will show an age equal to the age of your oldest account. So if you had this card for 10 years, even new Amex cards that you sign up for will show as 10 years old on your credit report. Even so, I still would have probably downgraded to one of the no fee business cards just to keep an ongoing relationship with Amex.


First, MDtR-Chicago was suggesting more that just not carrying a balance. He/She was suggesting that you pay your balance in full before your statement closes to keep utilization % low.

Second, a card's annual fee has nothing to do with how many you can have. Each bank (and each card even) has it's own idiosyncrasies that determine whether or not you can have multiple cards of the same brand. Citi seems to be the most liberal (careless?), allowing you to have multiples of the same card. Chase and Amex, however, are much more strict.

Thanks goAsia! I appreciate the thorough explanations.

A low Priority card annual fee gives you a free night at any IC. Wouldn't close it.

What are the benefits of closing all those accounts? If you want to avoid an annual fee and/or hope to get back on the wagon in 12 months, then go for it. It appears to be a valid strategy for Amex SPG, at least until/unless they change their T&C language again. With Chase that has way more goodies than Amex and City combined, I wouldn't close a card without getting another one from them. In any case, when you do close a card transfer your available credit to other cards.

noob question

What (paid or free) service do FT members use to monitor the hard pulls for app-o-rama and churning purposes?

Good and timely question. Before you even consider a paid service, the first 2 you need to sign up for are Credit Karma and Credit Sesame. Credit Sesame just announced their free monitoring service last week, I believe, while Credit Karma has been doing it for a while. So, you could start with these two.

Another thing to consider is applying for Discover Walmart card. No bonuses to speak of but they give you your true TU FICO score once a month for free.

thanks. just signed up for creditkarma. looks too flashy with all the bright graphics. i'm still finding some quirks in the amounts and don't know how reliable it is.

i had pulled all my free credit reports via annualcreditreport.com and also all 3 FICO scores via ScoreWatch's free trial. thus, i have a very exact and reliable picture of my credit history when comparing against creditKarma.

also had signed up for a 20k limit card which is not reflected in CreditKarma's balances (not sure why).

EDIT

nice. didnt even have to opt-into that feature on creditKarma.

If you're seeing 3 scores, they're probably not real FICO scores.

See: http://ficoforums.myfico.com/t5/Gene...de/td-p/662549

double checked my archived reports. it was only Equifax. not sure why i said 3.