lazyy

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!

djrez4

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.

lazyy

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?

gk17

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.

dcpilgrim

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.

AscorbylPalmitate

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

deant

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).

AscorbylPalmitate

what constitutes an app cycle? 6 months?

gk17

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).

AscorbylPalmitate

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

deant

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.

AscorbylPalmitate

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

MDtR-Chicago

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.)

mnscout

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.

Tr60

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.