If you love to travel, you know that costs can add up fast. Between the hotel and flights, you can easily spend $1,000 to $2,000 before you even set foot at your destination. This is where getting free flights and hotels can help offset the cost of travel.

One of the best ways to get free hotels and flights is by churning credit cards. Signing up for multiple credit cards can give you the points and miles you need to travel for free on your next vacation.

But is it a good idea? Credit card churning is not for everyone. Let’s go over the basics so you can decide if this makes sense for your situation.

Credit Card Churning Basics

Before you open any travel rewards credit cards to get a sweet sign-up bonus, let’s talk about how credit card churning works. This will help you maximize your rewards and get the best deals for flights, hotels, and more.

What is Credit Card Churning?

While I hinted at what credit card churning entails, let’s go over the basics. Many credit card issuers offer sign-up bonuses to entice people to open and use their products. These bonuses come with certain requirements, usually involving spending a certain amount of money on the credit card within the first three to four months of account opening.

Many hotel and airline co-branded credit cards offer sign up bonuses in points and miles that can be used toward free hotel stays and free flights. Other cards, such as the ones issued by Chase and American Express, use their own point system that can be transferred to hotel and flight reward programs.

Credit card churning is the process of repeatedly signing up for credit cards and completing the requirements so you can get a sign-up bonus. When you do this with several credit cards, you can rack up enough points for free flights and hotel at your next destination.

Does Churning Credit Cards Hurt Your Credit?

The short answer is that it depends. Every time you open a credit card, it shows up as a hard inquiry on your credit report. This tends to lower your credit score by a few points, but the drop is temporary. If you don’t go crazy by opening several cards at the same time, the effect should be minimal.

Provided you’re responsible with your credit card use, your score may go up when you open a new credit card. This is because it decreases your credit utilization ratio, which is the credit card and loan balance/total available credit.

For this same reason, your score may take a temporary hit when you close a credit card. Account age matters when calculating your score so keep at least one long-term credit card. This should improve your account age over time and positively affect your score.

The longer your credit history, the less impact opening and closing credit cards should have on it. However, if your credit history is already shaky, credit card churning can negatively impact your score.

8 Hacks to Help You Churn Credit Cards Like a Pro

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My husband and I have been churning credit cards for years. We have enjoyed tens of thousands of dollars in free travel over the years.

If you also want to try it for yourself and enjoy a free vacation, here are tips to help you get started.

Pay credit cards in full each month

One of the most important parts of credit card churning is being responsible. Do not attempt this hobby if you can’t pay off your credit cards in full – and on time – each month. Paying late fees and interest on your balance will negate any benefits of earning the rewards.

Only charge as much on your credit cards as you can comfortably pay before your statement due date. Don’t let the lure of free travel cause you to make bad financial decisions and carry a balance.

Make a plan for your points and miles

Before you open any credit cards, you need a plan for how you will use the rewards. This means picking where you want to travel and checking to see what airlines fly there. Also, look at hotel options and figure out how many points it will take to book them.

When you first start credit card churning, you must plan at least 12 to 18 months in advance. That’s because it can take an average of two to three months to receive a credit card sign up bonus so you can use it to book your trip.

If you’re looking to book free hotels and flights, you may need to open two to four credit cards. This number depends on how many people are traveling with you. For example, if you want to travel as a family of four, you must rack up enough airline miles for four round-trip flights.

Want more ways to stretch your travel budget? Check out these tips!

Only open credit cards if you can meet the spending requirements

Spending requirements for sign up bonuses can be high. On average, we’ve had to spend between $3,000 and $5,000 in the first three to four months. This can be difficult if you don’t spend enough each month to meet that requirement.

Keep in mind that this spending only applies to what you can charge on your credit card. This means spending like your mortgage or rent is usually out. Make sure you spend enough each month to meet the bonus requirements.

Try to time credit card openings when you have big bills to pay, such as the yearly home insurance policy or twice-yearly auto insurance.

Don’t spend just to get the sign-up bonus

Don’t increase your spending just to meet the bonus requirements. That’s a quick way to negate the benefit you’d be getting from the card. Use the credit card as you would normally and charge everything you can.

You will need to complete the spending requirements before the statement closing date during the third (or fourth, sometimes) month of account opening. Check your spending for each statement period when it closes and calculate how much you have left to spend. This way you don’t miss out on the sign-up bonus.

Mind the annual fees

To get the best credit card sign-up bonuses, you will need to consider cards with annual fees. Some credit cards waive the fee during the first year to entice people to sign up. However, others require you to pay it – and it doesn’t count toward your spending requirement.

If you’re not careful, the annual fees can add up. Sometimes, it makes sense to pay them since you get enough back in the form of rewards to offset the fee. However, in other situations, it makes little sense to pay them.

Stay on Top of Credit Card Offers

Credit card offers change all the time. If you see a hot offer, keep in mind it can be gone tomorrow. There’s an expiration date so make sure you apply before time runs out.

Check a few different websites to see what cards offer good sign-up bonus offers. Offers can differ between websites and you may get a better deal with some research.

Read the Fine Print

Before you sign up for a credit card offer, read the fine print. Make sure you understand all the credit card terms so you know if you’re eligible to receive the bonus. Many credit card issuers have a 24 month waiting period if you’ve opened a certain card before.

Other, like American Express, allow cardholders to earn a bonus only once per credit card per lifetime. You will not be eligible to get a credit card bonus again for the same credit card.

Credit card terms are always subject to change so read them every time you apply for a card, even if you’ve had it before.

Get familiar with the Chase 5/24 rule

The Chase Ultimate Rewards program is one of the best and most flexible options. Points from the Ultimate Rewards program can be transferred to popular airline and hotel partners such as Southwest Airlines and Hyatt.

Since more people are getting into the credit card churning hobby, Chase introduced rules to make it harder to earn rewards. Chase will not approve you for a new credit card if you’ve opened and/or closed more than five cards in the last 24 months.

What does this mean for you? Try to apply and get Chase Ultimate Rewards cards such as the Chase Sapphire or Chase Business Ink before going for other credit card offers. Not all Chase-issued cards are affected, but this rule encompasses all Ultimate Rewards cards.

When is it a Bad Idea to Churn Credit Cards?

Credit card churning is not the right hobby for everyone. There are certain situations when it’s best to wait or not get started altogether. Here are several situations when it may be a bad idea to open reward credit cards.

You don’t pay your credit cards in full each month

If you carry a credit card balance and can’t pay your bills in full every month, don’t open new credit cards. You need to be responsible with your debt and be able to pay everything off monthly for this hobby to be worth it.

Carrying a credit card balance and paying interest and fees negates any free travel you earn. Get your finances under control before attempting credit card churning.

Ready to tackle your credit card debt? Here’s how to get started

If you can’t spend responsibly with a credit card, avoid this altogether. It’s much easier to spend money using a credit card since you don’t feel the pain. A study by ValuePenguin found that people were willing to spend up to 83 percent more when using a credit card. This can cause you to rack up thousands of dollars in debt.

If you have a problem with credit cards, consider a different way to pay for travel. Get a side hustle and use the money to pay off your debt and save up for your next big adventure.

Your spending is too low

If your monthly spending is low, it may limit you when it comes to credit card churning. Most credit card sign-up bonuses have steep spending requirements, often to the tune of thousands of dollars in a few short months.

Since paying your mortgage or rent with a credit card is often not an option, it difficult to spend enough to meet the requirements. Before you open a new credit card, look at your statements from the last three to four months to get an idea of your average spending.

If you can’t meet the spending requirements based on your regular spending, don’t sign up for the card. Look for cards with lower spending requirements. You can time a card with a larger sign up bonus for a month when you have to make a large payment such as an annual insurance premium or a medical bill.

You plan to take out a big loan soon

Do you plan to buy a house or take out a major loan in the next 12 to 18 months? It may be a good idea to hold off on opening new credit cards. Having so many hard inquiries for credit card issuers on your report may be a red flag for lenders.

Even if you pay your bills in full each month, having access to so much available credit can also be problematic. Lenders consider it risky when you have the option to spend tens of thousands of dollars.

You don’t have credit history

If you’re new to credit cards, hold off on credit card churning. Without a credit card history, credit card issuers will be leery of extending you credit. They like to see a history of consistent payments over several years so they have the confidence you can pay your bills.

You also need a solid understanding of credit cards, which comes with using them. Work on opening one credit card first and paying it off each month to build your credit history. The more you use credit cards, the more familiar you will become with credit card terminology.

Once you have a solid understanding and have built sufficient credit history, you can check out a couple of reward credit card options with low spending requirements.

The Bottom Line on Credit Card Churning

Credit card churning is a great way to stretch your travel budget. Getting the right credit cards will give you access to free hotels, flights, and travel experiences. However, use credit cards wisely or you risk negating all the benefits of those sign-up bonuses.

Getting the right credit cards takes research and organization. Stay on top of your bills and pay your bills on time every month. Keep up with current sign up bonuses so you can jump on good deals that fit with your travel plans.

Have you tried churning credit cards? What was your experience? Share in the comments.

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