Card Churning Explained

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Card churning is the term for when you frequently open new credit cards, often with the intent to game the system. Basically, to get new cards, get the sign-up bonus and then move on to something else. And while it totally makes sense to sign up for a new credit card from time to time, you don’t want to overdo it. There can be real consequences to credit card churning if you take it to the extreme.

So what you want to do is to spread out your credit applications. I would say: Apply for credit no more than once every six months or so. Because if you’re applying more often than that, all of these hard inquiries on your credit reports can stack up. They can make you look like a risky, desperate borrower, they can trim points off your credit score, there’s also the issue of the average age of your accounts and that’s going to be lower and lower as you continually open accounts.

Some credit card companies even have policies where they’ll reject you if you apply for too many cards all at once. Or they’ll even try to claw back the bonus if you do things like buying too many gift cards or closing the account before a year has elapsed.

Again, new credit can totally make sense from time to time. Don’t overdo it, though. Space it out. Make sure you’re playing by the rules, protecting your credit score and staying in these card issuers’ good graces.

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