Credit Card Churning: Guaranteed, Minimal Risk, Passive Income

In the previous post, we talked about how credit card companies make money off you. However, being the frugal hackers we are, we can exploit the incentives credit card companies put out to get people to spend more than they should. Instead of giving the credit card companies what they want, we instead take advantage of all these great offers and sign-up bonuses and just not spend anything extra at all!

Credit card churning is the process of signing up for 3-4 credit cards a year in order to take advantage of all the signup bonuses. Churning is a well-known technique in the personal finance world and can be achieved by simply moving your regular expenses around between various cards. If you put all your cards on Apple Pay (or Android Pay), you don't even have to carry all the cards with you in your wallet. You can easily choose the right card at checkout as you scan your phone.

The sign-up bonuses for some of these cards can be insane, and all you need is a good enough credit score to be eligible. Usually 700-720+ should do. When you spend x dollars in x months immediately after signing up for a card, you get a huge sign-on bonus in the form of points. If you give a copy of your card to your spouse and they make a single transaction on it, you get even more points. There on after, you get a certain amount of cash or points for every dollar spent. This can be anywhere from 1-5% of your money spent returned back, for free.


You can then rinse and repeat the same process for your spouse as well. Together, if you and your spouse can collectively switch your spending to one card at a time, the rewards can be pretty phenomenal. If the credit card company charges extra for a 2nd card, we just add the first card to both our phones' Apply Pay and pay with that so we don't both need to have physical access to the card at all times.

Here at Frugal Hackers HQ, we don't care too much about the ongoing points since our expenses are pretty low and so the rewards amount to not more than $50-70 per month (roughly 2-4% of our monthly spending). But we do care about the initial sign-on rewards which can be pretty darn good if you stack them in order.

Your credit limit is not affected too much if you do this slowly and continuously. 3-4 cards isn't too excessive. And you can signup for the same card again and again for the same benefits as long as you wait for a year between signups. While you're waiting, sign up for it anyways, but on your spouse's name :)

Credit card churning is the easiest side-hustle there is out there. It's easy, requires no real skills, is minimal risk, and provides a constant flow of passive income for you to spend on travel and hotels.

These days, Mrs. FH and I credit card churn among the following Chase credit cards (some of these are referral links):

  1. Chase Sapphire Preferred - 50,000 bonus points on signup
  2. Chase Sapphire Reserve - We made $2700 in one year out of this one card alone!
  3. Chase Freedom - $150 signup bonus, 5% cash back in bonus categories
  4. United MileagePlus® Explorer - 50,000 bonus miles on signup
  5. Chase Amazon Rewards Visa Signature - 5% Amazon cash back

View a list of all Chase credit cards here. There's just too many to list. And the credit card industry is so big that even your corner store is willing to issue you a credit card. Rotating between 5 cards is work and hassle enough that we probably don't want to add more cards to the mix. We prefer to stick with Chase cards as much as possible because we bank with them, and Chase makes managing multiple credit cards extremely easy, and from one place.

Before you engage in any big purchase (like a $1000 TV, a $2000 bicycle, etc.), you should always be thinking what credit card to sign up for right before the purchase so you can take advantage of the free bonus sign-on points. If you're one of those lucky people who gets to pay rent with their credit card without transaction fees, I'm envious of you!

So what are we doing with all these freebie points?

This year, we booked 5 free trips thank to our credit card rewards. Two return tickets to Peru and back in August so we can go trekking in Machu Picchu. Another two return tickets to Calgary and back so we can go backpacking/camping in Jasper and Banff (beautiful national parks in Alberta, Canada). In fact, we're heading out there this very Thursday for a week! Another return ticket by Mrs. FH all the way to India to attend her grandfather's 80th birthday celebrations. We still have more points left over from rewards, but not enough vacation days unfortunately! We'll find a way to utilize them next year, especially since they don't expire.


Are you ready to hack the credit card system?

After all, this blog is about hacking the system, so whether you feel guilty or not, credit card hacking is definitely a profitable venture if you're like us and don't spend a single dollar more than we can afford to, and always pay off our monthly balance on the day it's due. So far, neither Mrs. FH or I have expended a single dollar in credit card interest. And we'd like to keep it that way.

Just keep the source of all these free points and rewards at the back of your mind if you plan to engage in this messy and temptation-inducing game. The 2 rules of the game are: 1) Do not fail or forget to pay a credit card balance therefore incurring interest (use auto-pay). And 2) DO NOT spend money just to acquire points or to meet the minimums required for the sign-on bonuses. Neither of these two are going to be mathematically profitable for you. That would be like consuming more just so you can go back and buy cheap groceries from Costco.

If you cannot meet the minimum 3-month spending necessary for the sign-on bonus, you could looking into buying gift cards, especially Costco or Walmart gift cards, thereby delaying your actual purchase to a future date.


What are your favorite Chase credit cards? Tell us below so we can add them to the rotation later this year.

Mr. Frugal Hacker

Born in India. Grew up in Dubai for 15 years. Studied and lived in Canada for 8 years. Backpacked in Europe for 2 months. Lived in Toronto for 1.5 years. Working in San Francisco for the past 4 years. Runner, cyclist, software engineer.