First off, let me start by saying I am really excited to finally be putting “pen to paper” on this series! Travel hacking, and more specifically credit card churning, is one of my few true hobbies, and I love to discuss it any opportunity I get. You may remember me chatting about how many points I’ve earned in the past…and it was all from points earned on my credit cards. Spoiler alert – I will have my Q4 2017 points recap up in January, so stay tuned for that 🙂
Travel hacking has allowed me to travel for free (or practically free) multiple trips per year for multiple years! It’s an underutilized hobby that many could benefit from, if they had the right know-how to manage it appropriately…which is where this series comes in.
I wanted to begin this series by getting in to the very basics. I’m going to start off assuming you have no idea what travel hacking is, then build from there. We want to make sure we have a solid foundation to build future travel hacking strategies off of.
What is Travel Hacking?
Travel hacking is mastering the art of navigating the universe of free, or extremely low cost travel. Travel hacking includes a variety of methods, including glitch fares, maximizing loyalty rewards accounts, credit card churning (my personal fave), obtaining elite status, etc. But what all these methods have in common is that they are means to achieve the same end goal: free or extremely discounted travel.
What is Credit Card Churning?
Credit card churning is a travel hacking strategy that includes repeatedly opening (and closing, when appropriate) credit cards to earn the large sign-on bonuses offered. This is my preferred method of travel hacking because it allows you to rack up significantly more rewards points than you’d get if you stuck with earning on paid travel alone. You can also combine multiple strategies to boost your accounts even farther…but more on that in a future post!
Who is Credit Card Churning For?
Credit card churning, at its core, is really simply for people who want to travel, but don’t want to pay full price for it. An added bonus to this hobby is that it’s also a great tool for building or maintaining positive credit history while still achieving the number one goal. So is that it? I just need to possess a desire to travel on the cheap and that means credit card churning is for me? Not quite…
Who is Credit Card Churning NOT For?
While the desire to travel is definitely a pre-requisite, it is not on its own enough to make a determination if credit card churning is right for a person or not. While credit card churning can be a fantastic hobby for a variety of people, a gut check needs to be done to honestly ask yourself if it’s right for you. A person should NOT get into churning if they are currently:
- Someone with a current credit score that is not in the “good” range or above (i.e., 699 or lower)
- Someone with existing credit card debt they are not able to pay off
- Someone who’s looking to finance a major purchase (i.e., a home) soon
- Someone who is not able to manage their credit card spending appropriately
- Someone who is currently living above their means
- Someone who doesn’t spend enough to meet the minimum spending requirement
- Someone who has never had a credit card
You get the point. Luckily being in any of the above categories currently doesn’t mean you can’t try credit card churning in the future by any means! I knew I wanted to get in to this hobby years before I finally did, and that’s because I recognized I needed to improve my personal finance situation before getting into the world of credit card churning. So I worked on it, improved what I needed to, then jumped in and have never looked back!
Debunking Common Credit Card Churning Myths
Don’t you love how we’ve become a society of people who provide strong opinions on topics they know very little to nothing about? This hobby is no different. You may find when talking to family and friends that they will be quick to share opinions about what they think of this hobby, despite never having done it themselves. All it takes is a little bit of research to determine that the below “concerns” are really myths as long as you manage this hobby appropriately:
- It will hurt my credit score when I open new cards – couldn’t be farther from the truth! Again, as long as you manage this hobby appropriately (see above) the impact to your credit score is negligible. You may see a few points drop, but in my experience your score will be right back up again the next month.
- It’s too complicated / takes too much time – I plan to get into this in detail in future posts of this series, but this hobby doesn’t have a huge time commitment. Sure, you need to put in some time to research the right card, and track your spending to ensure you hit the minimum spending requirement by the deadline…but that’s really it.
- Credit cards are bad (mmmkay) – credit cards get a bad rep because SO MANY people, especially in the US it seems, bury themselves in credit card debt by living above their means. Again, as long as you are able to manage them appropriately, credit cards are a fantastic financial tool.
- Travel hacking is “breaking the rules” – absolutely false. Credit card companies created the system, and credit card churners are working within the constructs of that system. The credit card companies get revenue through transaction fees on every purchase made, and we get to enjoy points in exchange. It’s a mutually beneficial system that too many people don’t take advantage of.
- The best way to earn miles is through paid travel – as someone who regularly travels on paid flights for work, I can unequivocally tell you this is false. Sure, it helps if you can use both methods to boost your account balances, but I earn FAR MORE points (and more quickly!) through travel hacking than I do through my paid travel.
So there we have a solid foundation in to the world of credit card churning! Next in the series we will discuss topics such as the ins and outs of your credit score, how to get started in credit card churning, winning strategies for managing this hobby, how to track once you have multiple cards, etc.
In the meantime, I would love to hear from you! Is credit card churning something you are already doing, or would like to consider in the future? Let me know…comment below!
Happy traveling 🙂