“Credit card churning? Free travel?! Dave, these buzzwords are too much. You’re losing your credibility!”
Fear not, frugal reader! Despite the buzzwords, this is in fact a legitimate method for enjoying life’s luxuries without paying for it.
Yes, You Can Travel For Free With Credit Card Points
I thought it was a bit sketchy when I heard about it, too. But then I took the plunge and got to enjoy some really great trips while paying little or no money. It was actually free travel. I’ll get to the trips in a bit, but let’s cover the idea behind credit card churning first.
Credit Card Churning 101: The Basics
The main focus of credit card churning is very simple. Find the cards with the best sign up bonuses, get approved, spend enough to capture the bonus, and cancel the card once the points are used. I’ll highlight each of these in a little more detail, but first I want to call out something very important.
Credit Card Churning Is Not For Everyone
This is an important point because credit card debt is a very big struggle for many people in America. Some interesting statistics on credit card debt:
- The average credit card debt in 2021 was $5,525
- 6% of credit card debt was greater than $10,000 (that’s over 14 MILLION people!)
- Nearly half (49%) of all Americans need credit cards to cover essential living expenses
- Only 33.7% of Americans with credit cards pay off their balance in full every month, according to the American Bankers Association
Credit card debt is a monster that you just don’t want to feed. Considering the stats we just went over, it’s clear that this credit card churning thing isn’t for everyone.
An Important Note
If you’re one of the many that are less than optimal with your credit cards, here’s what you should be doing before taking the plunge into credit card churning.
- Clear up your debt situation! If you have revolving debt (credit cards, student loans, anything with high interest >6%), it would be wise to knock that out first. You should be prioritizing your own financial mindset and security before trying to game any systems.
- Your credit score must be in a decent state. Cards like the Chase Sapphire Preferred are likely to disqualify you if your credit is lower than 700.
- Have a budget in place, or at least be conscious of your spending. Credit cards can be an amazing tool, but they can also quickly “spiral out of amok”. If your spending isn’t tightly controlled, you might find yourself with a bunch of high-interest credit card debt that you can’t afford.
- You need to be able to pay off your statement balance in full every month, no questions asked. Credit cards have some of the most punishing interest rates in the business. We’re trying to improve your life by taking advantage of bonuses, not introduce more financial struggle.
Got that all in line? Great! Now that the cautionary stuff is out of the way, let’s talk about how you can take advantage of these awesome programs.
Find the cards with the best sign up bonuses
Maximizing the value for your effort is always going to be a focus for us savings-oriented folks, right? That’s why we’re covering this first. You could technically sign up for any old rewards card that sends you a flyer or email, but that wouldn’t be getting the best offer available. That would be lazy, and we just don’t do that!
Instead you should visit a site that shows you the current cards, their point bonuses, and annual expense. The Mad Fientist has this amazing dashboard set up with CardRatings.com to give you everything you’ll need to make an informed decision.
What should you focus on? Well, that depends on your use case and plans for the points. There are options for personal and business, travel and cash, no annual fees and high annual fees, etc. My recommendation is to look at low-fee cards focused on travel.
Why travel cards? Well, companies like Chase and Capital One give you more for your points when you use them to book travel through their online portals. I prefer Chase Sapphire Rewards and Capital One Venture Rewards.
Why Chase Sapphire Preferred?
Well, Chase consistently provides the best bonuses you can get (currently 60,000 points, or $1,200 in travel). On top of that, their rewards program is great for continued use and the annual fee is $95/year.
Why Capital One Venture Rewards?
Capital One Venture Rewards also provides great bonuses (currently 75,000 Capital One miles, or $1,050 in travel). Their portal not only allows you to book travel through Capital One, but you can also use the points to pay for qualified purchases you’ve made on your Capital One card. Oh, and their fee is also a reasonable $95/year.
Beware The Chase 5/24 Rule
Something to note before going ham on these cards. Chase, one of the most lucrative card providers, has a particular restriction: you can’t have 5 new card accounts opened within a 24 month timeframe if you want one of their cards.
Because of this, it’s recommended to avoid opening cards for yourself more than once every 3-4 months. There is a little hack that you can find at the end of the article if you’re married, though!
Hit The Required Spending To Capture the Bonus
So how do you actually get the bonus? I mean, the two that are listed above (Chase and Capital One) require $4,000 spent in the first 3 months! I don’t have that much extra to spend – am I out of the running for this?
Thankfully, no! At least, not necessarily. Everyone’s spending is different, so your mileage may vary, but consider your everyday expenses. If you have a tight budget set up you already know what you’re spending (and if you don’t, check out our guide here!), so you can quickly look to see if you can hit the minimum spend in 3 months.
The key here is to remember that it doesn’t need to be extra spending! Take your bills, for example. If you pay for them with another card or a bank account, change them to the card. There are a lot of bills you might not think of.
- Gas? Check.
- Electric? Yup.
- Internet? Absolutely.
- Childcare? Let’s go!
- Car insurance? Yeppers!
- Out of pocket medical expense before that deductible is hit? Easy boost! (Just make sure you can still pay it off with your savings)
- Mortgage/rent? Maybe, depending on your lender or landlord.
These are just a few examples, of course. The point is that there are many regular expenses that can bolster your spend toward that minimum amount. The key (for my family, at least) is to transfer all spending to the new card once it’s opened. We stay frugal and still focus on saving money every step of the way, but we’ve never had an issue getting to the minimum spend quickly.
The Cards I’ve Used
As you can probably guess, I’ve made use of Chase Sapphire Preferred and Capital One Venture Rewards. These have been great and paid for the trips I’ll go through in a minute, but we haven’t branched out past them. Our focus has been elsewhere, and keeping up on the credit card applications fell to a very low priority.
That changes now, though! We’re going to be picking it back up to make sure we have plenty of opportunity for free travel in 2023. I’m currently eyeing the Citi Premier Card, which is currently offering 80,000 Citi ThankYou Points (or $1,360 in travel) for $4,000 spent in 3 months. Let’s go!
My Free Travels So Far
All right, here are the trips I’ve taken using my bonus points.
- Me: Trip to Miami, Florida for an Air Force bro reunion
- Flight and hotel fully paid for
- Me: Trip to Portland, Oregon to see a close friend from the Air Force
- Flight fully paid for
- My wife, daughter, and I: Trip to Denver, Colorado to see my brother and his fiancé
- Flight and hotel fully paid for
- My daughter and I: Trip to Seattle, Washington for family reunion
- Flight and hotel fully paid for (but WOW, Seattle is stupid expensive to fly into)
- My wife, stepson, both daughters, and I: Trip to Disney World (Orlando, FL)
- Yeah, we did this with points too. Flight fully paid for (lodging would have been paid for as well if I’d known about tip #2 below!)
Won’t This Hurt My Credit?
In my time doing this, my credit score hasn’t been affected at all. I even had a case of fraud that took my score way down, from over 800 to the high 600s. After contesting the issue and following up with the authorities, I’m back up to the low 800s again about 8 months later.
One nice thing about the whole FIRE mindset is that I don’t take out a line of credit to pay for anything. No car loans, no phones on a plan, nothing. Even when fraudulent activity tanked my credit score, I didn’t sweat for a second because I don’t pay for anything unless I can afford it in cash today.
Final Tips
All right, the last little nuggets of information incoming.
- If you’re married, only sign up yourself or your spouse for each card! If you put in their social security number and have them on the application it will count toward their Chase limit. If you add them as an additional card holder after the fact, though, they can open that same card up once you’ve gotten the bonus.
- Booking to locations like Disney World is possible using points, but the purchase must be made through a qualified travel agency that counts toward that credit card’s travel policy. We booked our tickets through Disney’s website instead of a qualified travel site, so I wasn’t able to redeem the purchase with Capital One’s program. I could have gotten them for free as well if I’d known this ahead of time!
