Many card users have learned to beat the card issuers at their own game through credit card gaming or churning with Loyalty Reward Cards. This risky practice can lead to great rewards, but it’s not a simple venture, and the uninitiated can ruin their credit and severely damage their financial future.
Also referred to as churning, credit card gaming involves the use of multiple loyalty reward cards for the sole purpose of earning rewards. These gamers earn trips, cruises, merchandise, cash and more through numerous points, miles and cash back offers. Essentially, a churner earns intro bonuses and spending rewards, cashes in, and then closes the accounts before incurring any fees or interest rate charges.
Skilled gamers identify a specific goal and then go after it with carefully selected top credit card reward programs to accrue their rewards. Though the goal is typically the accumulation of points/miles/cash, some card holders use the practice to help address their debt. They do so by moving their large balances to Loyalty Reward cards with long introductory 0% APR’s so they can pay down the principal without accruing additional interest rate charges.
The most important thing to note about traditional credit card gaming is the avoidance of carrying balances. IT WILL NOT WORK if you don’t pay your credit card balances every month. Winning strategists use their high rewards yielding cards to make eligible purchases for services and products that are a normal part of their budget. They earn the rewards and pay the credit card statement each month.
These are common expenses gamer charge to their loyalty rewards cards to earn points/miles/cash back:
Note this is difficult, although there are work-around. It can be expensive via associated fees through a necessary third party vendor, and not all cards and lending companies allow it or even award points/miles/cash back for these expenditures. AmEx is definitely out. For cards that do allow this practice and offer rewards, it can be an effective way to meet the spending threshold for an introductory signing bonus. Everyday spending is typically a wash however, since the fees are often the same or higher than the amount of awards you can earn.
A disciplined and experienced gamer will use these strategies to earn rewards without making foolish expenditures and sinking into debt. Another essential requirement is excellent credit. Clearly, you cannot qualify for multiple loyalty reward cards unless you can demonstrate credit worthiness.
Unfortunately, the typical consumer struggles with debt. This makes credit card gaming a dangerous venture for most. The following are just a few of the important topics and potential issues related to this practice.
Though enticing, churning can be chancy and difficult. It’s foolhardy to risk your financial future just to earn a vacation or cash that you plan to blow through. If you want to try your hand at gaming, ensure you have the discipline and organizational skills to follow-through successfully. In the long-term, the impact on your reputation, and the ability to qualify for a car loan and a mortgage are far more important.
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