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Why don’t I write more about credit card ‘churning’?

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I had an email from a reader recently who asked me about how easy it was to ‘churn’ various credit cards, ie cancel them and then reapply, picking up another sign-up bonus.

He suggested that I write a specific article about it. I said that I wasn’t keen. However, I then had second thoughts and decided to write a Head for Points post to explain WHY I didn’t want to write a specific post about card churning.

The main problem with writing about churning is that, apart from American Express and Lloyds, the card firms generally do not publish their policies.

American Express is very clear. For the Gold and Platinum cards, you can have the sign-up bonus as long as you have not “hold or have held any Membership Rewards enrolled American Express Card in the past six months.” For the BA cards, bonuses “are not available if you currently hold or have held any other British Airways American Express Cards in the past 6 months”. Easy.

Lloyds is also very clear, in a very bad way. For the Avios Duo cards, “Customers will only be eligible for one joining bonus from Avios. In the event that a customer re-applies for the Premier Duo Avios Credit Card Account or upgrades from a Lloyds TSB Duo Avios Credit Card Account, Lloyds TSB may process an application and issue the Premier Duo Cards but Avios will not award a further bonus offer.” You need to pick the offer you accept very carefully, because you won’t get another shot unless you apply via your partner.

Barclays, issuer of the Hilton and Priority Club cards, has no stated policy. MBNA in general also does not make any statements about this.

How do Barclays and MBNA react to churning?

There are good reasons why I don’t write about churning MBNA and Barclays cards – I simply don’t know the answer.

MBNA can be very flexible when they want. I just got the American Airlines card, for example, despite having a ludicrously high credit limit on my MBNA BMI MasterCard. This is almost certainly due to the fact that I am a heavy BMI card user over many years and MBNA doesn’t want to annoy me. It is difficult to imagine anyone who got an MBNA card two months ago with a £20,000 limit would be able to get another MBNA card today with a £10,000 limit.

Recent comments on Head for Points by readers suggests that MBNA is starting to get tougher on multiple bonuses. There have been reports of readers denied the bonus on the Miles & More and American Airlines cards because they once had them many moons ago. It is not clear if this is now policy or just certain readers getting unlucky.

I have also had the Hilton card in the past, and my wife currently has the Priority Club card. This take me to a key point – I am not a heavy churner myself. What I tend to do is apply myself one year, my wife the next year, and then myself the next year. This leaves a 2 year gap between applications in the same name, which is not exactly pushing the boat out.

I also don’t like to encourage aggressive card churning via Head for Points.  I treat miles and points as a long-term game. I want to keep all of the card companies on my side for many years to come, so I don’t want to push my luck with any of them. No sign-up bonus is so big that it is worth getting secretly blacklisted by the issuing company, as you will only end up worse off over the long term.

There is, frankly, no point in trying to set a British record for churning the maximum number of credit cards within a year. Pace yourself! It will pay off in the long run.

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Comments (29)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Russell Evans says:

    What is the policy on referral/sign up bonuses for Amex if I am the primary card holder with my partner as a secondary, I refer her for her own card, will I get the referral bonus and she get the joining bonus provided she’s not held one of these cards in the previous 6 months?
    Also, slightly OT but do you lose your BAPP Amex 241 voucher if you cancel the card before redemption? Sorry, i’m new to this!

    • Mr Bridge says:

      you would get the refferal bonus as long as your wife has not held a MR card within the last 6 months.
      Raffles has previoiusaly written about the 241, you will loose it if you have not used it, and you will lose it if you have booked and then need to cancel

    • Tom H says:

      Is there a limit to the number of referal bonuses one can get from Amex?

      • Rob says:

        No, it seems not. I know some people rotate Gold cards – one get it, refers partner, cancels own card, waits 6 months, partner refers original cardholder and repeat. How long can you do this? Who knows?

        One key thing, of course, is that Amex obviously fully funds sign up bonuses itself. The MBNA / AA promo, for eg, is jointly funded as AA benefits from its revenue share long term, and often the sign up is 100 per cent funded by the airline or hotel. As Amex fully funds the bonus, they have more incentive to pull the plug on you.

  • Squillion says:

    Just to be absolutely clear about it: can I get a sign-up bonus by taking out a BA Amex card even though I already hold an Amex Gold charge card? (Ie is the BA Amex card in the Membership Rewards scheme?) Thanks.

    • Mr Bridge says:

      yes, you can, but you dont get the sign up bonus if you wont for another card in the memebrship rewards scheme.
      You will get more points if you are refered, which raffle can do for you

    • Rob says:

      Yes, you’ll be fine.

      The only cards that give Membership Rewards are Centurion, Platinum, Gold and Green Amex.

      • Nick Burch says:

        And the Platinum MR Credit Card! (Though you do need to have the Platinum Charge Card to get it). It’ll be interesting to see just how independent that one is when someone who has got one decides to cancel the plat charge card…

  • Mr Bridge says:

    Raffles is right, you should not get too carried away with churning. This can affect your credit rating(applying for too many cards), thus limiting your ability to reapply anyway.
    A point (tip) that does not come up very often, is when churning/ canceling a card, you should always keep a card open with that provider.
    For example, myself and my partner churn’n’switch plat Amex every other year, but we keep BA amex open all the time( the fee free one we dont use, and the BAPP use just for the 241).
    The reason to do this is so you dont have to get a wriiten statement from the queen to prove your identity every time you reapply.

    • Sir Stamford says:

      You are unlikely to be asked to prove your identity EVERY time you apply for a credit card since the provider can usually establish this from your credit records and from the electoral rolls.

      I will only retain a dormant (or semi-dormant) account if it continues to provide me with a travel or monetary benefit which I value.

      Sir Stamford

      • Mr Bridge says:

        I disagree, amex, in particular want original documents and won,t accept statements printed from online banking. A lot stricter than other providers.
        This is to comply with money laundering regs
        Why not keep an account if there is no fee?
        You can reduce your credit limit down, if you think it may affect your future applications

        • Rob says:

          I admit, in my experience, having a long standing approach seems to make it easier to take the pxss a little. I have had Amex cards for 15 years and MBNA cards for 7+ and neither has ever stopped me churning other cards in their portfolio.

          They may take the approach that I am a good customer and if allowing me the odd churn is what it takes to keep me on side, then its a price they will pay. The bulk of a sign up bonus is funded by the loyalty scheme anyway.

        • Sir Stamford says:

          How strange, I never had this problem with any provider including AMEX.

          When I applied for my first ever card with AMEX, I was approved straight away during the online application process. With my second card with them, I didn’t get an instant approval but the approval did come through within a week without the need to submit any documentation.

          So, unless you have gaps in your credit records or not registered in the electoral rolls, my recommendation is still to close any dormant accounts. I realise that not everyone shares my view.

          Sir Stamford

          • Mr Bridge says:

            Myself and my partner both had plat amex, but no other cards with amex.
            when they announced the fee would increase to £450, we decided to close my account, and i would have a sup card on my partners card.
            Despite being a member for 19 years previous
            not having moved address
            only been without an amex for 10 months
            and the fact amex send me my sup card to my address:
            when we decided that we would flip amex still required me to prove my ID, and only stopped short of a dna sample

  • Mark says:

    I’m new to all of this and was wondering for the period that you do have these cards, I presume you pay off the balance in full every month to avoid any interest charges? If so, why would they want to keep you as a loyal customer when they’re not making any money from you??

    • Rob says:

      Amex takes 1.5 to 3.5 per cent of everything you spend from the store, remember.

      Frequent traveller types are generally well paid professionals. The credit card companies love people like this.

      Remember that the average salary in the UK is £26,000. If you are on an average salary, you might spend £500 a month on a credit card – you don’t have much money left after mortgage / rent. This is not a massive earner for the card company.

      A heavy travelling businessman may be earning £80,000 plus charging a few thousand pounds a month of business expenses to a personal credit card. This is the customer everyone wants. And a sign up bonus is the way to get them onboard.

      And remember, for every churner, another 5 people will take up the same offer and keep the card for a decade.

      Frankly, you also need to offer an incentive. Why else would you bother to switch cards if you clear your balance and don’t care about the interest rate? Getting a new main card can be a pain, especially as so many websites now store your card number, which encourages you not to switch cards.

      • Sir Stamford says:

        I would have thought a heavy travelling businessman earning £80k and charging a few £k a month of business expenses would be provided a company credit card in most cases.

        Two of my last employers earn a nice rebate from the company credit card spending and they absolutely insist that business expenses are made using the company credit card unless in special circumstances.

        Sir Stamford

        • Rob says:

          Some do, some don’t. HSBC, when I was there years ago, wanted you to use your own card – helped cashflow and, I think, mentally stops you putting through silly charges because you took the risk of them not paying. Its a different mindset to running up a company card and risking they ask you for the cash later.

    • Al says:

      They might not be making money on interest, but I’d guess they’re still making money from you using the card. I’ve read that an Amex card typically costs a retailer 4% in transaction fees. That’s obviously not all profit, and I’m sure the bigger retailers have negotiated a smaller fee, but it’s probably enough to pay for the occassional bonus.

  • Mark says:

    Ah right – great points there. Thanks guys!

  • BP says:

    If it offers insight into the murky MBNA policy i have been approved for both the Virgin Atlantic (white, purely to earn something on non-Amex spend) and AA cards within 3 months of each other with a combined credit limit of £22.5k. I had expected having read many of your posts to have to call them and cut my VA limit in order to secure the AA card with this being is in addition to carrying Amex Gold, Amex SPG, both the HHonors and a standard Barclaycard Platinum, the Halifax Clarity* purely for ForEx. So as a relatively new customer for MBNA i dont seem to have reached their limit yet (though will probably retire the VA card anyway as the tesco card offers a marginallly better return for earning VA miles with nonAmex spend).

    *ps i havent seen the Clarity mentioned a lot on here when mentioning forex spend – for obvious reasons i’m sure as its not a rewards card – but worth mentioning in the context of weighing up the value of Foreign transaction spend bonuses. We did a like for like comparison earlier this year buying two identical products (ski passes) at exactly the same time in EUR, one settled with Amex Gold and one on the Clarity. For this transaction the clarity worked out at 4.2% (over £9) less in sterling when they posted on our statements (it offers commission-free spend which accounts for the first 3% of that but we weren’t aware that the exchange rate as set by MC was that much more favourable than Amex’s) . If you value a MR point at 1p the Amex points for this transaction (EUR250/£215 at the time) would be worth apprx £4.30, less than half of the cash saving made with Halifax card. With no ATM charges its also useful for cash withdrawals abroad for which (assuming you pay off the day it appears on your balance to avoid daily interest charges which would clearly wipe out any benefit – and worse) you get a cent or so off the market midrate and far better than any forex company i have used. 3 weeks of cash withdrawals on another trip coupled with prompt repayments accrued a total cash advance interest charge of £0.18. Thoroughly recommended for foreign transaction spend.

    • BP says:

      Apologies, am a relative newcomer to the blog (this year) and i see in your archive a post re the clarity & other FX-free cards from last Sept, though hopefully the LFL comparison may still be of use to any other newbies!

  • Cardiff John says:

    I need to get another 20k Advantage miles over the next year and already have the MBNA Cards. Are there any other cards that give advantage miles here in the UK. Will any of the USA banks issues cards to people living here?

    • Cardiff John says:

      Raffles, you’re wonderful, this is the plan for me. I will apply for the Amex Gold next month, can you refer me? Then I will wait a few months to spread the spend limit before apply for the SPG. Thanks

  • Rob says:

    A few people have mentioned the Aqua card, which does seem to be a decent deal if used properly. I do try to stop Head for Points drifting into moneysavingexpert territory, though (although I wouldn’t say No to £87 million ….!) which is why you won’t see a full post on this. Happy to discuss it as part of the wider debate on what card to use where, though.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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