Credit cards are an excellent personal finance tool you can use to help manage your money, improve your credit, and boost your long-term financial health. Credit cards are also convenient, allowing you to shop safely online and even make money on the spending you do, such as cash back, airline miles, and more.
This last major benefit of credit cards — the ability to earn rewards — has led to a surge of popularity in recent years. Because of this, people routinely turn to forums such as Quora or Reddit to find answers on maximizing those rewards. This has even led to the creation of specific communities such as r/churning, a Reddit community focused on gaming credit card bonuses with 170,000 members.
These forums can be a good source of anecdotal advice and strategies for earning as many rewards as possible. But because you don’t know exactly who is giving the advice, you need to be wary of placing too much trust in Redditors who may not have much more knowledge of when you should and shouldn’t use credit cards than you do.
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3 Credit Card Topics People are Talking About on Reddit
Here are some trusted answers to a few of the biggest questions people are asking on r/creditcards and r/churning about opening new credit cards.
What Are the Best Credit Cards?
One of the most popular questions on r/creditcards asks which card is the best one. There’s no one right answer, as the best credit card for each person depends on the type of rewards program you’re looking for and your goals for using the card.
Two Reddit favorites for travel credit cards, for example, are the Chase Sapphire Preferred and the Chase Sapphire Reserve, while some of Reddit’s most popular cash back cards include the Chase Freedom Unlimited.
What is Churning?
Churning is the term for maximizing your credit card rewards by repeatedly opening and closing accounts to take advantage of generous signup bonuses for new cardholders. Rather than opening just one card and sticking with it, you’re strategic about which cards you open so you can get the most value for your spending. It’s essentially a form of travel hacking.
Benefits of Churning
The benefits of churning are obvious: You can score tons of free miles and, essentially, free money. That’s because some credit cards — such as the Chase Sapphire Reserve — offer signup bonuses worth hundreds of dollars.
If you stay organized, do your homework, and are smart about which cards you open and use, you can end up earning thousands of dollars annually in credit card rewards through churning.
Downsides of Churning
Avid Reddit churners are generally very optimistic about your ability to earn huge rewards by embracing churning. But despite the possibility of getting lucrative bonuses for opening multiple credit card accounts, there are some definite reasons you should be cautious about churning.
- Managing several cards can be a lot of work: It takes time and energy to keep track of the spending requirements and time limits associated with different signup bonuses.
- Your credit score could take a hit: Each time you apply for credit, you get a hard inquiry on your credit report that remains there for two years. Multiple inquiries are a red flag for most creditors. When inquiries hurt your credit score, you could end up getting stuck with higher rates on other financial products, thereby increasing your costs of borrowing for years to come.
- You could run afoul of credit card company terms and conditions: Many credit card companies have caught on to churning and have started implementing rules aimed at minimizing the abuse of signup bonuses. Although the rules don’t make churning impossible in all circumstances, they have since made it more difficult.
What is the 5/24 Rule?
One of the biggest rules that limit churning is the 5/24 rule. The 5/24 rule applies to all Chase credit cards as well as Chase co-branded cards. This includes various Southwest cards; the Chase Freedom and Freedom Unlimited cards; Chase Ink cards; and several United cards, among others.
Under the 5/24 rule, you’ll be declined when you apply for a Chase card if you’ve opened at least five personal credit cards with any card issuer over the past 24 months. Further, some reports indicate that if you apply for too many Chase cards in too short a period of time, your existing Chase accounts could be shut down.
This rule applies only to Chase cards — you can still qualify for other popular rewards credit cards, including the Discover it Cash Back card or the Capital One Venture Rewards card. Although you can apply for cards with other issuers despite the 5/24 rule, hitting this limit might indicate your churning habits are out of control and that you may be doing damage to your credit score by canceling too many cards.
3 Interesting Threads We Found on Reddit
Because there are so many Reddit threads related to churning and credit card topics, it’s hard to weed through them all — and some are more helpful than others. Here are a few threads on Reddit we found worth checking out.
A Churning Flowchart
If you’re interested in churning, this Reddit chart will help you prioritize which card you should apply for next. It can also provide guidance on which card is the right one for you even if the 5/24 rule has kicked in. But if you decide to use the flowchart to start churning, be aware of the possible damage you could do to your credit score.
This Redditor’s Treatise on the Value of Credit Cards
Many people simply can’t qualify for a credit card right because of a bad credit score or limited credit history. If that’s your situation, using a debit card is a fine financial choice. However, there are also people who don’t use credit cards because they don’t really understand their benefits or are scared of getting into debt.
If you fall into the second category and just aren’t sure credit cards are right for you, Reddit user u/idealdreams posted this impassioned plea encouraging others to take advantage of credit card benefits, including establishing good credit and earning rewards. The key is to make sure you’re being responsible and not spending more than you can comfortably afford to pay back.
This Redditor Who Learned the Value of Picking Up the Phone
When you apply for a credit card, there are times you’ll receive a denial without an explanation. One Redditor posted a thread about what he did after this happened to him. Instead of taking no for an answer, he persisted with calling the card company — and was finally approved on the fourth call.
This strategy won’t work if you clearly aren’t qualified for a particular card. But this user knew his credit was good enough to get approved, and his persistence was rewarded.
Bottom Line
As you can see, there are some interesting credit card threads on Reddit. But remember, your credit score is very important to your financial future, so taking advice from people who don’t have proven expertise can be risky. You can use Reddit as a resource but should also look elsewhere to confirm the information. You don’t want to base big financial decisions solely on advice from an anonymous internet user.