Understanding How Credit Card Churning Works in Canada

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Written by Enoch Omololu

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Are you intrigued by the concept of credit card churning in Canada? Curious about the best credit card churning strategies? You’re in the right place.

In this article, we will break down this concept step by step and guide you through the process. We’ll cover everything from the basics of credit card churning to its potential risks. 

Main Highlights

  • Credit card churning helps you get more from your rewards by opening many cards for bonuses and perks.
  • To succeed in credit card churning, compare offers, apply strategically, meet spending requirements, and manage repayments.
  • Cancel cards after bonuses, but be mindful of rules to avoid issues with credit card companies.
  • Churning can affect your credit score, so research and plan.

What is Credit Card Churning?

Credit card churning is a smart way to get the most out of your credit card rewards. This strategy involves opening several credit cards to take advantage of their sign-up bonuses, perks, and rewards programs. 

Many savvy consumers use credit card churning to earn travel points, cash back, or other incentives offered by credit card issuers. By following this approach, you can maximize your rewards and get more value from your credit cards.

How Does Credit Card Churning Work?

Credit card churning in Canada involves specific steps that many successful churners follow. Here’s a summary of the process:

  • Compare Offers: Begin by checking out the rewards and travel offers available. Look for bonus points that match your goals and offers with no annual fee or a waived fee for the first year.
  • Apply: Choose your desired cards and check if you meet the requirements. Apply online, and if approved, expect to get your card in 1 to 2 weeks.
  • Set Reminders: Timing is key. Set calendar reminders for minimum spending, repayment due dates, and the card’s anniversary (annual fee time).
  • Meet Spending Requirements: Aim for straightforward spending requirements, like spending a specific amount within a few months. Complex requirements can lead to interest charges or extra costs.
  • Pay in Full: Clear your card’s balance by the statement’s due date to avoid interest charges.
  • Check Rewards: After meeting the spending requirement, wait a few weeks for bonus points to land in your rewards account (usually 6 to 10 weeks). Follow up if needed.
  • Cancel the Card: Once points are in your account, cancel the card to dodge the second-year annual fee, due 12 months after opening.
  • Apply Again: After cancelling, consider another bonus point offer. Space out applications to manage inquiries on your credit file.

These steps offer a roadmap for successful credit card churning and maximizing rewards in Canada.

Credit Card Churning Example

Let’s look at an illustrative example. 

Suppose you apply for a travel rewards credit card with a substantial sign-up bonus of 50,000 points once you spend $3,000 within the initial three months. 

Upon meeting the spending requirement, you’ll receive bonus points, which can be used towards flight bookings, hotel reservations, or other travel-related expenditures. 

Following this, you might decide to close the account or continue using the card if the ongoing rewards and perks align with your needs.

Is Credit Card Churning Illegal?

Credit card churning itself is not illegal. But it’s important to follow the terms and conditions set by credit card issuers. 

Some issuers may have specific rules regarding how often you can apply for their cards or receive sign-up bonuses. Failure to adhere to these terms could lead to the denial of rewards or even account closure.

Does Credit Card Churning Hurt Your Credit?

Credit card churning can be a great way to earn rewards, but it’s essential to approach it with caution. 

Applying for several credit cards in a short span may lead to multiple hard inquiries on your credit report, which could momentarily affect your credit score.

Moreover, closing accounts can influence your credit history’s average age and credit utilization ratio. Before starting a credit card churning strategy, it’s important to consider these factors carefully.

Tips For Effective Credit Card Churning

To engage in successful credit card churning, consider the following tips:

  • Research Thoroughly: Check credit card offers, benefits, and fees to find the best fit for your needs and spending habits.
  • Stay Organized: Keep track of application dates, spending requirements, and annual fees to avoid missing out on rewards or incurring unnecessary costs.
  • Mind Your Credit Score: Be mindful of how churning may impact your credit score. Space out applications to minimize the effects of hard inquiries.
  • Plan Ahead: Align your churning strategy with your financial goals and upcoming expenses to ensure you can meet spending requirements responsibly.

Is Credit Card Churning Worth It?

Credit card companies know about “credit card churning.” If you cancel a card and quickly try to reapply, you’ll probably be told no. Usually, you’ll need to wait about a year before they say yes to a card you’ve churned before.

On the whole, it might seem like there are more disadvantages than benefits if you churn cards. 

But if you’re good with your credit, churning out cards can be a good idea. Yet, keep in mind that no reward is worth owing money for. And if you want to get a loan or credit soon, it’s better to have a clean credit record.


Do you cancel credit cards after churning? 

Yes, many churners choose to close cards after obtaining the sign-up bonuses or rewards. But consider the potential impact on your credit history and utilization ratio.

Can you make money credit card churning? 

While you can earn valuable rewards, credit card churning isn’t a guaranteed way to make money. It requires careful planning and responsible spending.

How many credit cards are too much?

The ideal number of credit cards varies for each individual. Consider your ability to manage payments, track spending, and adhere to terms and conditions.

Related: How Do Car Loans Work in Canada?

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Enoch Omololu

Enoch Omololu is a personal finance expert. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. Enoch is passionate about helping others win with their finances and has written about money matters for over a decade. He has been featured or quoted in The Globe and Mail, CBC News, Yahoo Finance, GO Banking Rates, Financial Post, Bankrate, Forbes, Toronto Star, CTV News, and other personal finance publications. He founded Savvy New Canadians, one of Canada’s top financial education platforms.

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