If you frequent the personal finance world of Reddit, credit card churning might be a term you’re familiar with. With this rewards-reaping method, savvy credit cardholders can maximize the benefits they get from credit card sign-up bonuses.

Is credit card churning illegal, though? Could you end up getting in legal trouble for trying to capitalize on advertised benefits?

Let’s dive into what you should know.

Is Credit Card Churning Illegal?

No, credit card churning isn’t illegal. However, card issuers frown upon it. In fact, now that they’ve caught on to the practice, they often put systems in place to make churning more difficult.

These days, many credit card issuers have updated the terms and conditions for both their rewards programs and their credit cards. This is in an attempt to make credit card churning less lucrative, more difficult, or downright impossible.

There have even been some instances of an issuer revoking points that were earned by a credit card churner. Credit card issuers have even closed down accounts, including checking and savings accounts, when they have found someone to be gaming the system.

Is
Credit Card Churning Worth It?

The answer to this question really depends on factors that are personal to you. You might find that credit card churning is a net benefit for you if:

  • You are a responsible credit card holder
  • You spend a lot of money on credit cards anyway
  • You have incredible credit scores
  • You have the time and interest to stay on top of churning

On the other hand, churning might not be a good idea for you don’t fall into a number of the above categories. If any of the following are true for you, you’ll probably want to stay away from this method:

  • You have a spending problem
  • You’ve never had a credit card
  • You don’t normally spend a lot of money on credit cards
  • You’re planning to take out a major loan
  • You prefer to keep things simple

Ultimately, credit card churning is a high-risk, high-reward strategy. You risk incurring debt or fees in addition to damaging your credit. However, if you stay on top of it you can earn more credit card rewards, faster.

Should You Start Churning Credit Cards?

Is credit card churning illegal? No, though it is controversial. Is credit card churning worth it? Only you can answer this question.

It’s important to not overstate how diligent one needs to be in order to be successful with credit card churning. If you aren’t interested in picking this up as a hobby that you stay pretty tuned in with, it’s best to avoid it. Otherwise, you can end up racking up debt or screwing up your credit score.

Did you find this article useful in your quest for financial health? If so, be sure to check out the rest of our blog for extensive credit card resources.

Kelly Brown