Beware of Churning Too Many Credit Cards for Bonuses

Applying for new credit cards these days come with a lot of benefits. Financial institutions spend a lot of money competing for your credit card business. One of the largest expenses include credit sign-up bonuses incentives. In fact, the Chase Sapphire Preferred Credit Card has a sign-up bonus as high as $1000 to encourage you to use their card.

Of course, if there’s an accessible way to make some extra money, many people want in. Thus, the culture of “Churning” credit cards had began.

What is Churning?

Simply put, churning is the act of continuously applying for new credit cards with the intention of only capturing the sign-up bonus, which usually require a minimal spend within the first 3 months of account open. Credit card churners would typically stop using a credit card after receiving its sign-up bonus, and/or outright cancel the credit card to avoid any annual fees (if applicable). While this is a somewhat gray method of making money from a bank’s promotions, there are enough people doing this that banks have implemented “Anti-Churning Rules” to try to identify and reduce the amount of churners taking advantage of their credit card promotions.

What are Anti-Churning Rules?

Each bank have a different way of combating customers that don’t intend to stick with their product after the promotion bonus. The general approach is adapting various “anti-churning rules” to identify customers that are frequent credit card applicants, and reject them from obtaining their product.

Worst case scenario? The bank may identify you as an “undesirable” customer, and decide to not do business with you at all; this would mean they would automatically close out any current and future accounts you have with them! The worst case scenario is why we want to be careful about churning too many credit cards, and being flagged as a bad customer for what would-be very generous promotions from the banks.

Below I list out anti-churning rules that seemed to have been implemented by the below banks. Please note that these rules may change all the time, and this is only a reference. I also have to say that while I recommend you try out different credit cards to find one that works best for you, be aware that abusing credit card sign-up bonuses is generally frowned upon – which is why these anti-churning rules have been put in place.

• American Express
• Bank of America
• Capital One
• Chase
• Citibank
• Discover
• Wells Fargo

American Express Rules

• 5 Credit Card Limit
  • AMEX only allow you to have 5 concurrent AMEX credit cards. This does not apply to charge cards.
• 2/90 Rule
  • Within a 90 day interval, you may only apply for a maximum of 2 AMEX credit cards. this does not apply to charge cards.
• Once in a Lifetime Rule
  • AMEX only reward a “once-in-a-lifetime” sign-up bonus for each credit card product. If you have or have had a particular AMEX card, you are not eligible for any bonuses when creating a new application for that card.

Bank of America Rules

• Closure of “Excessive Cards”
  • BoA may close an individual credit card if you have 4 or more credit card with them. Usually this is triggered by “excessive” getting a new credit limit (via a new card or request) and increasing BoA’s credit allowance for you
• Card Limit for Students
  • Students are limited to a maximum of 2 BoA cards
• 2/3/4 Rule
  • You may not have more than 2 BoA cards in 2 months
  • No more than 3 BoA cards in 12 months
  • No more than 4 BoA cards in 24 months
• 24 Month Rule
  • Many sign-up bonuses are not available for existing card holders or those that have had the card within the last 24 months. This is not a rule across all credit card products.

Capital One Rules

• 1/6 Rule
  • You can only apply for 1 new Capital One credit card every 6 months. Any additional applications will be automatically rejected without a hard credit pull.

Chase Rules

• 5/24 Rule
  • Chase will deny you certain cards if you have opened 5 or more credit cards across any issuer. This is a big one because Chase has some of the best credit card deals, and this is one of the most restrictive rule.
• 2/30 Rule
  • Chase may limit you to only 2 Chase personal credit card application within a 30 day period.
• 1/30 Rule
  • If you submitted a personal or business Chase credit card application in the last 30 days, a newer business card application may get denied.
• Denial of Signup Bonus for Same Credit Card in Last 24 Months
  • Many Chase credit card products will have a restriction where you cannot receive a bonus for a card that you have had in the past 24 months
• 1/48 Rule on Sapphire Family
  • You may only have 1 Chase Sapphire product, and cannot apply for another Sapphire product every 48 months. Sapphire products include the Chase Sapphire Preferred Credit card, Chase Sapphire Reserve Credit Card, and Sapphire Banking.
• No Same Day Apps
  • You may not apply for more than one Chase credit card in a day

Citibank Rules

• 1/24 Rule
  • Only one signup bonus per Citi credit card brand per 24 month
• 1/8 Rule
  • May only have at most 1 personal Citi credit card in a period of 8 days.
• 2/60 Rule
  • May only have 2 Citi credit card (includes both personal and business) application within a 60 day period
• 1/90 Rule
  • May only have 1 Citi business credit card application in a time period of 90 days.
• 6/6 Rule
  • If you have more than 6 credit inquiries within 6 months, Citi may deny your credit card application.

Discover Rules

• 1-2 Maximum Cards
  • You may hold a maximum of 2 credit cards from Discover
  • You may only hold 1 Discover student credit card
• 1/12 Rule
  • You may only obtain 1 Discover credit card every 12 months

Wells Fargo

• 1/15 Rule
  • You are ineligible for credit card rate, fees, and bonus offers if you opened a Wells Fargo credit card within the last 15 months.

Bottom Line

There are a lot of credit cards in the market out there with great sign-up bonuses and incentives. Banks are constantly trying to win new customers. Whether intentional or not, they have created a culture where customers are consistently seeking out the best credit cards that works for them; this includes enticing credit card sign-up bonuses.

However, as customers are getting more and more comfortable jumping from credit card to credit card, many banks of imposed “anti-churning” restrictions to discourage abuse. Most banks keep their anti-churning rules restrictions on their own products, but Chase seems to have taken restrictions to another level.

I encourage you to explore and find the most beneficial credit card that works for you, but also be aware of anti-churning rules that may create unexpected frustrations during the application process, or at worst – a poor relationship with a bank.

_{Disclaimer: Much of the information aggregated here reddit r/churning community. It’s a great place to learn and discuss more about credit cards if you want to get deep into the weeds.}