This is series 2 of a 5-series guide on credit scores, credit cards, and bank accounts. Head back to the Main Concourse to see the table of contents.

The Proper Mentality (Natural Spend)

Every single month, you have life expenses that need to be paid:

• Food/Groceries/Household Goods

• Car/Gas/Transportation

• Utilities/Rent (there’s a special card for this)

• Internet/Phone

• Gym/Pets/Etc.

This is what we’ll refer to as natural spend.

Natural spend happens no matter what - it’s non-negotiable and life-sustaining.

-You can’t avoid buying groceries because you have to eat.
-You can’t miss a rent payment because you need a roof over your head.
-You can’t avoid paying for transportation because you have to get to work.

If this money needs to be spent anyway, may as well have it be as useful as possible and serve a second purpose.

What is credit card churning?

Spend Requirements & Cooldown Periods

As a customer acquisition strategy, banks offer sign-up bonuses for their credit card products. These are usually in the form of:

• spend [X] dollars

• over [Y] months

• to receive [Z] amount of [credit card points/statement credit]

Starting to see the connection?

We just talked about how you have a certain amount of natural spend in the section above.

Credit card sign-up bonuses have a spend requirement.

The two go hand in hand.

The only change here is putting that natural spend on credit instead of debit or cash.

Other than that, you’re not making any changes to your spending behavior. You’re not spending any more money than you normally already do.

Here’s the catch with sign-up bonuses: There’s a cooldown period.

Generally, these cooldown periods range from 24 - 48 months, but some credit card issuers (e.g. American Express) have “once-per-’lifetime’” restrictions.

While these terms may sound restrictive, they’re really not that bad.

There are so many credit cards out there. It’s virtually impossible for someone to exhaust every single bonus in 2 years. It’s more likely the banks start denying your applications.

Therefore, the optimal credit card strategy looks like a waterfall:

This is an illustrative example. You can speed up/slow down as necessary.

However, the value of churning truly shines when you’ve amassed massive point balances. For most of us, this is best achieved with sign-up bonuses.

And no, it doesn’t have a negative impact on your credit score. If you don’t understand why, return to Gate 1 where I talk about it in depth.

Techniques and Hacks For Sign-Up Bonuses

“How do I meet the spend requirements for sign-up bonuses if my monthly spend isn’t that high?”

Valid concern. And like we mentioned earlier, you shouldn’t be changing your spending habits for the sake of hitting bonuses.

Thankfully, there’s a wide range of techniques you can leverage to meet spend requirements. These range from very basic strategies to the most advanced, under-the-radar techniques that, for good reason, experts will keep between themselves and a very small circle of confidants.

Let’s get specific below - fasten your seatbelts: