Maybe it’s just me, but it seems like the credit card companies are starting to tighten things up when it comes to credit card churning. Furthermore, reports are beginning to surface that churning could have an adverse effect on normal expenditures such as car insurance. Is the end of credit card churning coming sooner than later?
Churning News: It’s Looking Bleak
Yesterday I read a piece over at Travel With Grant which outlined his really depressing “App-o-rama”. His experience was not good and chalked full of denials and failed recon calls. We know that Chase has their famous “5/24” rule which prohibits applicants from obtaining most of their cards if they’ve opened more than 5 cards in the previous 24 months. This is especially relevant because Chase has some of the best cards out there. Furthermore, reports are emerging that other banks are looking to follow their lead and curtail card churning.
Earlier this week, View From The Wing reported that insurance carriers are beginning to adjust rates for policy holders that engage in churning. While this wasn’t heavily covered in the points and miles world, I really think it should be. In my opinion this could be the straw that breaks the camel’s back. If most insurance companies begin to rate card churners, I think it’s game over.
Typically, the mainstream warnings about card churning involve inadvertently falling into debt. If churning now has an adverse impact on something almost everybody needs to buy like insurance; then how could it ever be a viable option? Who wants to apply for a bunch of cards that may or may not be approved, then deal with higher insurance rates? It’s just not worth it.
Personally, I think Chase’s 5/24 rule is a good guideline to follow. Opening a 2-3 cards per year allows you to develop a great card rotation, while still snagging big sign up bonuses here and there. Additionally, this type of strategy should prevent you from making awkward recon calls and paying higher insurance premiums. What do you think? Will you continue to churn, or has recent news steered you away from the practice?