How credit card churning affects your credit score

Credit cards can provide an excellent way to build credit, and many cards offer sign-up bonuses and rewards to encourage you to apply and use one regularly. Some consumers take advantage of these promotions, shuffling through cards quickly to earn their welcome bonuses.

If you’ve ever considered using this strategy, called credit card churning, to earn points, miles or cash back quickly, it’s important to understand how the process can affect your credit score.

What is credit card churning?

Credit card churning involves repeatedly applying for credit cards to earn their sign-up bonuses, which can be worth hundreds of dollars.

Is credit card churning worth it?

Credit card churning is a high-risk strategy to rack up credit card rewards, and there are several potential pitfalls to know before you start.

First, opening multiple credit accounts in a short period can make you look like a risky borrower, and the inquiries can impact your ability to get approved for credit in the future. Plus, every new account lowers the average age of your credit accounts, which impacts your length of credit history…Read more>>

Source:-foxbusiness

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