How credit card churners are adapting during the pandemic

Eric Rosenberg expected 2020 to be a big travel year.

The finance expert at Personal Profitability, a blog focussed on helping people grow wealth and spend thoughtfully, is a savvy credit card churner, and had finally qualified for the Southwest Airlines companion pass, which allows his kids to fly with the airline for free. He was excited to put the pass to work.

But then a pandemic swept across the globe, crippling the travel industry in its wake. In an effort to slow the spread of COVID-19, countries around the world began closing their borders in March, as well as shutting down airports, and imposing major travel restrictions. Leisurely travel as we knew it was brought to a halt. 

As the world slowly reopens four months later, some non-essential travel has resumed, but vacationing, for the most part, is unlikely to happen this summer. So what’s a credit card churner to do with all those rewards if there’s hardly anywhere to go?

Churning cards with a new focus

Rosenberg isn't in a rush to cash in his hard-earned rewards, but he hasn't given up on miles and points. As a freelance writer, he knows there's a possibility of his income shrinking due to the economic downturn triggered by the pandemic so he wants to preserve cash — and that means spending less.

“I’ve put new applications on hold because I’m not sure if I’m going to spend enough to reach the bonuses,” he says. “But that doesn't mean I’ve stopped using credit cards.”

In what he refers to as a “tempered approach,” he actively manages which card he uses to get the most rewards and captures spending he’s going to be doing anyway. 

For example, he uses a credit card to pay for his annual home insurance premium, earthquake and health insurance payments — all recurring bills — to hit the minimum spending amount required to qualify for an introductory bonus. 

“I'm not one of those people who tries to spend as much as possible on a card all the time,” says Rosenberg. “That's not my style.”

That’s why if you’re interested in dabbling in churning right now, he recommends looking to places you already spend a lot at regularly. For example, if you know you need to spend $2,000 to get a sign-up bonus, purchase gift cards for your local grocery store. That way, you’re essentially prepaying for your groceries in order to get a credit card bonus that you might not have been able to achieve based on your regular spending habits.  

Lee Huffman is another self-proclaimed credit card churner. Host of the podcast We Travel There, Huffman says that despite the pandemic, he’s continuing to pursue miles and points for future vacations. 

Back in 2013, Huffman managed to hack four free flights to and from Paris for his family with his Air Miles. He plans to churn another card or two soon because he’s about to do some backyard projects that will meet minimum spend requirements and earn him a welcome bonus.

If you’re not looking to catch a flight soon you can look to places that don’t require air travel to reap some of the benefits. For example, Huffman’s next family flight is in October but they will probably do some road trips this summer. So he will use hotel points and free nights from his credit cards to pay for accommodation. 

“Some credit cards are offering bonus points on everyday categories like groceries while people aren't travelling as much,” he says. 

Huffman suggests people time new credit card applications when they have big expenses coming up. If you can't, he suggests bulking up on rewards wherever you can by using automatic cash back programs, such as Rakuten (formerly Ebates) and Dosh. 

Churning responsibly is more important than ever

Credit card churners like Rosenberg and Huffman don’t just take advantage of sign-up offers for free flights. They’re also in it for the cash back and other rewards. When successfully implemented, this can include saving money, amazing perks and sometimes having several credit cards improves your credit utilization ratio since you have multiple cards. 

However, the downsides include financial penalties if you miss a payment, and the potentially harmful impact to your credit score for frequent hard checks on your credit. It’s also time-consuming and a costly experiment if don’t meet the minimum spending requirements,

Whatever you do, you always want to manage your cards responsibly. Do your best to pay them off in full every month before the due date so you don't pay interest or late payment fees.

“Credit cards are not slot machines that dispense miles, points and cashback rewards,” says Rosenberg.

And that’s especially true during a time of global financial uncertainty. It might not be worth the risks involved to churn like you did pre-COVID.

“If you’re doing anything that’s going to cost you more money in the pursuit of earning rewards you want to make sure that your rewards are worth a lot more than your spending,” says Rosenberg. “Or at least enough to break even if you find it to be a fun hobby.”