Thursday, April 28, 2016

Churner by marriage

There are many, many things that I miss about my husband. But coming home and finding yet another filled in credit card application, ready for me to sign, is not one of them.

Was my husband someone who racked up credit card debt, and needed to get new cards going so he could rob – or borrow – from Peter to pay off Paul?


I don’t think Jim ever borrowed a dime in his life, and he fully paid off every bill that came in the door the minute it came in the door.

But what Jim was was a frequent flyer miles junky who used points accumulated via credit cards to make sure he never paid for a flight anywhere.

There’s a name for what Jim did, I have learned, and it’s credit card churning.

How it works is pretty simple: You get an offer for a new credit card, promising 50,000 miles if you sign up – as long as you spend, say, $1K a month on the card for three months. Once you hold up your end of the bargain by spending that $1K a month, and you take possession of the miles, you cut the card up. And apply for the next one that comes along.

Compared to the folks who are serious churners, Jim was something of an amateur. While Jim might have a half dozen or so active cards at any given time, the real churners may be juggling dozens of them. One couple profiled in a recent Bloomberg article had “43 cards, not counting more than 20 they’ve opened and closed in the past few years.”

Juggling so many credit cards and rewards programs can be a huge undertaking. You need to meet each card’s spending requirements, track changes to the fine print of all your programs, make sure you’ve got the money to cover bills with due dates spread across each month, and keep up with new card offers. Leppar and Miller both say they spend an hour or more a day on their hobby. [Shawn] Coomer, 34 and now a full-time travel blogger, keeps all his cards—about 25, for now—in a binder and uses a complex spreadsheet to track their due dates, spending requirements, and annual fees. He logs in to each card issuer’s website regularly and constantly looks for fresh offers, opening an average of 15 cards a year. (Source: Bloomberg)

Jim didn’t keep binders or complex spreadsheets, and, as frequently as I felt he was asking me to sign up for yet another card I didn’t want I don’t think we averaged any 15 cards per year. But Jim was a detail-oriented guy, and he kept good records, including info on the dates when he could apply for a new card from a bank that he’d already dumped. And we did accumulate a ton of miles.

Jim also liked Capital One points – I do, too; Capital One is one of the few credit cards I hold – and one of his final points coups happened a couple of months before he died, when we charged a new $15K HVAC system and got showered with points. (I think there was a two-for-one promo on or something. I’ll say this for Jim, he didn’t let a brain tumor stop his brain from churning.)

The trick, of course, is to not get in over your head, and not to incur all sorts of debt that you can’t afford to pay off – all so that you can make oodles of reward miles or points.

A recent study from the Federal Reserve Bank of Boston showed that when borrowing limits go up, consumers generally can’t help themselves from using every last cent of their extra credit. As churners try to put everything they possibly can on their credit cards, down to rent and utilities if possible, they can also be tempted to buy things they don’t need.

For the record, we did need that new HVAC system.

Alas – for churners, anyway – there are rumors in churner-ville that the big banks are going be cracking down and cutting off the credit card flow to anyone who’s “applied for five other cards in the past 24 months.” That would be my husband. And, under his wing, me when I came home and found one of those filled in applications waiting my signature, or later, awaiting my email confirmation.

As I said, there are plenty of things I miss about my husband, but being a churner-by-marriage isn’t one of them.

Nonetheless, sigh…

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