What Is Credit Card Rewards Churning?

When you see banks' advertisements that boast bonus cash rebate and rewards points, it can be difficult to resist the temptation of applying for a new card just to get those welcome bonuses. But is it really a smart financial move to apply for a card simply to get some extra points? The answer, like many others in the realm of credit cards, isn't a straightforward “yes” or “no.” The credit card rewards churning process is to sign up for as many credit cards as possible. People do this for the sole purpose of gaining the very first credit card rewards, points and other rewards in their possession. After getting the rewards, the user then closes and cancels the credit card account - which is a red flag to credit card issuers. The idea of applying for a credit card based solely on its...