Churning Credit Cards in Canada

Churning credit cards in Canada has become a popular thing as of late. Wait, what does churning credit cards mean? To simply put it, it’s when you sign up for credit cards with large signup bonuses such as travel miles or member rewards and then canceling them after obtaining those bonuses.

It seems odd that people would signup for credit cards just to cancel them, but when you look at the value of those bonuses, it makes a lot of sense. For example, if you were to sign up for the American Express Gold Card, upon meeting the minimum spend, you would get enough points for a return flight to anywhere in Canada and the continental US. Now you see why Churning credit cards in Canada is so popular?

Churning Credit Cards in Canada

Does churning credit cards hurt your credit score?

Without a doubt, churning credit cards affects your credit score, but when you understand how your credit score works, you’ll realize that churning isn’t a big deal.

Your credit score can range anywhere from 300 to 900. To be realistic, you want your score to be at least 650 since that’s around where you won’t have any issues getting access to credit. If your score is 725+, it’s considered excellent, but if falls under 650, it’ll be harder to get a loan.

There are many things that determine your credit score, but the biggest factor is your payment history. If you’ve been paying your bills in full and on time, you’ll likely have a good credit score.

Now, whenever you apply for a credit card, a hard inquiry is performed on your credit history which results in a loss of about 10 points on your credit score. If you have a good credit score, then a 10 point hit really won’t matter much.

More importantly, after a few months of paying your new credit card bill on time and in full, your credit score will go back up to where it was.

You could apply for 2-3 credit cards in one month and it probably wouldn’t be a big deal. Just don’t do it every month, and don’t apply for a ton of cards if you plan on getting a mortgage soon. Lenders will wonder why you need access to so much credit.

The benefits of churning credit cards in Canada

As stated above, the biggest benefit of churning credit cards is the signup bonus. Many cards offer a big signup bonus and will even waive the annual fee for the first year.

Yes, you’ll need to meet the minimum spend which can be anywhere from $500 – $1,500 in the first 90 days, but your signup bonus could be worth anywhere from $200 – $700.

Some of the premium credit cards may not waive their annual fee or they might have a high annual fee, but the signup bonuses might be worth more than those fees so you’ll end up ahead. You just need to do the math to figure out if it’s worth it.

In addition to the signup bonuses, many credit cards come with additional benefits that make worth churning specific cards worth it. For example, some credit cards offer a companion fare for a fixed price; that could be a huge savings. My American Express Platinum card gives me airport lounge access which is worth $500 a year, this is in addition to the 60,000 Member Rewards I got when I signed up.

The best churning credit cards in Canada

You could make an argument about what the best churning credit cards in Canada are, but I like to pick ones based on simplicity. I give extra weight towards all the American Express cards since you can refer friends and family for extra points. This can be a great strategy if you’re churning credit cards as a couple. Here are my picks for the churning credit cards in Canada with a few quick points on the benefits.

American Express Gold Rewards card 

  • 25,000 Signup bonus
  • First-year annual fee waived ($150 value)
  • Earn two points for every $1 spent on grocery, drug stores, and gas purchases. One Membership Rewards point for every $1 spent on all other purchases.

What makes the American Express Gold Rewards card appealing is how you can transfer your points to Aeroplan or Avios on a one-to-one basis. You can basically turn this into an Aeroplan card. Read my full review of the card or use referral link now to sign up.

American Express Platinum Canada 

  • 60,000 Signup bonus (when using my referral link)
  • Earn 1.25 points for every $1 spent
  • $200 Annual travel credit
  • Airport Lounge Access
  • $699 Annual fee

The annual fee sounds really high but the benefits included are worth way more so it makes it worthwhile. Sign up for the Amex Gold first and then self-refer this card to maximize your points. If you want to learn more about this card, check out my review.

Starwood Preferred Guest by American Express

  • 20,000 Welcome bonus Starpoints
  • $120 Annual fee

Although the annual fee is not waived, the SPG points are valuable for two main reasons. 20,000 points are enough for two nights at a category 4 hotel (which could be worth $600) and points can be transferred to 30+ airlines on a 1:1 basis. Read my full review of the card or use my referral link now if you’re ready to sign up.

Marriott Rewards Visa

  • 30,000 or 50,000 bonus points after your first purchase
  • No foreign currency transaction fees
  • Anniversary free night stay
  • First-year annual fee waived ($120 value)

Quite often the Marriott Rewards Visa runs a promotion where you get 50,000 bonus points after your first purchase which is a 40% increase from the standard 30,000 points; for obvious reasons you should wait for this promotion. **50,000 promotion available right now.

In addition, you can transfer for your Marriott points to Starwood on a 3:1 basis (50K Marriott points = 16,666 Starpoints). If you applied for this card as well as the Starwood Preferred Guest by American Express, that’s 36,666 Starpoints you could quickly earn.

Capital One Aspire Travel World Elite MasterCard

  • One-time bonus of 40,000 miles – equal to $400 in travel
  • 2 reward miles for every $1 on all purchases
  • $150 annual fee.

Although there’s an annual fee, the $400 travel bonus means you’ll still be up $250. The other appealing thing about the Capital One Aspire Travel World Elite MasterCard is the fact that you can use your reward miles for any type of travel. This card is great if you’re looking for flexibility.

Final word

It’s not difficult to see why churning credit cards in Canada has become so popular; I personally churn cards on a regular basis. If you’re responsible with your spending, then you might as well take advantage of signup bonuses. The key is to remember to cancel your cards before the yearly fee kicks in (but keep your oldest one for reporting purposes. Use the widget below now to see which credit cards are a good fit for you.

Best Credit Cards Canada

By | 2017-07-30T10:36:48+00:00 March 13th, 2017|Credit cards, Personal Finance, Travel|

6 Comments

  1. Sumit March 13, 2017 at 5:41 pm - Reply

    Hi.. Thanks for the article and i also I churn the cards. Question for you:

    How do you churn amex personal cards since amex no longer give you bonus points 2nd time.

    Thanks
    Sumit

    • Barry Choi March 14, 2017 at 1:11 am - Reply

      Hi Sumit,

      I don’t churn Amex cards anymore due to the once per lifetime signup bonus. However, I do keep my gold and SPG cards active mainly for the referral bonuses.

      I’m a casual churner, so I only churn cards when it’s convenient for me.

  2. Sam March 15, 2017 at 6:04 pm - Reply

    Hi Barry, given the US platinum card recently went through some major changes, do you think the Canadian version will follow in the near future? Thanks.

    • Barry Choi March 15, 2017 at 6:09 pm - Reply

      Hi Sam,

      The Canadian Platinum card is already not as good as the US one, so hopefully there won’t be any changes. That being said, there’s always a worry of the points being devalued. I usually recommend that people use their points ASAP. Aeroplan has devalued their points multiple times over the last few years.

  3. Kyle Davidson May 18, 2017 at 12:16 pm - Reply

    Hi Barry,
    Thanks for the article. I have a couple questions about churning in Canada.
    1) Is it true that most/all cards will only give you the sign up bonus once per lifetime?
    2) Are there any restrictions for sign up bonuses if you sign up for similar cards (e.g. AMEX) from different banks? That is will applying for one negate the signup bonus for another?
    3) Is there a limit to how many cards AMEX (or VISA, etc) will allow you to have active at one time? In the US they seem to have well defined rules like how you can apply for up to 5 cards issued by Chase within 24 months.

    • Barry Choi May 18, 2017 at 12:21 pm - Reply

      Hi Kyle,

      1) Currently only Amex has the once per lifetime sign up bonuses implemented.
      2) As long as they’re different cards, it won’t matter. e.g. if you sign up for the CIBC Aeroplan and the TD Aeroplan cards, they won’t cancel each other out.
      3) As far as I know, there are no hard rules, but each credit card provider can deny you for whatever reason.

      I personally have about 10 credit cards, but I know of people who have 15 – 25. In Canada, our sign up bonuses and credit card selection is limited so it’s tough to have a ton of cards at any given time.

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