As I write, I’m sitting on the balcony of a luxury guesthouse in the Austrian Alps, just back from my mountain bike ride to (almost) the top of a nearby mountain yielding glorious views. This isn’t a humblebrag (well, not just one). I got here flying premium economy on Air France for relatively little in fees, with the bulk of my expensive airfare paid for in points I earned through credit card churning. And thanks to many universities’ otherwise terrible policy of making you pay upfront for work-related travel, academics are especially well-positioned to take maximum advantage of this strategy. So if you want to learn about credit card churning for academics, read on!
Warning: None of the strategies outlined below are remotely worth it if they lead to you accumulating credit card debt that you can’t pay off by your statement due dates. These strategies should only be pursued if you are financially well-established, know thyself and thy numbers, travel frequently for work and/or pleasure (or would like to), have a system in place to avoid paying interest while you’re waiting for work travel reimbursements, and know for sure that you can stay disciplined in how you use your credit cards. Credit card typically have the highest interest rates this side of payday loans, are structured to make it as psychologically easy for you to get into debt as possible, and can take you decades to dig out from once you’re in the hole (just ask my parents). If you’re not sure that you’re positioned to use them in a disciplined way, please stop reading now.
For those of you who still wish to proceed, let’s start with some background.
How Credit Card Rewards Work
There are essentially three flavors of credit card rewards systems:
- Cash back rewards: These cards give you a certain percentage of each purchase back as a statement credit on your card. These cards have their place, but won’t be the focus of this post as their churning opportunities are more limited.
- Co-branded cards with specific hotels/airlines/etc: These cards give you a certain number of points in a particular airline’s or hotel chain’s rewards currency (e.g., AAdvantage points, Marriott points, etc.). These cards often also come with status perks with the specific company and often a fast-track to earning loyalty status.
- Flexible credit card point ecosystems: These cards give you points in the credit card company’s currency (e.g., Chase Ultimate Rewards, American Express Membership Rewards, Capital One rewards, Citi ThankYou points). These points can typically be redeemed in three ways: statement credits, spending in the credit card company’s travel portal, and transfers to airline and hotel partners. I strongly favor transferring these points in most cases, as described below.
My personal credit card churning goal is to spend as little as possible on flights and accommodation out of pocket for my personal travel, and I don’t have strongly loyalty to any particular airline or hotel chain. Plus, the churning opportunities for the credit card ecosystems tend to be more lucrative. Therefore, I focus my efforts on the third credit card type, but YMMV.
Airlines and hotels vary in the effective redemption rate their points can get you, and credit card companies differ in the number and utility of their transfer partners and the quality of their travel portals, meaning that not all points are created equal. See TPG’s points valuation page (updated monthly) for details, but generally credit card points are worth more than airline/hotel points (because you can shop around for the best deal), and airline points are worth more than hotel points (except Hyatt’s).
Every card comes with a baseline points earning rate of 1-2 points per dollar, and many also have either stable or rotating bonus categories that earn you much more. It’s worthwhile to choose credit cards that align with your highest-spend categories and, if you have more than one, try to use the best card for each expenditure as much as possible (I’ll write a post about this soon). However, by far the best value to be had from credit card points as an academic is from introductory bonus offers.
How Credit Card Introductory Bonus Offers Work
The key to credit card churning for academics is to take effective advantage of various credit cards’ introductory bonus offers to amass a war chest of points that you can redeem for free and mostly free travel. Thanks to academics’ frequent opportunity to self-fund their work-related travel and other reimbursable expenses, we are very well-positioned to take advantage of these offers!
Here’s how that works: Credit card companies are willing to spend a lot to get you signed up as a customer, because they expect to be able to make a lot of money off of every new customer through a combination of transaction fees paid by sellers, cardholder fees such as annual membership fees and late fees, and interest when cardholders don’t pay their statement balance in full. To entice new customers, they frequently offer lavish introductory bonus offers (hereinafter, signup bonuses or SUBs) in which you will receive a princely sum of the relevant points currency if you meet certain criteria: typically, a certain amount of spending in a certain amount of time.
For example, as I write, the Capital One Venture card is offering 75,000 Capital One rewards points if you spend $4,000 in your first three months of card ownership. According to TPG’s 1.85 cents per point valuation of Capital One rewards points, that bonus is worth $1,387.50, for a rewards rate of 34.7% (=1387.5/4000). That’s pretty typical for the best credit card company point ecosystem SUBs. By comparison, one of the highest rewards rates out there is using the American Express Platinum card to book flights: at 5x bonus and TPG’s 2 cents per point valuation, this means your rewards rate is 10% on these purchases. So you can see why credit card churning for academics can be so much more lucrative than optimizing categories on non-bonus spending.
Anti-Churning Practices You Need to Know
Obviously, credit card companies don’t want you to take optimal advantage of their introductory bonuses. If everyone signed up for the card, collected the bonus, paid all their statements in full and on time, then canceled, they would lose a ton of money. To forestall this, credit card companies use a combination of two anti-churning strategies:
- Points clawbacks: From what I’ve read (it’s never happened to me), this seems to happen most when cardholders use the strategy I described above and cancel within less than a year of their starting date. For this reason, the consensus is that you should wait until after your next annual fee (if applicable) posts before canceling your card if you don’t with to keep it. (They’ll credit you back for the annual fee if you call to cancel within about a month of it posting on your statement.)
- New card rate and total limits: Credit card companies try to detect customers likely to take advantage of their SUBs by looking at how many new credit accounts they’ve opened recently, as reflected in their credit report. The most famous and strictest of these policies is Chase’s 5/24 policy, which means they generally won’t approve customers for new cards if they’ve opened 5 new credit cards in the past 24 months. (But see below for a huge exception.) They generally will only approve you for a new card about every 90 days or so. For more on each company’s current anti-churning measures and every other topic addressed in this guide, check out Reddit’s r/churning wiki page.
Entry-Level Credit Card Churning for Academics
Start When You Have an Upcoming Expense
The best time to start credit card churning for academics is when you have some large upcoming expenses. As an academic, a common example of this will be when you’re paying the costs for work-related travel up front, which often incurs costs of $2,000 or more. Many credit cards have minimum spend requirements (MSRs) for their SUBs in the $2,000-4,000 range, meaning that one conference will get you well on your way to a hefty SUB you can use to fund your personal travel.
However, perhaps obviously, any type of large, upcoming expense will do. Maybe you’re buying new furniture or appliances? That’s perfect. If you don’t have any professional or personal bulk expenses upcoming, see whether your natural spending rate on credit card-eligible expenses is sufficient to help you hit the MSR. If so, you’re good to go!
At the top of this post, I mentioned that this strategy is not appropriate for anyone who isn’t certain they can avoid accumulating high-interest credit card debt. Here, let me add that you shouldn’t spend (much) more in pursuit of these SUBs. If you fall into the temptation of increasing your total spend to accumulate these points, you’re spending real money on stuff you don’t need (or else you would have been buying it anyway) to fund the possibility of good point redemptions. It’s not a good trade.
Choosing Your First Card
The biggest question when selecting the first card you’ll churn is what points you’re able to easily use. If you live near a major hub for a particular airline, or if your university has an established relationship with a particular hotel chain, you’ll want to make sure that you’re racking up points you can use with those providers, either directly, through travel partner transfers, or through codeshare bookings. See here for a list of credit card transfer partners, and here for the list of airline codeshare partnerships.
Within the universe of points you can use, you want to get the best deal possible. Besides obviously wanting to maximize your rewards, many cards are limited in how often you can earn a SUB, ranging from every 24-48 months for Chase to once per lifetime for many American Express cards. To find a comprehensive list of the most appealing offers at any time point, check out Doctor of Credit’s running list.
Get Chase Cards Early
Because Chase offers a lot of awesome credit cards and has the most restrictive anti-churning rules, most guides recommend that you start by accumulating the Chase cards/SUBs you want first. I concur. In addition to the usual combination of international airline partners that almost all cards have, Chase has three all-star transfer partners that others don’t: United, Southwest, and Hyatt. United recently nerfed their rewards system, and Southwest points redeem at a flat 1.5 cents per point, but depending on your local airport situation these may be among the best options, and you don’t want to have to rely on codeshare bookings for domestic flights (which often aren’t available for short- or medium-term redemptions). And Hyatt in my opinion is usually the only hotel chain worth transferring credit card points to, often at rates of 2-4 cents per point (while Hilton and Marriott often redeem at <1 cent).
Chase’s points currency is Ultimate Rewards (URs), which can be transferred to any of their travel partners easily at a 1:1 ratio. However, it can be a little confusing because only three cards actually earn URs:
- Sapphire Reserve
- Sapphire Preferred
- Ink Preferred (a business card — more below)
But other non-co-branded cards’ points can be converted to URs if you have one of those three cards:
- Freedom Flex
- Freedom Unlimited
- Original Freedom card (not available for new signups but other cards can be converted into it)
- Ink Unlimited (business card)
- Ink Cash (business card)
Converting these cards’ points to URs isn’t a big deal — you just go to the UR page and transfer points from one of those other cards to the Sapphire or Ink Preferred, then you can transfer those to the transfer partners or use the points in the travel portal.
Typically, the Sapphire cards pay good SUBs but Freedom cards pay relatively small SUBs. If you want a bigger SUB after you get your Sapphire card, you’ll want to look at the Ink cards — the Unlimited and the Cash card often have good SUBs (albeit for high MSRs) and have no annual fee.
Once you’ve gotten your UR-earning/convertible cards, you’ll want to start accumulating co-branded cards for airlines and hotels you’ll use. Check out the United, Southwest, and Hyatt cards’ SUBs when you reach this point and prioritize according to the SUB size and how readily you can use those points.
Start Slowly
It’s very important that you start slowly with credit card churning and build out from there. In your first year doing this, I would focus first on getting the Sapphire and any appealing companion cards to build up a good stash of URs to fund your first point transfers (see my post on redeeming credit card points to fund personal travel when I get around to writing it). Chase will give you up to about 4 personal/business cards in a year. I suggest getting a Sapphire and the three highest-SUB companion cards with minimal/low annual fees, book a redemption or two, then reevaluate your strategy from there.
Non-Chase Card Issuers
When you’re ready to branch out from there, you can start checking out offerings from Capital One and American Express. Here are a few quick thoughts on those:
- American Express offers some eye-popping SUBs and amazing benefits, but also charges the highest annual fees in the business. These cards can be highly lucrative, but making maximum value from these cards depends on you being on top of all the various credits they offer. I recommend moving onto these cards only after you feel confident in your ability to juggle various cards fees, credits, and SUBs.
- Capital One offers a few solid cards worth considering if you can use their transfer partners (which are decent but not as good domestically as Chase and American Express). If you want to keep things as absolutely simple as possible while earning a good SUB and solid travel benefits and transfer partners, the Venture X is an excellent card with great value. It has a $395 annual fee, but comes with a $300 annual travel credit for trips booked through their portal, and a 10,000 point annual membership bonus (worth $185 in TPG’s current valuations), meaning that if you’re able to use the points and get the credit every year, this card is easily a net money maker. Plus you get 2x points on all purchases with no categories to worry about, and nice benefits like primary car rental insurance and strong travel and purchase protections. Other appealing cards from Capital One include the classic Venture and the Savor cards.
Advanced Credit Card Churning Strategies for Academics
Business Card SUBs
Business Card Advantages and Tradeoffs
Business cards offer some significant advantages. The biggest is that unlike personal cards, they do not count against your credit card totals for the anti-churning practices noted below (evidently with the exception of the Capital One Spark cards, which I therefore do not recommend). This means that if you’re accumulating cards from issuers with policies like Chase’s 5/24, you can intersperse these personal cards with business cards if you can support more spend.
The other big advantage is that these business cards often come with very large SUBs. For instance, as I write you can get a 100,000 UR bonus on the Chase Ink Preferred and 90,000 URs on the non-annual-fee Ink Unlimited. In contrast, the personal Sapphire cards are currently offering 60,000 UR SUBs. However, business cards’ higher SUBs typically come with higher MSRs; for instance, the Ink Unlimited SUB has a $6,000 MSR while the Sapphires have a $4,000 MSRs. Hitting the MSRs on these business cards can be very lucrative, but you need to have a plan for hitting these large MSRs that don’t require you buying a bunch of stuff you don’t need. If you need a little help hitting these MSRs, see the next section.
But I’m a professor, not a businessperson!
The most common objection to posts encouraging would-be churners to look into business cards is that they’re regular people, not business people. The key thing to know here is that issuers’ definitions of a business are very broad. Do you ever get paid to review grants or tenure packets or textbook materials? Do you do any consulting? Do you sometimes earn speaker honoraria? Do you ever Airbnb your house or resell things online? In other words, do you earn any money besides from your job? Congratulations, you have a business!
As part of the application process for these cards, you’ll be asked to describe your business. If you have a business of the sort I just described, characterize it as a sole proprietorship with your name as the company name. Tell the truth about your activities and earnings. If you do even a minimal amount of the above (I claim about $1,000 earnings per year) and are otherwise eligible, you’ll likely be approved. At least, I always have been.
Manufactured Spending
Basics
Manufactured spending, or MS, is a catch-all term for a collection of techniques to increase your spending to hit MSRs in ways that you can easily recover so that you ultimately don’t actually increase your spending. This is a highly-advanced topic in credit card churning with lots of opportunities to screw things up, so I only recommend this if you’re highly confident, organized, and can financially handle a setback or two. As with churning generally, even if that describes you, I highly recommend taking this slowly and building out.
Any manufactured spending strategy involves you purchasing things that you can relatively easily convert back to cash in your bank account, which you can then use to pay off your credit card bill. You can use this ‘spend’ to hit MSRs for big SUBs or just to earn lucrative bonus category spend points.
Common Strategies
I won’t go into a great deal of detail here, but the major approaches are as follows:
- Gift cards: These are the bedrocks of most MS strategies. This works best if you can buy gift cards without activation fees in formats you can easily use. This comes in two sub-flavors: pulling future spending into the present to hit MSRs to gain SUBs (then using the gift cards instead of your normal spending method thereafter), or buying gift cards for companies you regularly buy from that aren’t in high bonus categories at a retailer that is a high bonus category. See below on how I use the latter strategy.
- Funding bank and investment accounts: Many bank and investment accounts will allow you to initially fund your account with a credit card. The amounts allowed range from $50 to $5,000. Typically you’ll need to leave the money there for a minimal amount of time, and you’ll need to check that your credit card company will treat this as a spending transaction rather than a cash-like one — Google is your friend on this topic, as is Doctorofcredit.com if you’re stacking your credit card churning with bank account bonus games.
- Money order games: It seems like the easiest ways to do this in the past, such as at Walmart, have been shut down. The internet tells me that you can still do this at many regional grocery chains. The classic idea is that you buy a money order for some minimal fee, then deposit it in your checking account and use those funds to pay off the charge on your credit card, leading to very high potential free spend. I don’t think that classic version works anywhere anymore because credit card companies will treat these as cash like transactions and/or money order companies don’t accept credit cards, but I could be wrong. A more advanced version involves buying gift cards first and then using those cards to buy the money order so that both the credit card issuers and the money order issuer view these transactions as acceptable. The latter has never worked for me, but evidently works for some.
- Micro-loans: Many micro-loan websites such as Kira will accept credit cards. Typically your loan will be due repayment in a set number of months, so you’re effectively loaning out the money in between. If you’re interested in this approach, there are guides online on how to identify the highest likelihood of repayment loan options. Many prefer this approach because they view it as an opportunity to help others while helping themselves.
What I do
After experimenting with several of the above MS techniques, I’ve decided to keep it simple. I periodically check doctorofcredit.com for posts on waived activation fee Visa and Mastercard gift cards at my local office supply store. When these occur (every two months or so), I go buy a few using my Ink Cash card (no annual fee and 5x on office supply stores), use these to pay for my next few Walmart grocery orders (my Walmart+ membership fee is covered by my Amex Platinum card), and then put the remaining balance of each gift card on a rechargeable Amazon card. This way at 2 cents per UR point valuations I effectively get 10% back on all my Walmart grocery and Amazon purchases, which are a large portion of my discretionary spending. The main tradeoff is having to go buy them in person, apologize to the clerk for their hassle in activating each one, and then entering all the numbers into a spreadsheet to track them and activating them all, which adds up to a couple hours per batch. Even better is if you can use such a strategy to earn a big SUB. To me the hassle is worth it, but YMMV.
Final Thoughts on Credit Card Churning for Academics
Because academics are frequently either required or able to put work travel on their personal credit cards and then get reimbursed for work-related travel, they have significant ability to earn several large credit card SUBs every year. And with a bit of organization, you can extend beyond this to earn more SUBs than your income and spending would normally support.
The potential payoffs are big! You can:
- Book personal flights and hotel stays for free or nearly free
- Fly in premium economy or business class on personal or work travel with no out of pocket costs of upgrading
- Stay in nicer hotels than you could otherwise afford
Soon I plan to write a post about optimal point redemption strategies for academics. Stay tuned!