You may have done it yourself. Signed up for a credit card just to get a special offer and then not used the card again after you nab the introductory bonus. But now, some banks are cracking down, making it more difficult to earn when you churn.
Stephanie Miley always wanted to go to Hawaii. But she never had the cash. So, she started signing up for credit cards to earn the trip for free.
"An eleven-day trip, including airfare and hotel stays. We would have had to have save up for years and years," she says.
She stacked up the cards, earning free flights off one, a free hotel off another. It's a practice known in the banking world as "churning." Consumers apply for credit cards specifically for the large sign-up bonuses like cash, points, or miles.
"Credit card churning can give thousands of pointsthousands of dollars in value. They can help you travel for free," says Sean McQuay of NerdWallet.
McQuay says banks offer these bonuses to bring in ---and keep--- new customers. They don't want you to bag the bonus and then cancel or churn.
Now some are cracking down.
Citibank gives bonus points only to consumers who haven't opened or closed the same card within the last 24 months.
American Express restricts even further, allowing only one bonus per product per lifetime.
And, a Chase reps tell us, "Customers who open multiple card applications in a short period of timeregardless of issuerwill likely encounter difficulties."
"They're struggling to find ways to clamp down on churning without really turning off consumers," says McQuay.
McQuay says banks are also hoping to cut down on what's known as "manufactured spending." For example, buying gift card with your bonus card, just to pay off the bill with the same money.
"Banks are quickly clamping down on these," he says. "Now at many checkouts you can't buy gift cards with credit cards because they're trying to stop that activity from happening."
Manufactured spending also includes when you earn points by paying someone (friends/family) via a payment app like Venmo, PayPal or Square. Then you have that person pay you right back. You earn the points or bonus without ever really spending any money.
As for Stephanie, she says she's fine playing by the rules, but she plans to continue to fly high with her travel bonuses.
"I think part of the fun is the challenge in it," she says. "Finding that deal, finding that great card. And then saying, 'Yeah, we got this entire trip on bonus miles! How great is that?"
Remember, each time you open a new card there's a credit check, which can lower your score.
And having a lot of new cards will decrease your average length of credit, which can lead to a drop in your score.