Banks Cracking Down on Credit Card Churning

Banks Cracking Down on Credit Card Churning
Credit card churning has become a little harder. Photo: Adobe Stock.

Right now, Australia’s banks are offering more credit card sign-up offers – with higher amounts of bonus points available – than ever before. These offers of up to 150,000 bonus frequent flyer points, just for applying for a new credit card, are great for frequent flyer point collectors!

However, banks are also getting smarter about their credit card promotions. In an attempt to crack down on credit card churning, these sign-up offers are also now coming with more strings attached.

Credit card churning is lucrative

A lot has changed in the Australian credit card market since the RBA began regulating interchange fees in 2017. In general, you’ll now earn fewer points for everyday spend on your credit card. Yet, most banks are now offering higher amounts of bonus points to new customers as an incentive to apply for their cards. As a result, credit card churning is now an even more lucrative way to earn points compared to everyday credit card expenditure.

The basic idea of credit card churning is to apply for a new credit card, receive the bonus points for signing up, then cancel the card.

The credit card churning cycle
The credit card churning cycle

For banks, the problem is that it costs money to offer frequent flyer points to new customers. In general, it’s worth this investment as most new customers will keep their credit card for a long time and be profitable in the long term. On the other hand, it’s unlikely to be profitable for a bank to give away 150,000 frequent flyer points to a customer that then cancels their card after a few months.

The nature of credit card sign-up offers is changing

Traditionally, banks would award the full amount of bonus points up-front to new clients that applied for a credit card and spent the designated minimum amount within 3 months of opening the card.

There are still plenty of these types of offers available in Australia. Of the 59 current personal credit card sign-up offers in Australia where bonus points are available, 49 of these award the full amount of points as a lump sum.

But 4 of these offers require you to spend a certain amount of money each month over several months in order to earn the full amount of bonus points. And 8 offers won’t award you with the full amount of bonus points unless you renew your card for a second year.

From a bank’s perspective, this makes sense. If you have to renew your card for a second year, the bank collects a second annual fee. If you are spending more money on the card over a longer period of time, the bank will also earn more in interchange fees. But, most importantly, they’re assuming you’re less likely to cancel a credit card that you’ve already had for over a year.

Although the “lump sum” offers are still the majority, Australian Frequent Flyer has noticed a steady increase in the number of offers which require a longer-term commitment over the past year or so. We expect this trend to continue.

Examples of credit card offers that require a longer commitment

As an example of this new trend, you can currently earn up to 150,000 bonus Qantas Frequent Flyer points by applying for a Citi Premier Qantas credit card. The $395 annual fee is even being waived for the first year. However, with this offer, if you spend at least $5,000 within the first 90 days you’ll only receive 100,000 Qantas points. You’ll only receive the other 50,000 bonus points in a years’ time, if you renew your card. Of course, the annual fee is not waived in the second year.

Another current sign-up offer is for the Virgin Money Velocity High Flyer credit card. The headline offer is 100,000 bonus Velocity points for new applicants. But these points are awarded in increments. You’ll receive 25,000 bonus Velocity points for each month that you spend at least $3,000 during the first 3 months of holding the card. The final instalment of 25,000 Velocity points is paid out if you renew your card for a second year.

In a more extreme example, Citibank in late 2018 began offering 410,000 bonus Citi Rewards points with one of its cards. But, to earn the full amount of bonus points, you would have had to spend at least $1,000 per month on this card every month for the first 20 months.

There are still plenty of lucrative opportunities

To be clear, these are still very good promotional offers! They just require you to keep the card for a bit longer, and in some cases to process a bit more spend through it. Given the high amounts of bonus points on offer, this will still be worthwhile for most people!

If you’d like to learn more about credit card churning, this informative AFF thread contains lots of useful information: Advice on limits for applications, and more.


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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]
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Does anyone have any insights into what churning does to your credit rating? I’ve been told the regular credit inquiries are not especially helpful, even if you always pay off your cards in time. Is this true?


I’ve churned a few, never came up when I applied for a loan for my investment property, remember, you are cancelling the card, not defaulting on it.


Subscribe to credit savvy, get credit score etc.

These credit enquires do have an impact on your credit score, but to what extent it hinders future credit is harder to judge. I have ‘heaps’ of credit card enquires and had no problems getting home loans. I have difficulties changing power company however.


I am not sure what churning does to one’s credit rating, but I know I have been knocked back for new credit cards after accruing over 40 credit enquiries on my file over a 18-24 months period. Other than the shear number of enquiries I cannot think of any other reason why my last couple of credit card applications were knocked back. I have not had any new enquiries on my file for just shy of a year. I *might* apply for a new card on the next month or so… we’ll see…


Last Friday I received my new Qantas Platinum card in the mail. Within hours of activating the card they applied the $199 manual fee ($299 next year). This is usually done at the end of the first billing cycle so it doesn’t matter but it amused me. I had cancelled my previous Qantas card in November 2018 so am ok for the 120,000 bonus sign on points. These are spread out over 6 months and you need to spend $1500 a month so not difficult. I like this card because it earns 1 FF point per $1 but will cancel… Read more »

Seriously Alan how much $

Robert, my husband was Plat 1 with QF. On QF Metal min 3 times a week. We were taking 4kids J to Europe in Sept. He passed very unexpectedly in the Aug. I Immediately transferred max points to my account. One of his staff without telling me, notified QF of his passing. ALL 500K points lost. QF not once called to verify, nor asked for proof.So moral of story, don’t ever loose your Boarding Pass with your Plat FF Number on it as someone could potentially call QF to cancel your account in which you wouldn’t know about it till… Read more »

Richard Olive

Some years ago one of my staff members was killed in the crash of a private plane in the Philippines. He was a frequent Qantas traveller, and had a healthy points balance. His PA advised Qantas of his death. Bad move!! Their form of condolence was to immediately wipe his points balance. Apparently, the rules of the scheme state that when you die your points die with you. Moral of the story: Make sure that your nearest and dearest has your PIN so that he/she can transfer the points to family members before Qantas knows of the death. Or, if… Read more »


The new Ultimate card from CBA is obviously targeted at retaining customers. With the minimum spend of $2500pm to avoid the heft fee, they are clearly wanting to attract the customer that is going to use this as their primary or sole credit card.


Too bad for them- churners (always pay full balance, on time) will take their business elsewhere.
Good luck big 4 – they are smart enough to shop around – they won’t settle for your crumbs.

Here is a crazy idea – perhaps you could share some of the profit from interchange fees? That will keep them happy…

Ahmad M

Churning can also adversely affect your credit scores


I don’t understand why people would spend anywhere between 18k to 30k on a credit card pa, to earn some FF points, when they can buy a full business fare for less than half that price.

Ed Blackwell

Nice if you can get the points. Sign up bonuses in New Zealand are a pittance compared to those in Oz