Why I Don't Follow a 91-day Churn Rule
The idea behind the "churn" is to get as many cards with bonuses as possible, all in 1 day, and repeat the cycle every 91 days. Since signing up for new cards is central to how I acquire miles and points for my family, I investigated it further. We don't have any business expenses and don't fly often, so it's crucial to get it right the first time we apply. There is a method to this madness for sure.
Some credit inquiries get combined if the cards are issued by the same bank and if applications are done in one day. The inquiries all fall off at the same time at a 2-year mark. Some banks look back only 6 months, so they will only see one set of applications if they are spaced 91 days apart.
There are 3 major credit agencies: Equifax, Experian and Transunion. The best bet is to spread the applications between all three of them . If the bank pulls a specific agency and sees too many inquiries, it looks bad on paper. They might assume you are looking to max out your cards, flee the country and settle down somewhere in Tahiti. Hmm, are you thinking what I'm thinking?
Banks pull different agencies depending on your location. The goal is to spread your inquiries between all 3, so not to have more than 10 pulls in 2 years at any given one. People go beyond that amount, but I'm not comfortable with that. If you have a major loan or mortgage coming up, you should stay away from any new credit cards for two years.
As I mentioned earlier, the inquiries fall off at a 2-year mark. You can find out which bank checks which agency on www.creditboards.com, choose section “credit pulls” and put in your data. Be aware, it may not be accurate as of now.
The 91- day churn schedule is supposed to greatly minimize your chance of denial. I think this technique has merit to it, but I still don't follow it. I simply apply when there is a good offer with $300-$400 in value, whether miles, cash or hotel points. However, your threshold may be different from mine. There are several reasons for me not following a set schedule:
1) There is no guarantee the inquiries will be combined. Citibank sometimes pulls different agencies for different cards. I don't want an extra pull for an inferior offer (like 50,000 Hilton points, which I value at $125) to potentially cost me a good offer in the future.
2) Even if the inquiries are combined, the new card still shows up on your report and your average age of accounts is diluted. Even though it's a relatively small part of your credit score, I keep an eye on it since my history is shorter than some.
3) In the event of a credit card denial in the future, I may have to call the reconsideration line and try to reverse the decision. It looks weird to a credit analyst when they see 5 applications made all in one day in the past. Hmm, I was bored since I am SAHM and felt like applying for a bunch of cards to cheer me up? I would rather not face that question and have to come up with a ridiculous excuse.
Here is the strange part I discovered when I looked at my last 3 applications. They were 91 days apart! Not on purpose, it just accidentally worked out that way.