I often hear about people who practice "churning" - they take advantage of various promotional offers on credit cards by rapidly applying to many credit cards and closing them as soon as the benefits are done. Supposedly one can save a lot of money or get valuable things for free this way. (churning can actually be used for many different things, but here I'm specifically asking about credit cards)
When I did research for my actual credit card, I noticed that there are indeed many promotional offers you can get. They seem to fall into the major categories of:
- Cash back points for an effective discount of 1-5% on all purchases
- Discounts on shopping and services like hotels
- Flight miles and similar service credit for things like Uber
- For very up-market cards, free services like airport lounge access, travel agent, concierge, road assistance
However, on looking closely I always found that you can't really get any significant benefit out of these:
- The cash back is never very large. Some like to argue that even 1% on many purchases adds up, but 1% is 1%. In some special circumstances you can end up getting around 5%, and if you budget just right you end up saving a few hundred dollars a year (the points are usually capped as well). Which isn't small, but also not a huge sum.
- The individual discounts are rarely useful, since they are often things you wouldn't buy anyway. Even if they're the kind of product you want, chances they're overpriced even with the discount, so you could find better alternatives for less. I don't recall ever seeing a truly good deal from a credit card that is something I actually want at the time, and even if it happened it is clearly so rare as to be insignificant in the long run.
- The miles and credit either come with hefty annual fees, or require you to use the service a lot to claim the credit. So you never get, say, $100 a year of free Uber rides - you get maybe $100 of free rides after you've already spent $1000 on them that year. Similarly with plane tickets, you usually have to spend a large sum on tickets that year to get your free plane ticket, or pay a very large annual fee.
- These free services always come with steep annual fees and you would probably be better off just getting a cheaper card and paying for them normally.
So it seems like you can't really get much out of these credit card promotions, and people who claim to be prolific "churners" must be going to a lot of effort to save pennies. I can see how if you're lucky enough to have your normal shopping habits match your credit card you can benefit significantly. But based on the pattern I've seen, if you're such a person you'd benefit even more from changing your shopping habits.
Is it ever possible to derive some kind of tangible financial benefit from a credit card that is not trivial compared to the money you spend with that card (including fees)? Are there any examples of this, either from credit cards currently available or that were available in the past, and are not due to outright fraud or bank error?