Everyone wants to rack up their rewards to earn free flights, hotel stays, cruises, and discounts. And travel credit cards give consumers the opportunity to get these rewards fast. Many of these cards even have special introductory offers, allowing cardholders to earn thousands of free frequent flier miles as part of the sign up bonus.

In the hopes of earning more rewards, consumers have started churning credit cards. This is the process of opening multiple credit card accounts to earn the introductory travel bonuses, then closing these accounts soon afterwards to avoid any fees. Oftentimes, consumers apply for several cards in one day, known as an “app-o-rama,” to get the maximum amount of frequent flier miles. Travelers can accumulate hundreds of thousands of miles by churning. With this amount of miles, they can easily stay in luxury hotels and fly to international destinations. As a result, this practice is becoming increasingly common among travelers and credit card users.

Credit card churning sounds great in theory. Cardholders can rack up a lot of miles, and travel without worrying about annual fees, interest charges, and normal credit card issues. However, there are a lot of risks to credit card churning. Take a look at the following before you start churning cards:

• Churning can damage your credit score significantly. Whenever you open a new credit card, your credit score takes a small hit. Opening multiple accounts at once can result in significant damage to your credit. Plus, lenders will wonder why you are opening so many accounts at once. They may see you as financially risky, so you will be denied from credit cards and other loans. This can also hurt your score. Plus, a large part of your credit score is your payment history. With a lot of different cards, you are more likely to slip up and miss a payment or get into debt. These will all lower your credit scores. Last, by closing accounts, you get rid of payment history while simultaneously increasing your credit utilization. This in turn can hurt your credit score a lot.

• By churning, you may end up paying extra fees. If you do not close the credit card within a year, you’ll have to pay the annual fee. And if you are unable to make the minimum payment each month, you’ll end up having to pay a lot in high interest charges. Furthermore, many rewards programs have certain terms to get the rewards. If you are unable to keep up with the payments, you may lose your frequent flier miles.

Do your homework before you start churning cards, because credit card churning can come at a huge price. Although you may be able to earn thousands of rewards in theory, it may end up doing more harm than good. And the price of having a bad credit score is not worth a luxurious trip to Paris!

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