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Banks often do lose money from churners, that’s why they’ve been trying to crack down on them.Banks make money from credit cards in the following ways:Annual fees: ranging from around $100 to $200 per year for commonly churned cards, but sometimes going up to around $450. Many cards waive the first year annual fee.Transaction fees: these are very complicated as they usually have both a fixed and proportional component. They also go to many different actors (the bank, the credit card network - Visa, Amex etc. -, as well as all sorts of middlemen). As a ballpark estimate, let’s assume the bank makes 3% of the transaction[1].Interest rates. This does not apply to churners as the first rule of churning (and, frankly, of personal finance in general) is to pay your full balance every month, but for many ordinary people these can be substantial.Selling your data. It is hard to estimate how much they make from this, but I am going to assume this is negligible since this is a relatively new development[2].So what happens when a churner gets one of their credit cards with a high bonus? Well, let’s take the example of a customer getting a new Chase Sapphire Preferred:As of this writing, the Preferred offers 50,000 points after spending $4,000 within the first 3 months of account opening. It has an annual fee of $95 which is waived the first year. We will assume each point costs Chase around $0.01, which is the value they have when redeemed for cash back[3]. In short, it is pretty typical of high-signup bonus credit cards.The typical churner will spend almost exactly $4,000 in the first 3 months, getting the signup bonus plus 4,000 points from the ordinary 1 point per dollar reward. They will then almost completely ignore the card and cancel it before the end of the first year to never have to pay the yearly fee.This means that Chase will give them $540 worth of points, while they get $0 from the annual fee, 3% of $4,000 = $120 from the transaction fees, and an unknown but probably very low amount from selling the churner’s data. In total, they will lose around $420 from this customer (and this is a conservative estimate).So why does Chase do this? Because for every unprofitable customers like the one we described above, there are many customers to whom churning never occurred and who will remain loyal for years, and many other people who intended to churn the card but ended up using it everyday and keeping it for years.Indeed, this population of wannabe churners who end up as profitable customers has long caused banks such as Chase to advertise on blogs that openly advocate churning such as The Points Guy.That said, more and more credit card companies are taking action against churning, showing that a larger and larger proportion of their customers have been of the unprofitable type described earlier. Here are some examples of recent anti-churning policies:American Express has a Once in a Lifetime clause according to which one can only get the signup bonus for a given credit card once. Eg, you couldn’t cancel an Amex credit card, then apply for the exact same card again and get the bonus again.Welcome bonus offer not available to applicants who have or have had this product.[4]Likewise, Amex reserves the right to take away your signup bonus if they feel like you are churning their cards.If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer (s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit Membership Rewards points to, we may freeze Membership Rewards points credited to, or we may take away Membership Rewards points from your account.[4](emphasis mine)Chase is famous for its 5/24 rule, according to which they will not approve any customer who has signed up for more than 5 credit cards (with any bank) in the past 24 months. Churners are likely to sign up for new credit cards every 3 months or so, for an average of 8 credit cards in 24 months. As a result, many churners have given up on Chase credit card as they argue they aren’t worth the 5/24 rule[5].Most other banks are still “churnable” according to this list, but it is no coincidence that Amex and Chase give some of the most generous bonuses in the industry.As churners turn to other issuers such as Citi and Barclaycard, it is likely that they too will start creating rules to prevent churning. In the end, it is likely that churning is going to keep becoming harder and harder as well as less and less profitable. There will always be some customers who cost credit card companies more than the revenue they bring in, but $400 differences like the ones I described should become quite rare in the next few years.[1] 3% is an overestimate since this is close to the largest transaction fee out there, and not all of it goes to the bank.[2] What Chase And Other Banks Won't Tell You About Selling Your Data[3] According to What Are Points & Miles Worth? May 2018 Values - The Points Guy, they are “worth” $0.022, which indicates that $0.01 might be an underestimate, but note that this 2.2 cents value is obtained when redeeming for miles, which Chase might have bought at a discount, so it is not a good proxy for the cost to Chase.[4] Terms, Conditions & Disclosures[5] Why The Chase 5-24 Rule Is Worse Than Amex's Once Per Lifetime

What can kids do when daddy decided to borrow a bunch money? Look at this website:U.S. National Debt Clock : Real TimeAstonishing, right? 104%+ of GDP for USA. Immense is no joke. Daddy said to everyone, not to worry, daddy ain’t going broke when daddy can make all the payments.Remember Chevy Chase in Fletch?Uncle Sam’s wallet is filled with endless amount of credit cards plus debt instrument called notes, bonds, and/or debentures. Moody said Good credit rating and banks are giving a thumbs up because US has a lot of assets in green. What debt when there are plenty of collateral. It’s not like other countries who couldn’t make payments. Uncle Sam is trustworthy even though the interest is like a slow killing poison.Furthermore, Uncle Sam can print money. Common sense tell us that you can’t spend more than you make but hey, tell that to deaf ear daddy and it’s in one ear, out the other. Why Bernie can’t win because he is a Democrat with big dreams and no means to pay for them. Trump on the other hand could careless. He was surprised to get elected and like a bull in the china closet, he can run the country further into debt and shut the door to the outside while cutting taxes to the 1%.I do have a solution, wait for my book which I hope to finish soon. No new taxes and provide a stream of revenue to pay off all the debts. Wait for it.

Why do some people have so many credit cards? If I have just two and use mostly only one, am I missing something?I’ve acquired my credit cards (they number over twenty) over the years as a result of some perk or benefit. Many of them offered a temporary zero percent interest period or have unique travel perks or generous sign-up bonuses.For a long while I used the Bank of America cards and used them for the travel points. Then Chase came along and tempted me with their huge sign-up bonuses and awesome travel portal (so easy to use and you get a 25% discount on your points), and now I have the Freedom (for rotating bonus points in various categories), the Slate (because of a zero percent interest offer) and the Sapphire (for restaurants and travel bonuses). Plus I have Chase Ink business cards for its 4X points for office supplies. So I rarely use the B of A cards anymore.I almost never cancel any of my cards because their limit contributes to my overall credit utilizaiton, which raises my score. Occasionally the company itself will cancel them for non-use.The price I pay is having to keep track of them all. The worst was when a once-a-year subscription hit a card that I’d put in a drawer, and not finding out about it until a few months later (ouch!).I recommend that people have at least two cards, even if you mainly use only one, because if it gets suspended for some reason you always have the other one.Also you always want to keep your oldest card active, because that’s probably your longest credit history.And if two works for you, that’s fine. But credit card companies are always trying to outdo themselves these days. If you enjoy credit card perks, you might want to keep up on the new card offerings (my favorite website is The Points Guy, who regularly reviews card benefits and gives hints and tricks on how to maximize your perks) and see if there’s anything better out there than your old faithful standard card.