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Ever Consider Churning Bank Accounts?

The following is a guest post from from financial analyst and early financial independence advocate, Will Lipovsky, at First Quarter Finance.  Please join me in welcoming him to the blog today!

Churning credit cards is a pretty common practice. You sign up for a credit card during a special promotional offer. Then you meet the card’s usage requirements in order to get the special offer, usually cash or points. After the new card owner has reaped the reward, he cancels the card and repeats the churning process. It’s a very profitable strategy. Heck, it’s how Stefanie went to Europe for <$25.

I see posts about churning credit cards all the time. But what about churning bank accounts?

Ever Consider Churning Bank Accounts?

I’ve been churning bank accounts for years. It started when Wells Fargo made me mad so I sought a new bank. Good customer service can be found at many banks. So can online bill pay, etc. So the biggest differentiating factor is what kind of signup bonus they offer! Show me the money!

Also, I work for a huge financial services company. I work occasionally with a program that calculates reward payments for banks.

I know the bank account churning system – inside and out.

If you can churn credit cards, bank accounts are easy.

So to add to the credit card churning game, I recommend churning bank accounts. The promotions are anywhere from $50-$400 typically. Anything less than $100 isn’t worth my time.

My 2 Favorite Places to Find Promos:

My Bank Tracker

Deposit Accounts

Watch for Location Eligibility

Some banks only offer rewards for certain states. If the bank name doesn’t sound familiar, you probably don’t qualify. However, I have gotten lucky. Once I got $150 from a bank in Boston and I’m exactly 1,497 miles away.

Watch for Promotion Expiration Dates

Promo periods are short. If you see a new offer you think you’ll qualify for – act fast. Many new promos are only open a month or two.

Avoid Hard Credit Pulls

Opening and closing bank accounts will not impact your credit score unless the bank does a ‘hard pull’ to check your credit. 99% of banks don’t do it but check before. Knocking your score down with a hard pull is probably not worth $100. Also, there is a sort of banking credit system they sometimes use to make sure you’re not going around town collecting free toasters. But I have to find a banker who can explain to me how it’s done. So no one really cares to check your banking history just for a checking/savings account. Getting approved for a new account is about as easy as getting approved for a payday loan.

Read the Fine Print

Rewards are sometimes confusing. You may have to set up direct deposit, set up automatic billpay, make a high initial deposit, ask the cashier to ring up 15 peppermint patties separately in order to meet the necessary number of transactions… Make sure you’re ready before you sign up for the account.

The Squeaky Wheel Gets the Grease

A bank once had in teeny weeny print that ‘all new accounts are open to individual new account bonus approval.’ In other words, they can wait ’til you’ve jumped through all the hoops and then withhold your bonus just for giggles. A bank did this to me once (a terrible bank that will go under soon). I complained though and eventually got my cash.

Why Do Banks Do This?

It’s to ‘get you in the door’. Banks actually lose money on checking/savings accounts. They know they will lose money on promotions. Heck, it costs most banks $250 on average just to open a new account! It’s ludicrous, I know, but I work with costing every day at work. They want to get you in the door so you will get a mortgage or some other kind of loan. That’s where they make the money. A checking account is like a gateway drug.

Final Thoughts…

Churning makes me think of ice cream.

Also, I don’t churn too terribly often just because the promotions are fairly limited. Fun fact: In the late 1980’s there were more than 18,000 banks. Today there are <7,000. But making hundreds of dollars for swiping a debit card a few times is pretty easy money. Just make sure you don’t spend a ton in order to meet the requirements.

But possibly the greatest benefit of churning bank accounts is that you are guaranteed to find some fantastic banks out there. You get to experience multiple institutions. It’s like dating – go on enough dates and you’re bound to find someone special.

Have you ever considered churning bank accounts?


Will Lipovsky writes about money at, where he helps others create lifelong wealth ASAP. Outside of writing, Will enjoys cycling, cars, the interwebs, the outdoors, exercising, and sweets. Good thing his writing isn’t so full of contradictions. Follow the life of Will and his blog on Twitter.


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