Economics of Churning: Who Pays for Those Credit Card Bonuses?

An interesting post on Reddit caught my eye called "The Economics of Churning: who pays for the rewards?"

("Churning" is the milesphere's term for opening cards, getting their bonuses, closing the cards, and repeating.)

While I don't agree with the post's conclusions about who pays for rewards, it does present a lot of interesting information for anyone who wants to understand the business of credit cards a little bit better.

Poster Buddy5000 writes:
I do have an undergraduate and graduate degree in business.

The Top 5 Business Credit Cards

Many people can get a small business credit card. Opening small business cards roughly doubles the number of amazing miles and points cards available to you.

Every small business credit card I’ve gotten I opened by putting my social security number as the tax ID, and by saying that my business is a sole proprietorship.

Rundown of Retention Bonus Offers for Citi AAdvantage Cards

Retention bonuses are not automatically offered by the Citi AAdvantage cards, but are still possible to get if you call and speak with a Citi representative. All it takes is a little of knowledge of what they want (or don't want) to hear.

Limited Time 50,000 Delta SkyMiles Bonus

Until November 17, 2015, the Gold Delta SkyMiles Credit Card is offering 50,000 bonus SkyMiles after spending $2,000 in the first three months, and a $50 statement credit after your first Delta purchase during the same period.

The normal bonus is 30,000 miles and no statement credit.

Contents of this article:

Offer details
My valuation of the offer
Are you eligible for the bonus?
Best uses of SkyMiles

Offer Details
The Gold card is the “standard” airline credit card.

50,000 bonus SkyMiles after spending $2,000 in the first three months
2 miles per dollar on

50,000 Hawaiian Mile Sign Up Bonus, and How to Use Them

Log into your Hawaiian Miles account or create one and log in. You should see an offer of 50,000 bonus Hawaiian Miles after spending $1,000 in the first 90 days on a new Hawaiian Airlines World Elite MasterCard from Barclaycard. The offer expires November 30, 2015.

This offer is a big improvement on the normal 35,000 mile sign up bonus on the card.

What to Do If You Aren’t Instantly Approved for the Citi Prestige

This offer is expired. See the new offer and analysis here.


A few readers have reported to me that they applied for the Citi Prestige® Card and either got a response that their application was pending or denied. What are their options?

The Citi Prestige® Card has been one of my favorite cards since I got it in March.

Citi Retention Call ThankYou Premier, AAdvantage Executive

The ThankYou Premier's offer has expired. Click here for the top current credit card offers for free trav

I got the Citi Prestige® Card this week. (Here's why I got the Citi Prestige.) It makes two of the other cards I have less valuable.

The Citi ThankYou® Premier Card is flipping its category bonuses on April 19 to nearly mirror the category bonuses I'll have with the Citi Prestige® Card.

How Long Will the 50,000 Mile American Airlines Offers Last?

Now is a special time to earn American Airlines miles.

The personal American Airlines credit card is offering 50,000 bonus miles after spending $3,000 in the first three months.
The business American Airlines credit card is offering another 50,000 bonus miles after spending $3,000 in the first three months.

The personal deal has been the official offer since late October and the business deal since late November, so they've been around for three and two months respectively.

How much longer can we expect these amazing deals to last?

First, a quick word on why the deals