Churn Rate (or Churning)

The churn rate is the rate at which subscribing customers leave their particular contractor during any given time period. In the case of credit cards its the percentage of customers that leave their providers for better deals."Churners" are generally tempted by better offers and free gifts etc from rival companies, but often go round and round different companies looking for the best deals as they appear, returning to the same company they started with. Churning can allow you to keep the lowest possible rates on your balance transfers, but there are still pitfalls that you need to be aware of.

• With each application for a credit card, loan or utility, you credit score/report will be checked. Lenders don't look kindly on customers who apply for credit cards on a frequent basis in a short space of time which in turn will lower your overall credit score.
  
  
• Credit card providers favour their long standing customers more than short term customers as they know their payment history and can offer better rewards.
  
  
  
• Churning may not be worth it; as constantly changing your card issuer is a time consuming process which may only give your very slight savings off your monthly bill. So make sure it is really worth it.
  
• By contacting your issuer before you leave them they may be able to offer you a better deal than the rival company you are moving to.