Depending on how much cash you have sitting around, I have heard of people on /r/churning pulling that amount in from credit card and bank bonus churning.
Is this still possible? I thought the strategies for this were closed.
The general method would be to open a cash back credit card with lucrative bonuses/incentives and then figure out a way to spend money on the credit card yet have it return back to you at a lower cost than the rewards rate.
I am not aware of anyone successfully pulling off that trick at scale anymore. And even if it were possible, I believe it might cause tax headaches.
Gamging credit card sign up bonuses works well for say an international vacation or two a year, but beyond that I'm not sure it's worth the time.
Given your alias that includes the name bitcoin, I tend to believe there are still arbitrage strategies in crypto markets that would meet the goal easier. The problem with both credit card churning and crypto trading is that when the 'alpha' is shared, it's generally competed away -- so successful strategies aren't often shared.
For credit card churning, there are no tax headaches because reward points aren't taxed as income. There are still many viable ways to "spend money on the credit card yet have it return back to you at a lower cost than the rewards rate."
Most of the people that I see pulling in 5 figures from churning are doing a combination of that plus bank account bonus churning. I'm talking about the kind of deal where you put in 200k for a few months and get a 2k bonus - hence the question about how much cash is around. It's a little active but you'll get closer to ~10% APY chasing those bonuses. That is taxed as income, though. Still, it's pretty straight forward on taxes since everything comes in as a 1099.
I also believe there are arbitrage strategies in crypto markets that would meet the goal easier. On the spectrum, though, that's going to be the most tax headache approach.
Happy to share some alpha with you. DM me on Twitter!
