Lately I’ve been listening to a lot of Bengaluru-based rapper Hanumankind. His big break was the music video for his song Big Dawgs (and I would choose it as my MLB walkout song), which was shot in a maut kā kuām̥, the show still held at fairs across India that those of us in the US may know better as the well of death. A rather risky stunt seemed like the perfect vibe for this post.

In the world of MS and churning, what is considered risky is quite different compared to who you ask. Someone that is carefully focused on leanFIRE is likely going to be more risk averse compared to some of the younger folks coming over from the gambling and cook group worlds. 

As usual, my perspective is going to be that both extremes have a point and most of us will find ourselves somewhere in the middle. You can do quite well for yourself without pushing any limits, but you can also do really well for yourself if you go for it, regardless of whether any card issuer lets you open a card on the other side. 

Let’s talk about some of the risk involved in MS and how you can assess your own risk tolerance.

The human element of risk

If you’re doing it right, the human element of MSing and churning risk is similar to matched betting. Sure, you’re likely losing a hair of house edge, but there’s not any huge pitfall to wander into. While there is certainly some risk if you overextend yourself and end up with funds locked up in something hard to liquidate, it generally isn’t the end of the world. Things like prepaid debits can always be used for normal expenses, after all. 

I think the biggest aspect of human risk is an innocent mistake like fat fingering a payment amount or account number. Returned payments, overdrawn accounts and the like are far from ideal. Even something as simple as making sure you’ve added a card-linked offer before completing a large purchase can cover your ass. It’s certainly worth a couple extra seconds when you’re working with amounts that feel small because you move it daily but aren’t truly small. 

I’d add that you’re also responsible for understanding how MSing affects things like mortgage underwriting, because if your MS bankroll is also your down payment, it’s not going to look amazing that it’s always being transferred around. That said, I’d love to be a fly on the wall as a naive churner explains to a loan officer that they are the world’s first travel agent to focus only on a certain West Coast to Asia route. 

On calculating risk

It’s ultimately up to your individual decisions whether a financial institution wants to do business with you or not. I’m not going to wax ad nauseam on specifics, because it is highly YMMV. There are people out there that cycle even the most sensitive issuers over and over again with zero repercussions. Then there are people that are shutdown for seemingly innocuous missteps. 

It’s not just about getting shutdown by the Chases and Amexs of the world, though. Getting axed by your hub bank or a common fintech like Paypal or Venmo can be a royal pain. 

Besides getting shutdown, there’s the obvious risk of things like buyers groups not scanning your item, or a shipment of the MS precious metal du jour being stolen by organized theft rings. While you may have recourse, losing a chunk of profit from something out of your control can easily wipe out your gains. The vast majority of those transactions go through with zero issue, but it’s worth factoring that miniscule chance into your risk tolerance equation.

I think MEAB already hit the nail on the head in a much more scholarly way for weighing how much a shutdown is worth risking for you. There’s a wealth of data points out there for pretty much every bank you could be interested in hitting, so this is a real choose your own adventure. Set your goals, see how realistic those are within the boundaries (real or not) of the platforms in your toolbelt, and calculate if you’re ok with adverse action. 

The darker side of risk

There’s also a darker side that isn’t talked about as often. There are plenty of clickbait blog articles out concerning why people shouldn’t start churning – the obvious ones like don’t start if you are in debt or are bad with money. But there isn’t as much written for when you’ve moved well past beginner. But I do think there are some people that have the necessary knowledge to MS that shouldn’t be doing it. 

There’s something addictive about seeing your points balances go up by six figures daily instead of every three months. There are plenty of ways to generate float as a MSer, and if you aren’t keeping track of that amount of money that is very much the bank’s and not yours, you’re going to have a bad time. When money feels ‘unreal’ and just a tool for acquiring more points in a way that MS can sometimes make it feel, it can lead to some serious mistakes.

Finally, I encourage you to do your due diligence and understand the motivations and business models of the platforms and people you choose to work with. 

Hopefully this wasn’t too doom and gloom – I just think we should all be clear eyed about the potential risks involved in becoming a whale. You can’t win ‘em all, so learn from your mistakes and use them to make even more the next go around.