If you find yourself making regular, large expenditures on your business, you need to listen up. Points and miles, when leveraged properly, are assets you can use to book travel, whether it’s for your own business or your family’s leisure.
Think of credit card rewards as the travel-version of a flexible spending account (FSA).
You amass a large balance of points, which are tax-free (because they’re treated like rebates as opposed to income) and you can then get outsized value from these points.
The difference is that flexible spending accounts can be used for healthcare expenses, while credit card points are used for travel expenses.
So, with your end goal of booking travel in mind, how can you take the most advantage of the lucrative credit card rewards system to save hundreds of thousands of dollars in flights and hotels in the long term?
How can you book the best first class tickets in a post-pandemic world with maximum social distancing using your hard-earned points? First, you have to optimally accrue and manage your points!
Check out our top tips for business owners to maximize their rewards below.
- Don’t Earn Just 1 Type of Points
- Pay Special Attention to Bonus Categories
- Make Business Accounting Easy with Amex and Chase
- Use Your Business Credit Card’s Annual Fee As a Tax Deduction
- Add Employee Cards to Earn Rewards Even Quicker
- Consider Credit Cards With 0% Introductory and Balance Transfer APR
- Final Thoughts
Don’t Earn Just 1 Type of Points
Diversifying your points is the key to booking lavish, exotic vacations for free!
The biggest misconception perpetuated by mainstream blogs and media companies is to stick with 1 type of points, amass a gigantic pot of points, and redeem them accordingly.
Unfortunately, this is not the best approach, especially if you see yourself making lots of business expenses monthly, generally over $25,000 per month.
Think of your points as a type of asset with tangible value. If, for example, you focused on Chase points but you find that the only way to book your vacation is using Amex points, then you’ve put yourself in a disadvantaged situation.
You’d rather be consistently earning a nice pile of all types of points instead of a gigantic pile of 1 type of points.
For example, it’s generally preferable to be accruing 50,000 points per month across American Express, Citi, and Chase than to accrue 150,000 Citi points per month.
Think twice before using your points for bookings through portals like Amex Travel, especially if you’re considering booking first class flights!
Pay Special Attention to Bonus Categories
Bonus categories are one of the easiest and effortless ways to earn more points for the exact same spending habits. Here’s how it works.
Let’s say you have an American Express Business Platinum card and you’re putting all of your business’s dining expenditures on that card.
Did you know that you can earn 3 to 5 times as many points by putting your spending on a different card such as the American Express Business Gold card?
Different cards earn more points for different categories.
If you book a lot of work travel for your employees, you can leverage cards such as The Business Platinum Card® from American Express for paid hotels and airfare booked through AmexTravel and the Ink Business Preferred card for other travel expenses.
Earning at least twice as many points as you currently are should be a top goal. Once you’ve amassed the points, you’ll want to reward you and your significant other with a luxe vacation. Check out our pick of the 5 best vacation spots for couples!
Make Business Accounting Easy with Amex and Chase
When you sign up for a business credit card, you’ll typically also have access to expense and accounting management tools as a value-added benefit.
For example, American Express provides a separate app cardholders who need to manage receipts, view account information, and manage employee cards.
At the same time, JPMorgan Chase is quickly catching up, with the newly inked partnership with Sensibill.
It’s extremely easy to set up the Amex Business app; all you need to do is download the app from the app store to get started.
Use Your Business Credit Card’s Annual Fee As a Tax Deduction
As a general rule, reasonable business expenses can be deducted from your business income.
Credit card annual fees, interest payments, and late fees usually count as valid business expenses. So, that annual fee of $95? It’s less now that you can deduct it.
This is not legal or tax advice. Consult your tax and legal professional.
Looking for some places to travel to last-minute? Check out our 5 best places you can visit that are open to U.S. citizens, and you can also learn how to use points to book luxury flights and hotels in this guide.
Add Employee Cards to Earn Rewards Even Quicker
It’s no secret that as your company grows, you can’t be the sole person making transactions, purchasing inventory, booking flights, etc. So, if you’re interested in earning rewards even faster, you can leverage your employees to receive employee cards.
This is the equivalent of having an authorized user, except for business credit cards.
Another neat trick is you can add an employee card that isn’t the same “tier” of card.
For example, you might know that an Employee Amex Business Platinum card is $300 per year. But, did you know that you can add an employee card for your Amex Business Platinum account but choose a different card tier to avoid annual fees?
For example, if you are an Amex Business Platinum cardholder and you add an additional Amex Business Gold card, you’ll pay $45 per card. Alternatively, you won’t pay any annual fees for the extra cardholder if you add an additional Amex Business Green card.
Granted, the employee card won’t receive all the travel perks, but it’s important to be aware that you can add different “tiers” of employee cards; you don’t need to add the exact same type of card.
Leveraging employee cards is crucial to scaling your rewards further, and doing so means you’ll have plenty of points to take advantage of the best first class deals you can book in a post-pandemic world.
Consider Credit Cards With 0% Introductory and Balance Transfer APR
When you’re running a business, there’s nothing better than getting free money, at least temporarily!
Business credit cards often offer introductory promotions that aren’t necessarily related to rewards but are more focused on generous lending terms.
For example, if you’re a business, and you need access to credit and won’t be able to pay back the balance in full for a few months, then you should consider getting a credit card with favorable APR terms.
This can come in the form of an introductory APR on purchases of 0% or an introductory APR on balance transfers of 0%.
With this, you can carry a balance for a specified period of time (refer to the terms in the credit card application) and not worry about having to pay back your bills immediately.
Also, if you have existing business credit card purchases that are coming due, the balance transfer benefit will be incredibly useful to shift the burden to 0% terms, effectively “resetting” the interest clock and delaying interest from accruing.
You’ll find the business credit cards offer unique perks that aren’t replicated by consumer credit cards.
Also, business owners often spend many times more than consumers, which is why it’s so much more important as a business owner to maximize your credit card rewards as much as possible.
Whether it’s earning as many points as possible, diversifying your points portfolio, or just tipping the system in your favor, it’s always going to be in your best interest to invest some time into travel hacking.
Once you invest the time, you’ll reap the rewards when you’re booking $10,000 plane tickets and $50,000 vacations for yourself and your family!