Hey, Digital Family! My name is John D. Saunders and in today’s Digital Block I want to talk about how you can use your credit card to pay for items on your business to rack up points and travel for free. Let’s do this!
Hope all is well. I’m going to get right to it. Today I want to talk about how to leverage credit cards. I think they have a bad rap. A lot of people think you can rack up this credit card debt, end up paying interest forever, and can never pull yourself out of debt.
In reality, as a business owner, you can leverage credit cards to pay for items you’re already paying for, like your monthly fees for services and difference things related to your business to cover those expenses and be able to rack up points so you can travel and use those points for eating, restaurants, and other things.
Let’s go ahead and dive in. I’m going to do a presentation for you, show you my card, my system, and what I do to rack up points and travel the world for free.
Let’s talk about the misconceptions of credit cards first. One is high interest. Yes, a lot of credit cards have high interest. Some over them can be up to 24% APR, however, using the method of only spending what you have and paying that off immediately every month means you never really have to worry about that interest.
Next up, a lot of credit cards do not have bonuses. Yes, that’s true. However, in most cases a lot of these credit cards have great incentives like rewards, flights, and tons of other things. It really depends on your preference and we’ll go through that a little later as well.
Another one is forever in debt. If you have school loans, you probably are wary of using a credit card. You think you’re forever going to be in debt. You’ll never be able to pay it off. But if you follow a strict method of only spending what you have and paying that off immediately, you’ll never have to think about it. Also, there is such a thing as good debt. Keep that in mind.
Lastly, burden on credit. This isn’t true. This is only true if you open a ton of cards. One factor in your credit is the lifetime longevity of a credit card. If you have a credit card for ten years and open another, that’s going to shorten that lifespan.
However, if you have five cards and are opening on every few years and stager that out properly you won’t have to worry about it effecting your credit much.
Next one is cancelling your credit card will help your credit. That’s not true. A lot of times if you have a credit card and don’t necessarily use it, get it down to zero and leave it open. It’s not going to hurt you in any way. As long as you keep up with your credit, you’ll be fine and good to go. Keep that in mind as we move through this.
Why should you use a credit card for your business expenses? I want you to think about a business credit card. You don’t want to use a personal credit card for your business expenses. You want to have a card strictly for your business.
The main reason being you can centralize all your spending. For us, we have a lot of services and different things we offer. We have hardware, software that we pay for every month.
It makes it so much easier when we can use our credit card to centralize all that spending because now all of that is in one place. Also, you can redeem massive points. I learned this from my mentor and boss. I was at a marketing agency in Ft. Lauderdale. I have an amazing boss.
His name is Chris, and he was a proponent of using the card for a lot of business expenses, racking up points, and spending them on furnishing the office. We have flat screens, new furniture. It was amazing.
He used his points to pay for all of that because he was using the credit card to cover the cost and paying it off immediately every month to rack up those points a massive amount.
Also, you’re able to monitor employee card use. We have one employee with a card as well and he’s able to use that and we can see all the expenses that he’s tracking within one central account. It makes it really easy to organize your expenses without having to think about it.
Then, you have to think about welcome bonuses. With my card, I have the AmEx Gold Business card, you get 50,000 points just for spending $5,000 in the first three months. Boom! 50,000 points.
That can allocate to about $500 or $600 in cash. The card is free for the first year and then $195, I think, per year. Within that three months the card has already paid for itself.
Here is how I use my credit card. This is actually a look at mine. If you look here, here are some of the options that you can use your card to cover. Here is my points balance as of yesterday. I did book a flight for my dad to come down for Thanksgiving, so I’m super stoked about that.
We book about three or four flights a year using this account and we don’t have to pay for any. We’ve flown to California, New York, and abroad as well just using points. It’s an amazing feeling when you can just login here, book a trip, and not have to pay anything for it.
I have the AmEx Gold and then the Platinum for my personal. I actually have those combined so I’m able to maximize my points even more. Both my personal and business spending all go into one point allocation. That’s a little advanced tactic, but again, just to reiterate, this is how I rack up points and travel for free.
Some of the bonuses with my card car I get 3x points. This is huge as a business owner. There are a lot of cards that offer this as well like the Chase Ink and other options. Any U.S. purchases for advertising and select media like Facebook ads, Google AdWords, gas stations, shipping, computer hardware, software, cloud computing, all of that is wrapped up and you get 3x points.
If you spend $1, you get three points. That’s huge, especially as a business owner. You also get a $200 airline credit. That is actually for the Platinum card, but you can always move from the Gold to the Platinum and use that for checked bags, in-flight refreshments, and food.
As you can see, I still have a pretty big balance here, $165 for the rest of the year, and we’ll probably use that on our flights more so around Thanksgiving and Christmas.
You also get Global Entry and TSA Pre-Check. That’s also set in there, but also a $15 Uber credit. You get a ton of different bonuses with this card alone. Again, the Uber credit and the Global Entry are for Platinum, however, the 3x points are on the Business Gold card. That’s crucial for anyone trying to build up their points and organize their spending.
Here is a look at my process to rack up points. First, you want to calculate your monthly spending. Look at what you’re spending money on. Are you taking clients out? Using it for transportation? Merchandise? Business services?
Organize that! Here is an example for a few weeks ago of some of our expenses. Then use your credit card to pay everything. If you use your credit card for all that, you’re able to organize everything into one spot.
You can login to AmEx and see all of your expenses in your account. Also, and I’m going to backtrack to one, remember to pay off the complete balance monthly.
The worst thing you can do is spend money that you don’t have. Only use your credit card for things you’re already going to pay for and pay that off every month, so you can get it back to zero and continue that cycle.
Number three, integrate with an accounting software. Whether QuickBooks, FreshBooks, Wave Accounting, you can combine your card or merge your card with that account.
So anytime you make an expense or swipe that card, it’ll automatically push to your accounting software. This is huge because it puts everything on autopilot.
Again, you will have to go and adjust some of the categories, but otherwise all of your spending will drop in here and you don’t have to think about it. It’s all automatic.
Then review your spending and adjust accordingly. Make sure you’re always reviewing your accounting. I usually do mine at the end of the month. Only charge what you can afford.
Meaning if you have it in your debt account or business checking account to cover the cost of what you’re spending on the card, make sure you’re always under that.
The worst thing you can do is be spending and spending, rack up credit card debt, and not be able to pay for it. That’s when the interest and everything can eat you up and spit you out. Make sure you’re only charging what you can afford.
Lastly, here are some of my favorite business credit card options. One is the Chase Ink Business Preferred, an amazing card, awesome benefits. Also, the Business Platinum Card from American Express and the Business Gold Card from American Express are also.
I have the Gold for my business and the Platinum for personal. Again, you can merge those accounts and just get the points racking up. Last is the Southwest Rapid Rewards Premier Business credit card. Again, a lot of these cards are affordable. They might be $99 to $200 per year, which is absolutely worth it if you use it right to leverage this and do a great job.
Thank you, thank you, thank you guys for checking out our content. As always, hit the like button, comment that you loved it, and hit that subscribe button. I will see you in the next video. Peace!