In today’s digital blog, 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.
Hey guys, hope all is well, so I’m going to get right to it. Today I want to talk about how to leverage credit cards. And I think that they have a bad rep. A lot of people think you can rack up this credit card debt, you end up paying interest forever, and you can never pull yourself out of debt.
In reality, as a business owner, you can leverage credit cards to pay for items that you’re already paying for–like your monthly fees for your services, and different things related to your business to cover those expenses–and be able to rack up points so you can travel, use those points for eating in restaurants and different things.
So let’s go ahead and dive in. I’m going to do this presentation for you show you my card, my system and what I use to rack up points and travel the world for free. Let’s do it!
All right, guys, so let’s talk about the misconceptions of credit cards first: One is high interest. Now yes: a lot of credit cards have high interest, and some of them can be up to 24% APR. However, using the method of only spending what you have, and paying that off immediately, every month, you never really have to worry about that interest.
Yes, that’s true. However, in most cases, a lot of these credit cards have great incentives—like rewards, you get flights, tons of different things, it really depends on your preference. And we’ll go through that a little bit later as well.
If you have school loans, you probably weary 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 strip 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 good thing as good debt, so keep that in mind.
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, right? So, if you have a credit card for 10 years, and you open up another credit card, that’s going to shorten that lifespan.
However, if you have five cards and you’re opening one every few years, and you stagger that out properly, you don’t have to worry about it affecting your credit much.
That’s not true. A lot of times, if you have a credit card, and you don’t necessarily use it, get it down to zero and then just leave it open. It’s not going to hurt you in any way.
And as long as you keep up with your credit, you’ll be fine and good to go. So, keep that in mind as we move through this.
Now, I want you to think about a business credit card. So you don’t want to use a personal credit card for your business expenses. You want to have a card strictly for your business, and the main reason being is you can centralize all your spending.
For us, we have a lot of services and different things that we offer. We have hardware, software that we pay for every month, it makes it so much easier when we can just 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 Fort Lauderdale, I had an amazing boss. His name is Chris, and he was a proponent of using the card, and using that for a lot of these business expenses, racking up the points, and then he spent that on furnishing the office.
So, we have flat screens, we had new furniture, it was amazing. And he used his points to pay for all of that, because he was using the credit card to cover the cost and then paying that card off immediately every month and racking up those points and massive amount.
Also, you’re able to monitor employee card use. We have one employee with the 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. So, it makes it really easy to just organize your expenses without having to think about it.
Then you also 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.
So boom, you get 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. So, within that three months, the card's already paid for itself.
So here’s how I use my credit card. This is actually a look at mine—I have the Amex Gold. If you look here, these are some of the options that you can use your card to cover, and then here’s my points balance as of yesterday.
I did book a flight for my dad to come down from New York for Thanksgiving, so, I’m super stoked about that. We booked up about three or four flights a year using this account, and we don’t have to pay for any. So we’ve flown to California to 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.
So I had the Amex Gold, and then I had the Platinum for my personal. I actually have those combined, so I’m able to maximize my points even more. So, 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. So some of the bonuses with my card are, I get 3x points. And 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 US purchases for advertising in select media, like Facebook ads, Google AdWords, gas stations, shipping, computer hardware, software, cloud computing, all of that is racked up, and you get 3x points. So if you spend $1, you get 3 points per dollar, which is 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, you can use that for check bags in-flight, refreshments, and food. As you can see, I still have a pretty big balance here at 165.
For the rest of the year, we’ll probably use that on our flights—more so around Thanksgiving and Christmas. And then you also get Global Entry TSA precheck, that’s also set in there. And then you also get a $15 Uber credit.
So, you get a ton of different bonuses with this card alone.
Again, the Uber Credit and the Global Entry, are the Platinum. However, the 3x points are on the business, Gold card, which is crucial to anyone trying to build up their points and organize their spending. So, here’s a look at my process to rack up points.
The first thing you want to do is calculate your monthly spending, kind of look at what are you spending money on. You’re taking clients out, are using it for transportation, merchandise, Business Services, kind of organize that. Here’s an example for a few weeks ago, some of our expenses.
If you use your credit card for all that, you’re able to organize everything into one spot, right? You can log into Amex, and you’ll be able to see all of your expenses in your account. Also, remember—and I’m going to backtrack to: Remember to pay off the balance, the complete balance, monthly.
The worst thing that 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 then pay that off every month, so you can get it back to zero and continue that cycle.
You want to integrate with accounting software–whether using QuickBooks, FreshBooks, Wave Accounting, you can combine your card or you can 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 in and adjust some of the categories. But otherwise, all of your spending would drop in here and you don’t even have to think about it, it’s all automatic.
And then the last piece is to review your spending and adjust accordingly. So 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 debit account, if you have a new checking account in your 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 just be spending and spending racked up credit card and then you’re not able to pay for it. That’s when the interest and everything can eat you up and spit you out. So 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 which is an amazing card, awesome benefits. Also, the Business Platinum Card from American Express and the Business Gold Rewards Card from American Express are awesome.
I have the Gold card for my business and then Platinum for the personal. And again, you can merge those accounts too and just get the points racking up.
And then last is the Southwest Rapid Rewards premier business credit card.
Again, a lot of these cards are affordable, they might be $99-$200 per year, which is absolutely worth it. If you use it right, you can definitely leverage this and do a great job.
Thank you, guys, for checking out my content. As always hit the Like button, Comment that you loved it, and lastly, hit that Subscribe button and I will see you guys in the next video.
