Advertiser & Editorial Disclosure
As a business owner, you have routine business expenses that must be paid on a monthly and quarterly basis. You can choose to use cash, checks, debit cards, credit cards, or other payment types to pay for said expenses. However, if you’re going to spend the money anyway on the required expenses, you might want to consider paying for them with a credit card, pay off the balance before the grace period, and collect the free points, rebates, cash back, and airline miles that credit cards offer. And in fact, if you plan properly, you can earn several free flights using your credit card rewards.
For a couple of years now, I’ve been somewhat of a Dave Ramsey fan. Although I agree with him on many things, there’s one thing that I absolutely do not agree with, and it’s his take on credit usage—more specifically, credit cards. He says: “You can’t build wealth with credit card rewards and airline miles. You can’t beat the credit card companies at their own game.”
While it’s true that credit cards don’t build “wealth,” what’s not true is that you can’t beat credit card companies at their own game. In fact, you can use credit cards, collect the cash back, points, rebates, and airline miles, and pay off your balances in full before the grace period to thus not pay a dime in interest. Don’t worry, doing so isn’t going to “bankrupt” the credit card companies, nor any of the issuing credit card member banks, because, as I covered in my Interchange Series, credit card companies and issuing card member banks are compensated through the interchange dues/assessments system when cards are run at point of sale.
Using Your Business Expenses to Get Free Flights
Let’s say a business owner uses air travel frequently for various personal or business-related transportation, and wants to find a business credit card that could help rack up 60,000 airline miles. Here are some strategies to get to 60,000 miles using four popular business travel rewards cards from U.S. Bank, American Express, and Capital One.
U.S. Bank FlexPerks Business Edge Travel Rewards Card
(Editors Note: Information provided was accurate as of the date of publication. Check with the issuer for the most up to date information and availability.) With the U.S. Bank FlexPerks® Business Edge™ Travel Rewards Card, you will earn one to three FlexPoints, depending on your category of spending. You’ll earn three FlexPoints for donating to qualifying charities, two FlexPoints on spending in the cellphone, gas, office supply, or airline categories, and one FlexPoint for spending everywhere else. Racking up 20,000 FlexPoints is good for one round-trip airline ticket ($400 value) and after $3,500 in purchases within the first 120 days of account opening, you will get 20,000 bonus FlexPoints. So to get to the first 60,000 in miles with this card, you could do the following:
• Run through $12,000 per year in spending of your cellphone, gas, and office supply expenses (this creates 24,000 FlexPoints).
• Collect the 20,000 bonus FlexPoints from the $12,000 in spending.
• Donate $6,000 per year to a qualifying charity (18,000 FlexPoints).
This would give you 62,000 miles, which would be worth at least two round-trip ticket flights. The annual fee is $55 per year, along with $10 per employee for each employee card. These costs are waived however, if you spend at least $24,000 in purchases in a calendar year. APRs are set based on creditworthiness and can go up to about 18.24%, but you can avoid paying interest if you pay off the card’s balance in full before the end of the grace period.
Capital One’s Business Travel Rewards Cards
Capital One offers two Business Travel Rewards Cards, you can choose from , or .
Capital One Spark Miles for Business
This card allows you to earn , along with .
So to get to the first 60,000 miles with , you really just need to run $5,000 worth of your business expenses through this card (10,000 miles) which would also activate the free 50,000 bonus miles (which are equal to $500 in travel). There’s an annual fee of . There is no cost for employee cards. The purchase APR is , but you can avoid paying interest if you pay off the card’s balance in full before the end of the grace period.
This card allows you to earn . And .
So to get to the first 60,000 miles with , you need to run about $28,000 worth of your business expenses through this card (42,000 miles) which would also activate the free 20,000 bonus miles. There’s a annual fee with this card, along with no cost for employee cards. Purchase APRs are set based on credit and range from , but you can avoid paying interest if you pay off the card’s balance in full before the end of the grace period.
More answers to pressing questions:
Business Credit Cards for Bad Credit
Can I Build Business Credit Fast?
What Happens When You Default on a Loan?
This article was originally written on September 1, 2016 and updated on January 29, 2019.
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