Maximizing Small Business Rewards

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Update: This offer for The Business Gold Rewards Card from American Express OPEN is expired, but there’s currently an opportunity to earn 50,000 Membership Rewards® points after you spend $5,000 in purchases on the Card within your first 3 months of Card Membership. Learn more about the special offer here.

I wrote a post last week about the best current sign-up bonuses for small business credit cards, which focused on the best currently available bonuses for business credit card rewards.

Reader Justin asked a great follow-up question, which I think provides an interesting example:

Timely post for me Lucky. I’ve been put in charge of revamping our credit card rewards plan. We do about $20m annual with $500k cc spend ($100k travel related.) Based in the NE between PHL and EWR and not married to any airline or hotel brand.

We have an AMEX biz account with 20 corp cards issued and a BofA cash rewards plan with 30 employee issued cards. We’d definitely want to get the most out of redeemable travel rewards (the cash back has really been 1% or less and we have those non-transferable MR points. Ugh.)

We’re doing our own research but always like to hear from the people who are in it everyday. Ink seems to make sense to replace the BofA setup and it sounds like the framework is there to make the AMEX account work harder for us in terms of redemptions for employee travel expenses. Your thoughts are definitely appreciated.

Now, I’m not exactly sure what Justin’s company is hoping to redeem points for outside of “employee travel expenses,” but it sounds like there are definitely some opportunities to improve this setup.

A 1% Rebate Isn’t Rewarding

Getting less than 1% back on purchases is just not necessary nowadays, and having non-transferable Membership Rewards points doesn’t make sense when there’s a better option. Justin noted that his business spends about $500k a year on credit cards, so for the purposes of example, let’s assume the following:

  • ~$100k on travel related expenses (including flights, hotels, rental cars, etc.)
  • ~$100k on business overhead (utilities, phone service, shipping, office supplies, computer equipment, etc.)
  • ~$300k on items that likely don’t fall into “bonus” categories in terms of spending (of course, it’s even better if they are spending in bonused categories, but let’s err on the safe side for our example)

With their current business credit cards rewards programs, the best possible return is 1% back on business purchases. By changing their business credit cards they could potentially be receiving the equivalent of at least 2.5% back in rewards, which is obviously a huge difference.

The Right Card Makes A Difference

The first business credit card I would recommend is the Ink Plus® Business Credit Card.

This is truly one of my favorite business credit cards with rewards, and I tend to think the value of the card speaks for itself.

The card offers 5x points on the first $50,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services; 2x points on the first $50,000 spent annually at gas stations and on hotels.

For a company like Justin’s, it’s easy to see how quickly those points would add up!

In addition to being a more rewarding small business credit card, the Ink Plus® Business Credit Card also offers several tools for managing small business expenses. Additional employees can be given cards for no fee, and the card administrator can set individual spending limits on each card.

The Ink Plus® Business Credit Card also provides a service called Jot, which is an integrated app for iPhone and Android whereby card holders can snap pictures of receipts, which are then synced and uploaded to the central Ink account. According to Chase:

“Small business owners are constantly on the go and do not want to be reconciling reports with a shoebox full of receipts,” said Richard Quigley, president of Ink from Chase. “More than half of all active Jot users use the app from their smartphone while on the go. Receipt capture now allows Jot users to better and more easily organize their back office by throwing out that shoebox and taking those categorized receipts with them wherever they go. With less time spent reconciling receipts, small business owners and their employees can devote more time to growing their businesses.”

This is either an awesome or irritating feature, depending on who you ask, but I can see this being really useful for companies with lots of small transactions they need to keep track of.jot for Ink Plus

In addition to receipt tracking, business owners can also create expense reports through the Chase web portal. This can be done for the entire company, or for individual employee cards:Ink Plus Expense Report

Not only that, but you can also create quarterly and yearly breakdowns for each employee, or with all business expenses.

Larger businesses likely have accounting software to generate reports like this, but for small firms I’d think it would be helpful to be able to get a quick snapshot.

Ink Plus Quarterly Management Report

Given all these benefits, I think the Ink Plus® Business Credit Card is a no-brainer.

When it comes time to redeem the points, Ultimate Rewards can be transferred at a 1:1 ratio to the following transfer partners:

Air France KLM Flying BlueIHG Rewards ClubSingapore KrisFlyerUnited MileagePlus
British Airways Executive ClubKorean Air SkyPassSouthwest Airlines Rapid RewardsVirgin Atlantic Flying Club
Hyatt Gold PassportMarriott RewardsThe Ritz-Carlton Rewards

Some of these programs offer better values than others, in my opinion, but the versatility of Ultimate Rewards is going to be a huge benefit overall.

It’s also worth noting that you’re looking for more of a rebate towards travel, you can always redeem your points towards travel through the Ultimate Rewards mall. It’s typically not as great a value as you’d get by transferring points to travel partners, but even when redeeming through the Ultimate Rewards mall you’re still getting a 20% discount on travel, which is better than Justin’s company is doing at present.

Two Cards Can Be Better Than One

As much as I love the Ink Plus® Business Credit Card, I think there is often room for a supplementary small business credit card, and in this example I think the Business Gold Rewards Card from American Express OPEN would be a good choice.

The Business Gold Rewards Card from American Express OPEN offers 3X points on one category of your choice from the following: Airfare purchased directly from airlines; U.S. purchases for advertising in select media; U.S. purchases at gas stations; U.S. purchases for shipping; U.S. computer hardware, software, and cloud computing purchases made directly from select providers. 2X points on the 4 remaining categories. 1X points on other purchases.

AppleIBMNeweggSalesforce.com
CDWIntuitOracleSymantec
DellLenovoRack SpaceTiger Direct
HPMicrosoftSage Software

There’s a $0 introductory annual fee for your first year, then $175. Additional Cards for Employees have an introductory annual fee of $0 for the first year; then $50 for the first employee Business Gold Rewards Card and no fee for the rest.

American Express also offers a receipt-tracking option called ReceiptMatch, which offers both a mobile app and the ability to forward receipts via email.

American Express Receipt Match

You can also create quarterly reports by employee and by category through the American Express interface, which is again a helpful tool.

Business Gold Rewards Year End Summary

Since this is an American Express small business credit card it’s part of the OPEN Savings Program, which gives you up to 10% discounts at select merchants.

One of my favorite partners of the program is Hyatt, as they offer  a 5% discount for Hyatt stays of up to $10,000 per year when paying with your American Express OPEN Card:

OPEN Savings® from American Express OPEN Hyatt Hotels & Resorts® boosts the value you get from your Business Card from American Express OPEN as part of the OPEN Savings® benefit. As a built-in Business Card feature, you automatically receive a 5% discount credited to your American Express statement OR 2 additional Membership Rewards® points for each eligible dollar spent at participating Hyatt Hotels & Resorts in the U.S. up to $10,000 per Card Account in a calendar year. This benefit can be combined with other promotions offered by Hyatt.

This is equivalent to saving 5% on Hyatt stays, and the statement credit means you’re effectively getting cash back on eligible stays. That can add up really quickly for a small business, so is a great perk.

The Business Gold Rewards Card from American Express OPEN accrues Membership Rewards points, which are incredibly versatile. Membership Rewards points can be transferred to the following airline programs:

AeroMexico Club PremierBritish Airways Executive ClubFrontier EarlyReturnsVirgin America EleVAte
Air Canada AeroplanCathay Pacific Asia MilesHawaiian Airlines HawaiianMilesVirgin Atlantic Flying Club
AirFrance/KLM Flying BlueDelta SkyMilesIberia Plus
Alitalia MilleMigliaEl Al MatmidJetBlue TrueBlue
ANA Mileage ClubEtihad GuestSingapore Airlines KrisFlyer

There are tons of amazing ways to use Membership Rewards points for travel, so there’s huge potential for value here as well.

American Express also allows small business owners to redeem points towards a statement credit. It’s not a tremendous value in comparison to the other transfer options, but in certain cases it might make sense for some.

Maximize Bonus Categories

While the Ink Plus® Business Credit Card is a credit card, the Business Gold Rewards Card from American Express OPEN is a charge card, so there isn’t a pre-set spending limit. Having both options can come in handy for small businesses, and by leveraging your spending you can really maximize the points earned.

Beyond that, by strategically dividing your small business spending between the two cards, you can really accelerate your points earning. As an example, let’s look at the $200k of business expenses we were discussing earlier, and assume that spend is divided between airfare, hotels, rental cars, fuel, phone service, internet, office supplies, and computer equipment.

With the current setup, Justin’s company is earning ~200,000 points on that $200,000 of spend – just 1% back, in what sounds like fairly unrewarding programs.

By splitting that same $200,000 of spend between the Ink Plus® Business Credit Card and the Business Gold Rewards Card from American Express OPEN, his small business could be earning 150% more points on their purchases!

INK-and-BRG

Because of the bonus categories on the Ink Plus® Business Credit Card and the Business Gold Rewards Card from American Express OPEN, you can spend the same amount of money in a given category, but receive two, three, or even five times as many points for money you’d be spending anyways! This means that 200,000 points could easily be well over 500,000 – depending on the exact spending breakdown.

That’s a dramatic difference, and doesn’t even account for Ultimate Rewards and Membership Rewards points being more valuable than the points he’s currently earning.

Bottom Line

Making minor changes to your credit card strategy can really accelerate your rewards earning.

While this business credit card comparison is geared towards small businesses, I think the same ideas can be applied to personal cards, as there are great ways to bolster your mileage balances through strategic use of the right cards.

What do you think? Which cards would you recommend?

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Comments

  1. Expensify is a far better tool than Chase’s Jot app for expense reports. I’m actually surprised that Chase continues with its own proprietary tool instead of either (1) just buying Expensify or (2) working out so kind of co-brand deal.

  2. Curious, what kind of phone plan and what kind of cable service you have that you pay so much for?

  3. @ SC @ Nick — Have multiple lines on the phone plan, and am grandfathered into a really generous package that I don’t want to lose. Don’t even get me started on Comcast, that whole thing has been ridiculous.

  4. Lucky,
    Your posts are usually helpful, but I do not think this one is the better ones.

    Call Chase and see how many cards they allow on an Ink
    I was told 6 – This company has 20!
    Second, I found that for downloads to quickbooks each card downloaded separately, which may be good or bad from your point
    Lastly Amex told me they can have 5 extra cards on the business Gold, not unlimited like 30

    Let us all get away from the good paying links and see what is better for a company with 20-30 employees and you will find that the blog links may not be best

    I think you may be surprised by the AAdvantage Corporate card
    That gives AA miles and good benefits. That is open to any company with 4 MM in sales and is very useful to mine

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