Which Credit Card is Best for Large Business Expenditures?

by on July 13, 2014 · 10 comments

in American Express, Capital One, Chase, Citi, Credit Cards, Starwood, Sunday Reader Questions, Video Blog Post

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TPG reader Mark sent me a question on Facebook:

I’m a business owner and charge between $100,000-$200,000 per month. I’ve been using the Citi AAdvantage & Executive Mastercard, but they don’t have high enough limits. Any suggestions?

As a business owner, it’s awesome to be able to put all of your business expenses on a points earning credit card and then reap the benefits. Back in my corporate America days, I was putting up to $50,000 a month in expenses on my corporate card that was paid directly by the company, and I got all the points–pretty sweet!

Make sure you are using the right credit card for all your business expenses. Image courtesy of Shutterstock

Make sure you are using the right credit card for all your business expenses. (Image courtesy of Shutterstock)

TPG reader Mark is spending $100,000-$200,000 a month on his Citi AAdvantage and Citi Executive Mastercard, and is wondering what other cards to consider, since the limits on those cards aren’t high enough to accommodate all his spending.

First things first:  if you want AAdvantage miles, you’re using the wrong cards. It’s fine to hit the $40,000 in spend to get the 10,000 Elite Qualifying Miles on the Executive AAdvantage Card, but beyond that, you’ll earn 25% more miles using the Starwood Preferred Guest American Express card (either the personal or business version). Starwood points transfer 1:1 to AAdvantage, and for every 20,000 points you transfer, you get a 5, 000 mile bonus.

Consider this as well: at that rate of spend, you really should be diversifying. You’d be better off with points that can transfer to several airlines and hotel partners instead of just AA miles. That way if AA doesn’t have the flights that you want, you’ll have other options. It’s much nicer to have 31 other transfer options and the ability to redeem for hotels too, so don’t put all your miles in one basket; diversify!

Using a Starwood Amex will net you a better return and more redemption flexibility.

Another good reason to diversify is the ongoing AA/US Airways merger. American has already made some negative changes this year and more could be coming. Having other options could make such changes less damaging to your frequent flyer prospects.

You might also consider a charge card that will give you flexible spending. Although there are a lot of business charge cards out there, I think the best one is the Chase Ink Bold Card. Right now Chase offers a 50,000 point sign-up bonus when you spend $5,000 in three months, and the $95 annual fee is waived for the first year. Beyond that, they have some great earning categories like 2X on hotels and 5X at office supply stores. Granted, Ultimate Rewards can’t be transferred directly to American Airlines, but you can use them on 11 different partners (British Airways, Korean Air, Southwest, United,Virgin Atlantic, Singapore, Hyatt, Marriott, Ritz-Carlton IHG and Amtrak). Another option I like is the Capital One Spark Card if you’re looking for cash back rewards.

In conclusion, Mark, diversify your credit card spending to maximize rewards, and consider a business charge card to avoid running up against spending limits.

If you have additional questions, please message me on Facebook, tweet me @ThePointsGuy, or send me an email at [email protected]

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Who there

    Why don’t u just make a payment through the website or over the phone then u can keep spending? Your limit doesn’t matter.

  • Graydon

    Diversify! I don’t spend quite that much per month for my business but what I do spend is split between many cards as to not over utilize all of my credit lines with the various banks (I can agree most banks don’t want to see exposure for a single $200K credit line). Inks are great (both my Bold and Plus see lots of use) as well as Amex business platinum (my only MR earning card) and Club Carlson for business. As a Delta flyer most of the time I try to hit my maximum spend of $60K for the MQM on my business Reserve then put it away for the rest of the year (Mark could do the same on one of his AA cards just to bank some AA miles). Sadly I let my business SPG card close in order to get increased bonus on personal version and I now regret that as it looks like I can never reap the signup bonus for that card again – but still do business spend on my personal card to stock those valuable points as well.

  • SeaBee3

    Especially with American Express, it can be a great way to bring on a financial review.

  • Texas miles

    I do that often on my business cards including Amex and havnt had a issue.

  • Bill Rubin

    If it is a personal card, that is a bad idea because it can still damage/increase your credit utilization by charging to the limit of your card, thereby hurting your credit score. If it is a business card (credit or charge), then this is a great idea since business cards don’t count in any way towards utilization.

  • Ten60

    Are there any complications in transferring let’s say ultimate rewards to different names, say as different employees in your business as a reward for work well done if the credit card is in the llc name?

  • Bill Rubin

    My husband and I both own our own separate businesses. He charges more than I do per month, and he uses the Chase Ink Plus (for exactly the reasons outlined above), the SPG Business Amex, and the Platinum Amex. I use the Chase Ink Plus/Bold, the SPG Business Amex, and the Amex Premier Gold Business. I charge a ton more hotels (often SPG), airfare, and dining than he does, so the Chase Ink and SPG hotel bonuses and Amex Premier Gold bonuses give me lots of category bonus points. We both use Chase Sapphire Preferred for all of our dining, as well–unless we’re eating at an Starwood hotel restaurant, in which case we use our SPG Amex Business.

    We both also expand our options with the Barclay Miles & More World Elite MC to get Lufthansa miles and availability for Lufthansa premium awards outside the normal Star Alliance window of 15 days before departure. We only use these cards for non-bonus category spend, but between the 2 of us we have been able to get LH First a number of times on our leisure travel.

    I also have the Alaska Business card and personal card–originally just to get the 40k bonuses for Alaska to access Emirates more easily and for better priced awards than through Amex Membership Rewards. I’ll drop the personal card and stick with the business card since business card spend is never held against utilization towards determining credit scores. I now use this Alaska business card for personal spend, along with the SPG Personal Amex card. BofA has often waived the annual fee for me to keep the card.

  • Darren

    On two of my business cards (BofA and one other that I don’t recall which, maybe Citi), this would not work. The payment goes to the central billing account number and does not increase access for any of the card accounts, so even if my balance is 0, the individual cards accounts can be maxed out; very frustrating.

  • Christian

    What about the 1.5x earning United Club card and the 1.25x earning BA card?

  • josh

    i s~$50k/yr on google adwords/ups shipping. the rest would be on 1X spend and dining/travel. would it make sense to pair up a chase sapphire with the amex premier gold business? 1X purchases and dining/travel on CSP and adwords/ups on the amex premier gold?

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