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Update: Some offers mentioned below are no longer available. View the current offers here – Starwood Preferred Guest Business Credit Card from American Express, The Business Gold Rewards Card from American Express OPEN
Every week, I get a ton of reader e-mail from people asking for advice on how to maximize their points earning, whether it’s for personal use, business use or both. In this new Points Intervention series, I help individuals and small-business owners get their awards earning on track.
Intervention: Carissa Reiniger Episode 4
This week I’ve been working with Carissa Reiniger, a small-business owner who hasn’t been using points and miles to her advantage. Yesterday I explained how to choose the right transferable points program for her, whether it be American Express Membership Rewards, Chase Ultimate Rewards or Starwood Preferred Guest. Each of these programs offer credit cards with decent sign-up bonuses and spending categories that earn multiple points per dollar. Today I’ll give her a rundown on my top three business credit card choices, one from each of those programs.
Never Too Small for a Business Card
Carissa asks, “For a small business, how big do you have to be before you transfer to a business card?”
As I tell Carissa in the video, I started The Points Guy five years ago with a $10 domain name and a dream. The first thing I did was get a business credit card, because my accountant advised me to keep my personal and business expenses separate. The credit card companies want your business especially when you’re just starting out, because when you hit it big, you’ll have that brand loyalty.
Business Card Benefits
One of the best advantages of having a business credit card is the fact that when you open a card using your Tax ID number (EIN), you’ll have a separate credit report for your business. This means that your personal credit report won’t be impacted by your existing business credit lines or inquiries when you apply for new cards. For example, if you have a large bill and you’re waiting for a payment to come in so you can pay it off, that fluctuation will not affect the debt-to-credit ratio of your personal profile.
On the other hand, it’s critical to pay off the balance of your business credit card in full every month — otherwise you’ll get hit with interest and fees. If Carissa can manage to do this, she’ll rack up points with those sign-up bonuses and category spending multipliers that we discussed yesterday.
Know that there are many different benefits that come with different business cards. For instance, American Express OPEN cards such as The Business Platinum Card from American Express OPEN, The Business Rewards Gold and Plum come with a savings benefit that offers either a 5% discount or two additional Membership Rewards points for each eligible dollar spent at participating OPEN Savings merchants including Hyatt, Hertz, FedEx and more.
Personal Card Benefits
Personal credit cards in the US have more protections than business cards do. For one, the APR tends to be lower on personal cards — about 13% compared to an average of 19% for business cards. Additionally, due to the relative volatility of business accounts, the interest rate can also fluctuate more with business cards.
Top Three Business Cards
Carissa seems eager to dive in, but I encourage her to start with just one credit card as she builds her US credit profile. Here are my top three choices:
Chase Ink Plus is running an offer for Small Business Month until May 25th where you can earn 60,000 bonus points after spending $5,000 within the first 3 months. The $95 annual fee is not waived the first year. This card earns 5x on the first $50,000 per year spent at office supply stores, cellular phone, landline, internet and cable TV services as well as 2x on the first $50,000 spent at gas stations and hotel accommodations when purchased directly with the hotel.
Business Gold Rewards Card from American Express OPEN is a solid card that earns points which can be transferred to a number of different partners and is currently offering 25,000 points after $5,000 spent within the first 3 months. I especially like British Airways, a transfer partner of Membership Rewards, which offers flights from New York to Toronto for only 4,500 points! American Express even has occasional transfer bonuses that cardholders should look out for. Additionally, it’s an American Express OPEN card so it provides the savings benefit mentioned above, and you will be able to choose which category you would like to earn 3x in whether it be airfare, advertising, gas stations, shipping or US computer hardware, software and cloud computing purchases. 2 points per dollar will be earned on the remaining 4 categories and 1 point per dollar earned on other purchases.
Starwood Preferred Guest Business American Express would also be a great choice for Carissa because she flies American and stays in hotels quite often, and she can use SPG points for both. This card comes with a 25,000 point sign up bonus in which you will earn 10,000 points after first purchase and an additional 15,000 points after spending $5,000 within the first 6 months. Plus, the option of redeeming for SPG Moments experiences or Cash & Points make this card very attractive.
Carissa should start with one of these and use it for a few months, then apply for another card three to six months later. It’ll be crucial for her to pay the balances every month, because the most important factors in building up her credit score will be her payment history and her debt-to-credit ratio.
I have 25 credit cards, but I pay them off every month, so my credit score is the highest it’s ever been because I have all this credit that I rarely use.
Tomorrow I’ll help Carissa maximize her hotel stays — so stay tuned!
If you or your small business need a Points Intervention, email email@example.com.
With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards