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How to Make Your Budgeted Business Expenses Cheaper

June 20, 2018
4 min read
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Putting as many business expenses as possible on a rewards credit card has the net effect of making your operating expenses cheaper if you put the rewards back into your business. Your travel expenses may shrink by 3% or more if you use the right credit card, while you could save 5% on office supplies and advertising when you choose a card that includes this type of spending in its bonus categories.

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One example is The Business Gold Rewards Card from American Express, which earns 3 points per dollar on one category from a list of five options — airfare purchased directly from airlines, US purchases for advertising in select media, US purchases at gas stations, US purchases for shipping and US computer hardware, software, and cloud computing made directly from select providers — up to $100,000 per year. Another is the Ink Business Cash Credit Card, which pays 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year (then 1%).

Unfortunately, you can't put everything on a credit card — including some of your biggest monthly expenses like rent, contractor payments and vehicle lease payments. You can, however, run these budgeted expenses through an online payment service like Plastiq, which allows you to pay for things you normally wouldn't be able to with a credit card. (Plastiq cuts a check or initiates a bank transfer to the recipient.)

Among the expenses Plastiq says you can pay for with its service are several that are likely part of your monthly business budget, including car payments, contractors, insurance, legal services, rent and utilities.

Limited Time Promotion

Paying these recurring expenses with Plastiq normally wouldn't produce any savings for you or your business, as Plastiq charges a 2.5% transaction fee on all credit card payments. That fee is more than you're likely to earn in rewards for using your card. It's why we typically recommend that businesses and consumers put these expenses on a credit card only if they need to boost spending to earn a sign-up bonus or to hit an annual bonus.

But the service is waiving its fee on transactions up to $250 if you use Masterpass to initiate a Plastiq payment. Fees will be waived for payments delivered through September 30, 2018. Although Masterpass supports non-Mastercard products, the Plastiq promotion is good only on Mastercard-branded cards used through Masterpass.

This is both good news and bad news, as there are fewer restrictions on Mastercard cards than there are for other processors, like Visa, which cannot be used on Plastiq to make mortgage payments. However, not many of the top business credit cards are branded as Mastercard. Two notable exceptions are:

  • The CitiBusiness / AAdvantage Platinum Select World Mastercard, which pays 1 AAdvantage mile per $1 spent on non-bonus category purchases, which is how Plastiq payments would be coded. AAdvantage miles are worth 1.4 cents apiece, according to TPG's latest valuations.
  • The Bank of America Business Advantage Travel Rewards World Mastercard credit card, which pays 1.5 points for every $1 spent on all purchases everywhere.

The information for the CitiBusiness AAdvantage Platinum card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

If you have one of these cards, putting these expenses through Plastiq — at least for now — is something of a no brainer, particularly for expenses less than $250. You can also stack payments of $250 to the same recipient and avoid the fees, as long as the person or business you're sending the money to is OK with receiving multiple partial payments over several days — for instance, mortgage processors are often not willing to accept partial payments.

Another Way to Save

After the Plastiq promotion ends (or if you don't have a Mastercard-branded card), you may still be able to save money by putting your payments through the online service, especially if cash flow is an issue. Talk to your vendors about early-pay discounts. You may be able to shave a couple percentage points off your costs — and not have to worry whether the money is in your business bank account immediately to pay that bill.

Featured image by Getty Images

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Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
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Rewards

1 - 3X points
3XEarn 3 Points per $1 spent at Restaurants and Supermarkets
3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
1XEarn 1 Point per $1 spent on all other purchases

Intro offer

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For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

Annual Fee

$95

Recommended Credit

670-850
Excellent, Good
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.

Pros

  • Earns 3x points on restaurants, supermarkets, gas stations, air travel and hotels.
  • $100 annual hotel savings benefit (on single hotel stay bookings of $500 or more, excluding taxes and fees, booked through thankyou.com)
  • Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
  • World Elite Mastercard benefits, extended warranty, damage and theft protection.

Cons

  • $95 annual fee
  • Lacks travel protections that other travel rewards cards come with
  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases
Best starter travel card
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

3XEarn 3 Points per $1 spent at Restaurants and Supermarkets
3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
1XEarn 1 Point per $1 spent on all other purchases
  • Intro Offer
    For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

    Earn 80,000 ThankYou® points
    60,000 points
  • Annual Fee

    $95
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent, Good

Why We Chose It

The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.

Pros

  • Earns 3x points on restaurants, supermarkets, gas stations, air travel and hotels.
  • $100 annual hotel savings benefit (on single hotel stay bookings of $500 or more, excluding taxes and fees, booked through thankyou.com)
  • Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
  • World Elite Mastercard benefits, extended warranty, damage and theft protection.

Cons

  • $95 annual fee
  • Lacks travel protections that other travel rewards cards come with
  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases