During a standard year, Jared Neff, proprietor of Neff Yacht Sales located in Fort Lauderdale, Florida, embarks on work-related journeys several times monthly. He attends global boat exhibitions and frequently brings clients to view yachts positioned for sale worldwide.
However, as a result of COVID-driven international travel restrictions, Neff found himself largely confined last year. He completed only three round-trip domestic flights throughout the year and did not engage in any international travel. This year, he is gearing up to take to the air once more.
“Our trade mirrors real estate; the only distinction is that our merchandise travels globally,” he notes. “Whenever we secure a listing, we head directly to its location.”
As with any entrepreneur, Neff prioritizes mitigating his business expenses, and when discussing travel, he’s discovered that utilizing a solid travel rewards credit card is one effective strategy.
“Attempting to purchase international tickets at the last minute costs an arm and a leg,” Neff explains. “Having accumulated miles on a credit card simplifies the process considerably.”
His card of choice, the Delta Premium American Express, offers additional advantageous features: a complimentary annual companion ticket, a no-cost checked bag, and a streamlined pathway to achieving frequent flyer status by combining points accumulated through spending and miles flown. Furthermore, he automatically receives seat upgrades on numerous flights.
Although Neff appreciates his current credit card, he remains open to switching for a different one—particularly if it includes a significant sign-up bonus, for instance.
Neff is not alone in his eagerness to accumulate airline miles again this year. The Global Business Travel Association anticipates a resurgence in business travel, expecting a 38% increase in spending, surpassing $1 trillion.
“People have become accustomed to meetings via Zoom, yet nothing compares to the experience of face-to-face interactions and social networking,” states Howard Dvorkin, a certified public accountant based in New Jersey and chairman of Debt.com. “However, companies will continue to assess the necessity of travel.”
With businesses navigating persistent uncertainties stemming from COVID, along with supply chain issues and inflation, those owners who opt to travel will be intent on maximizing their travel budgets to the fullest extent.
As Neff has discovered, a pivotal approach to achieving that goal is maintaining a commendable rewards credit card—and leveraging all its available advantages. The ideal credit card for your business travel needs will hinge on various aspects, including the scale and maturity of your business, your expenditure levels, and your credit standing.
To assist you in selecting the best card, here are several tips to ensure you maximize its potential.
#1 Business or Personal?
Typically, larger enterprises benefit from utilizing business credit cards; however, if you are a startup or a sole proprietor, opting for a consumer card may be worth consideration. Regardless, securing a dedicated card for business expenditures is essential for easier separation from personal spending for accounting and taxation purposes.
A key initial query is whether a personal or business card will be more beneficial for covering travel and other costs. Keep in mind that whatever option you choose, as the business owner, you’re generally held personally accountable for the charges, especially if it’s a new venture.
Business credit cards can often offer more lucrative rewards compared to consumer cards. Nevertheless, they may lack some of the protective features provided by personal cards. For example, a business card can alter the interest rate on an existing balance, unlike consumer cards, and late fees may be considerably higher on business credit cards.
Still, for emerging companies with ambitious growth objectives, acquiring a business credit card could be a wise move.
“If you intend to establish credit under the business name, a business credit card might facilitate that,” suggests Rob Stephens, founder of CFO Perspective, a consultancy dedicated to offering financial guidance to small enterprises. “Mixing personal cards for both business and personal expenses is inadvisable, even if you believe you’re reaping greater rewards from your personal card.”
Business credit cards also simplify the process of providing cards to current or future employees, allowing for customized limits on expenses or spending categories.
#2 Analyze Your Spending.
If travel is anticipated to be a significant aspect of your business this year, you might want to consider a rewards card affiliated with your frequently used airlines or hotel chains. For instance, the Delta SkyMiles Reserve Business American Express Card provides triple miles for Delta purchases and additional miles on eligible transactions. Those extra miles can also assist in regaining frequent flyer status if it lapsed during the pandemic.
On the other hand, if you foresee substantial spending in various other categories, a cashback card, like the Chase Ink Business Cash card, might prove to be more advantageous, offering 5% cash back on office supplies and telecommunication services, alongside 2% back on fuel purchases. The rewards can be redeemed for cash or to offset travel costs.
“Throughout the pandemic, many consumers and business owners adjusted their cards to acquire non-travel rewards that were more beneficial for them,” remarks Gerri Detweiler, education director at Nav, which provides free credit research and tools to small business proprietors. “Many may have transitioned to cashback options rather than sticking with travel rewards, understanding they wouldn’t be traveling frequently. However, it’s an opportune moment to reevaluate whether your current card suits your business needs and if you’re effectively maximizing your rewards.”
#3 Assess Sign-Up Incentives.
Credit card issuers are vying vigorously for new cardholders, both individual consumers and business owners alike. The incentives available for business owners can oftentimes be more appealing since credit card companies recognize that as a cohort, they generally incur higher spending than individual consumers.
“Options are abundant,” states credit specialist John Ulzheimer. “If you’re unable to identify a card accommodating your business and travel preferences, you’re not searching thoroughly enough.”
Before rushing into accepting the first sign-up offer you encounter, it’s crucial to comprehend the associated terms and conditions. Typically, you need to meet a spending threshold within a designated time frame to earn the bonus miles or points being advertised.
“You must meticulously read the fine print to ensure you’re adhering to the guidelines necessary to reap the rewards it promises,” Dvorkin advises.
Some issuers may waive the annual fee for the initial year, but it is important to consider the costs for subsequent years. Typically, cards offering the most substantial rewards will also come with a higher fee. Nevertheless, a fee amounting to a few hundred dollars may be worthwhile for benefits such as free checked bags and seating upgrades on just a handful of flights.
“People often become particularly upset over annual fees,” Ulzheimer remarks. “Yet, they might not grasp the larger picture.”
#4 Recognize the Perks.
Beyond the miles that can accumulate to provide free travel, business travel credit cards come with advantageous features that can enhance travel affordability and comfort. Access to airport lounges and complimentary Wi-Fi can alleviate stress during airport waits while upgrading to business or first class can significantly enhance the flying experience.
Some cards also feature reimbursements for airline fees or foreign transaction fees, complimentary hotel stays, and funds applicable to Global Entry or TSA PreCheck. Cashback cards frequently include rotating categories that yield additional rewards.
A further tip: Opt into email notifications from your credit card issuer to stay informed about (and utilize) promotional programs, such as the complimentary DoorDash DashPass subscription from Chase or the $400 in statement credits toward Dell purchases for American Express Business Platinum cardholders. Multiple business card issuers often provide opt-in dining programs that grant rewards for dining at select restaurants.
If you manage several cards, Detweiler recommends employing apps like AwardWallet or MaxRewards to help ensure you are maximizing your benefits.
#5 Avoid Carrying a Balance.
Regardless of the rewards attached to a credit card, it generally does not make financial sense to use a rewards card if you cannot clear your balance every month.
“If you apply for a rewards card and start accruing a balance, you are essentially funding your personal rewards program,” Ulzheimer explains. “And if you accumulate enough interest, you could end up funding the reward programs of others as well.”
If you’re tapping into credit for capital for your business, it might be wiser to pursue a card that offers a no-interest introductory period rather than one with rewards. Additionally, it’s crucial to strategize on paying off the debt as swiftly as possible, as small business credit cards can influence your personal credit score.
#6 Reassess Your Choice.
While frequently switching cards can be undesirable, especially when enticed by attractive introductory offers, it’s wise to review your business credit card annually approximately to ensure it remains suitable for your evolving business needs. Over time, the card’s terms may alter and your business is likely to change, too.
“Your business requirements can evolve,” Detweiler notes. “So it’s advisable to periodically review your card and the available offers to identify potential opportunities for aligning rewards with your current needs or desires.”
The resurgence of business travel might be a much-anticipated development for road travelers like Neff; however, it can simultaneously introduce stress (and additional expenses) for entrepreneurs. Selecting the appropriate credit card can serve as a valuable resource to alleviate this stress and facilitate benefiting from those business trips.
