As a paid search arbitrager, I spend $XX,XXX/mo every month buying traffic. For the past few years, I've floated it via travel rewards cards. As my monthly spend increases and the amount of free time for all these earned travel credits diminishes, it would make a lot more sense to me personally and to my business to convert that spend to a cash rewards card. Doing a little up front research, it appears the Schwab 2% card is probably the best fit, but I'd love some feedback from other small business owners that squeeze out a little bit of extra margin via cash back cards. For reference, 100% of this spend is likely going to be categorized as "marketing/advertising", so a card that offers 5% back on gas purchases or other categories would not be as meaningful. Card would be paid-in-full every month. Thanks in advance.
5 Additional Answers
http://bit.ly/10KTSj It looks like the Schwab card is better than these offers on bankrate.com, but I've also had good experience with American Express (especially since you are paying off the balance each month). The plum card lists 1.5% early pay discount but the Platinum doesn't mention their exact cash back offer, although I think it is also 2% - so compare APR and annual fees. A quick Google search shows 5% cash back for American Express Platinum in UK!
This is a timely question. Many credit card companies have neglected small businesses for the last year, believing that the economic downturn would have a severe impact on them. Recently though with signs of an economic recovery, some issuers have been actively marketing to small businesses. Chase is one such company with their new Chase Ink cards, including the Ink Bold, Ink Plus, Ink, and Ink Cash. Don't be afraid to negotiate - I recommend negotiating the best deal possible for you and your business by playing AMEX and Chase off of one another.
Brian, here are a few pointers to help you...
1. It's a good idea to have a separate card for your business expenses if for no other reason than it makes tracking business expenses and reimbursements easier.
2. Don't focus too much on getting a "business" credit card. You usually have make a personal guarantee - even on a business card - unless you can get a corporate guarantee account in which case the issuer will want to conduct due diligence on your business by looking at financial records and so forth. Even id you do get approved, it will likely be for a smaller amount than if you pursue a personal card.
3. There are some good rules to follow with regards to managing the cash back. Two good ones: first don't sign up for a card where you have to prompt the issuer to send you the rebate (make sure they are mailed to you or deposited in your account automatically with no prompting); second, make sure you understand your spending habits which it sounds like you do so you maximize rebate amounts (I have not seen cards that offer accelerators for paid search spending - it's actually a good idea).
4. There are some specific cards that might be applicable to your situation, including the:
**Citi Cash Returns Card - up to 5% back from some of your potential suppliers such as Dell, Office Depot...
**AMEX Simply Cash Card - 5% cash back on office supplies and wireless plans, plus savings with FedEx, Hertz, and Hyatt.
**Discover Business Card - lots of people like the flexibility it offers.
Hope this helps.
I wouldn't underestimate the power of travel rewards. For my business, we use travel points to fund a good part of our sales team's travel. Our T&E expenses were going through the roof until I detoxed my sales guys off of their frequent flier programs (in other words made them fly Southwest, JetBlue and other low cost carriers instead of United) and started using miles for business travel. It does result in less flexbility and sales will grumble a bit, but you can save thousands per month by doing this. I have heard of larger companies negotiating directly with the airlines to create master frequent flier agreements to pool miles across all employees, but we're too small for that.
Also, the Starwood Preferred Guest card is hands down the best travel card. It gives you a lot of flexibility in terms of hotels and airlines.
credit limit is very important too. Chase is generally fairly generous so if you want to spend quite a bit a month, it may be a good option.
Not sure what sort of limits Schwab offers. Does anyone know?
Best Answer
+1
I think Schwab is going to be your best bet at 2% for cash back. I run a small business and we use Discover. We get all the basics like you were talking about...5% cash back on office supplies, 2% on gas, and 1% on all other purchases, but we only get 1% cash back. If you're only looking for cash back privileges than I would go with Schwab. I don't think you're going to find a better cash back rate than 2%.