- If you own a business, you're missing out on valuable points, miles, or cash back if you're not charging your work expenses to a rewards credit card.
- Don Venderbush, a small business owner and salesperson in Cincinnati, says he hasn't paid for a hotel when traveling for pleasure for more than 20 years thanks to the points he's earned from charging expenses to his Hilton Honors American Express Surpass® Card.
- Venderbush also uses airline credit cards to purchase airfare, but the bulk of his expenses go on the Hilton Surpass card to maximize his hotel rewards.
- While this strategy works will for Venderbush, not everyone will want to put business expenses on a personal credit card. This could complicate things when it comes time to round up your business deductions for tax season.
- See Business Insider's list of the best business credit cards.
For small business owners, using a business credit card is a great way to keep expenses organized, earn valuable rewards, and avoid the risks of a debit card. But what does that look like when you work in sales?
To get a better idea of how this works in practice, I spoke with Don Venderbush, head of business development for an independent manufacturer in Cincinnati and owner of a manufacturers' representative organization, to learn more about what's in his wallet and how he uses credit cards for his business.
We're focused here on the rewards and perks that come with each card. These cards won't be worth it if you're paying interest or late fees. When using a credit card, it's important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.
Maximize rewards, without too much effort
"I currently have 4 credit cards and use them each depending on the circumstances," says Don. His credit cards include the Hilton Honors American Express Surpass® Card, the Citi® / AAdvantage® Platinum Select World Elite™ Mastercard®, a Delta SkyMiles® Gold Business American Express Card, and the PNC Bank Cash Rewards Business Visa.
"I don't spend a lot of time trying to figure out which card is best," says Don. "American Airlines tickets are charged to the Citi / AAdvantage Platinum card, Delta tickets are charged to the Delta Gold Business card, and some selected business expenses are charged to my PNC Bank Cash Rewards Business Visa," he says. Everything else goes on his Hilton Surpass card.
Use credit cards whenever possible
"My wife and I charge everything and rarely pay cash," says Don. "I charge about $25,000 per year on business expenses and about $30,000 per year on personal expenses."
That adds up to some major rewards over time. For example, the Hilton Honors Surpass card earns 12 points per dollar on Hilton purchases, 6 points per dollar at US restaurants, US supermarkets, and US gas stations, and 3 points per dollar everywhere else. Those bonus categories include pretty common household expenses, so it's not difficult to rack up a six-figure rewards balance in a single year.
Read more: 4 reasons why you should use a credit card instead of a debit card
Redeem points for significant value
Indeed, Don says that Hilton Honors points have helped him save a lot of money on personal travel. "I haven't paid for a hotel when traveling for pleasure with the family in over 20 years," he says. "At one time, I had about 1.2 million Hilton Honors points." He's not hoarding those points though - Don says he's now "down" to about 300,000 points.
The 900,000 Hilton Honors points Don's used over the past few years have undoubtedly helped him secure some great vacations. While Hilton no longer publishes an award chart, most of the chain's properties offer standard rooms for between 5,000 to 95,000 points per night. On top of that, members with Hilton Honors elite status get their fifth night free on award reservations of five nights or more. All of the Hilton credit cards from American Express come with Hilton Honors elite status, so having a Hilton credit card guarantees that you'll have access to this valuable perk.
Keep your strategy simple
Don says he would prefer to spend his time running his business - and enjoying vacations - rather than developing a complex credit card strategy. "Most card decisions are made without much analysis," he admits.
"For example, I used to stay at Marriott hotels, but then about 20 years I saw that Hilton had a nice incentive to sign up for the Hilton Surpass card. So I did that, and then stopped staying at Marriott. At the time I had just spent most of my Marriott points on a great vacation, so there really was no reason to stay with Marriott as my balance was almost zero."
There are upsides to leveraging multiple credit cards to maximize rewards, but this is a useful reminder that you don't necessarily have to become a credit card expert or spend a ton of time learning about credit cards to earn and enjoy significant rewards from your spending.
Think hard before mixing personal and business expenses
While some small business owners are intentional about separating business and personal expenses, that isn't a priority for Don. "I mix business and personal on all the cards, as I'm trying to maximize the points," he says. "Since I own my own company, I'm not limited to putting business expenses on only the business cards. The business is an LLC, so it's OK to mix/match expenses on the different cards."
However, Don cautions that this approach isn't right for all business owners. "As my accountant states, If I had an S corporation it would not be a good idea to place business expenses on the personal cards." Keep in mind many credit cards are available in business versions; for example, there's the Hilton Honors American Express Business Card.
And of course, mingling personal and business expenses on the same credit cards makes keeping track of expenses more difficult - especially when it comes time to file your tax return. So make sure to consult a tax or accounting expert before following Don's example.
See Business Insider's list of the best small business credit cards »
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