The 1% cash-back that a lot of credit cards offer is easy to access, you just sign up; whereas the 10% in travel value is reserved for experts. Firstly, you must earn the right reward points, and secondly, you must learn which transfer partners release the most space at the lowest rate with the lowest taxes for the routes you fly the most.

Types of Cards

There are two main options for credit cards:

  1. Airline-branded cards (e.g. Amex Delta card)
  2. Bank-branded cards (e.g. Amex Platinum card)

Airline-branded cards make sense if you mostly fly one particular airline, and, if your main airline is not a transfer partner for the bank-branded card, or, the airline-branded card earns points at a higher rate.

For example, Amex business cards earn 1 point per dollar spent and those points can transfer to Delta at a 1:1 ratio. Amex also offers a Delta-branded card that directly earns Delta points. So, why would you bother with the Delta-branded card if the generic Amex card can transfer to Delta along with many other airline partners? Because the Amex Delta card earns 2 points for every dollar spent on Delta flights, not just 1 point like generic cards. This is essentially double the value, but only if you spend a lot on Delta flights.

In most other cases, a bank-branded card is better. They have more travel-related transfer partners, higher sign-up bonuses and higher earning rates. Like the Amex Delta card, they can also have their own subtle benefits.

For example, with a United-branded card, you can't transfer your United miles to Singapore Airlines, but Singapore doesn’t release Suites Class award space to airline partners. However, with a Chase-branded card, your Chase Ultimate Rewards transfer directly to Singapore Krisflyer Miles and can therefore be used to book Suites Class.

Costs

The more a card costs, (generally) the better the earning rates, bonuses and benefits. For businesses that spend a lot, the benefits of a high-fee card outweigh the fee savings of a low-fee card.

A card with a seemingly high annual fee of say $495 will provide almost that same amount in direct travel credits, a bonus that’s 2–3x higher than low-fee cards, and an earning rate that’s 2–3x higher than low-fee cards.

So, for the purpose of this business-focused analysis, we suggest ignoring differences in annual fees unless you’re comparing otherwise equal cards.

Liability

This is important:

  • With a personal card, you are liable for the debt
  • With a business card, you are again liable for the debt
  • With a corporate card, your company is liable for the debt

On this alone, it makes sense to only use corporate cards so your personal credit isn’t affected by the business. However, corporate cards earn points at lower rates, have no/low bonuses, and in some cases don’t allow transfers to travel partners.

This makes the decision not so clear cut.

For some people, having any personal liability is an absolute no-no, so their only option is to use a corporate card. But for smaller businesses already operating with credit cards (business or personal), you can potentially find a lot more value by sticking with that.

As for the differences between personal and business cards, a business card won’t help your personal credit rating at all. You get the worst of both worlds:

  1. Full personal liability
  2. No personal credit rating benefit

About the only benefit of business cards is they are treated separately from personal cards. That means with recent limits to credit card sign-ups to earn bonuses, you have double the limit when also considering business cards. Another feature of business cards is that you can create secondary cards for your employees to use that are all linked and accounted to your main business card.

Rewards

Airlines and banks offer many types of reward programs and points, but for the sake of maximizing value for your business, you should only consider a few:

  1. Amex Membership Rewards
  2. Chase Ultimate Rewards
  3. Citi ThanksYou Rewards
  4. The miles of an airline you fly a lot ONLY if you can earn those miles at a higher rate with an airline-branded credit card
  5. Starwood Starpoints *caveat below

The above bank points are worth more than airline points because they can be transferred to many partners. This makes a huge difference if you travel internationally or from different hubs. It also makes a difference if you only fly domestically, but not from a single airline’s hub.

(Don’t fall into the trap of signing up for an Amex card at your local bank only to find it doesn’t even earn Amex Membership Rewards, but rather the bank’s own reward points. To use these points, you must use their own travel portal that gives a low cash value to your points.)

Amex, Chase and Citi points are thought to be the best in the US because they have the most transfer partners and best transfer rates. There are some other good bank reward points outside the US; the key to comparing them is to look at their transfer rates (should be 1:1) and the number of useful partners.

Amex has the most high-value travel partners, followed by Chase and Citi. The key is to find a card with partners that you can actually use. After that it’s a matter of comparing bonuses, earning rates, and other benefits like travel insurance and airport lounge access.

What about Starwood? Although it’s just a hotel chain, like bank points, their Starpoints can be transferred to many useful travel partners. What worries us a little about putting all of your spending with Starwood is they were recently acquired by Marriott and the future of their rewards program is a little uncertain.

Uncertainty aside, their points are potentially worth even more than all of the bank’s points since they transfer to airlines with a 25% bonus (e.g. 1,000 Starpoints gives you 1,250 Singapore Krisflyer miles). They also have more transfer partners than all of the aforementioned banks.

Value

Now it’s time to put this information to practical use.

Step 1. Assess your liability appetite

  • For no personal liability, corporate cards only.
  • If you are okay with personal liability, but don’t want the card to appear on your personal credit history (unless you default), then business cards only.
  • If you are okay with personal liability and the card appearing on your credit history, then you’ll get the most value with personal cards.

Step 2. Airline-branded cards

  • Is there an airline that you fly or prefer the most?
  • If so, is there a bank that offers an airline-branded card that has benefits above and beyond all bank-branded cards?
  • If so, sign up. If not, forget airline-branded cards.

Step 3. Spending category bonuses

  • Do you spend a majority of your money on a particular category? For example, travel, fuel, dining, office supplies, etc?
  • If so, find all of the cards that give you an earning bonus for that category. Make sure it’s a permanent earning bonus, not just for the next X months.
  • If not, focus on cards that give the highest earning rate on general spending.

Recommendations

For corporate cards, it’s hard to go past the Amex cards, but they require $10m revenue/year and even if you meet that criterion, you must be careful in your selection of cards.

  • Firstly, choose a card that earns reward points
  • Secondly, makes sure it earns Membership Rewards, not Corporate Membership Rewards

Most of the time, an organization can choose whether they want to earn Corporate Membership Rewards (non-transferable to airlines, tied to company) or personal rewards (transferable to airlines, tied to a personal account). Corporate Membership Rewards cannot be transferred to travel partners, so their value is limited.

For business cards, look at Amex, Chase and Citi. But none of these earn more than 1 point per dollar, even on travel spend, at least without caps on earning. So only choose these cards if you really don’t want them appearing on your personal credit history, remembering you are still personally liable if you default on a business card. Out of these, we recommend Amex cards because they have the most transfer partners.

The exception for poor earning on business cards are the airline-branded cards such as the Amex Delta, Chase United and Citi AA cards, which all earn 2 points per dollar spent on that airline’s tickets. This is only useful if you spend a lot on cash airfares with a particualr airline.

For personal cards, the stakes are much higher. Forget earning 1 point per dollar, you can earn up to 3 points per dollar without any caps. You can also earn up to 100,000 bonus points just for signing up. The best cards in this respect are the Chase Sapphire Reserve Card, the Amex Premier Rewards Gold Card and the Citi ThankYou Premier Card.

Consulting

If this is too much to take in, remember as a Flightfox for Teams customer that has more than 5 trips per month, we’ll analyze your spending, compare all of your options, and make intelligent recommendations for you and your business. We’ll then book your trips to maximize your points and redeem those points for the maximum value.