Making Money With Your Credit Card


Last week, John Chow made a post about using your credit card to earn cash rewards. This is a topic that I’m VERY well-versed in, as my business spends anywhere between $200-400K/yr, and I’m always looking for the best bang for the buck.

That said, earning a 1% cash-back return is just criminal! John states that he charged $112,554 last year, which breaks down to $9379.50 a month. Right off the bat, I’d suggest that he switch over to American Express’s new Plum Card. If you pay your bill within 10 days of the end of the billing cycle, you get a 2% discount. The discount is applied to your next month’s bill automatically. (If you spend less than $5000 in a month, you only receive a 1% discount – But at least you don’t have to wait 12 months to get paid!)

The card is free for the first year, after which you’re charged an annual fee of $185. People might balk at the annual fee, but do the math – In John’s case, he would have walked away with $2251.08 instead of the $1125.54 he actually received. Subtract the $185 fee, and he still would have been $940.54 ahead of the game!

If you don’t spend quite so much, or if you need more than 10 days to pay your bill, you might be better off with the AMEX Business Gold Rewards card. This was my card of choice until the Plum came out. You earn 1 Membership Rewards point for each $1 spent, but they also reward you when you hit certain spending thresholds. When you spend $20K in a year, you’ll earn an additional 5000 points. If you spend $50K in a year, you’ll earn an additional 20,000 points!

So if you spend $60K for the year, you’ll earn 60,000 points right off the bat, plus the 5000 points for reaching $20K in spending, PLUS another 20,000 points for reaching $50K in spending. You’ll walk away with 85,000 Membership Rewards points! Your points can be redeemed for incredible rewards from the finest names in travel, shopping, dining, and entertainment. It’s a great program, and you can check out what you can redeem points for at the Membership Rewards website.

American Express

The other card I use quite frequently is the AMEX Starwood Rewards card. Hotels aren’t cheap anymore.. Every time I go to New York City for a conference, I’m spending at LEAST $250/night. But the Starwood card takes care of that now. I’m actually staying at the W in Midtown Manhattan in a few weeks, and its costing me 10,000 Starwood points. A bargain, if you ask me! You earn 1 Starpoint for every dollar spent. In addition, they give you 10,000 Starpoints just for signing up for the card. When you spend $15K in a year, you’ll earn an additional 15,000 points! So sign up, spend $15K, and you’ll have 40,000 Starpoints at your disposal!

If you spend $15K on any other credit card, you’ll generally get back about $150. But with the Starwood card, you’re getting 40,000 points, which is good for 4 nights at a 4-star hotel in the heart of NYC.. Book that yourself, and it’ll easily run you $1000 or more! They also allow you to transfer points on a 1:1 basis to the frequent flyer programs of over 30 major airlines.

American Express

Happy spending! 😀

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