You may prefer to keep your business and personal lives separate in many respects. And, for accounting purposes, you definitely want to keep your business and personal purchases apart.
But when it comes to rewards credit cards, your business and personal purchases can work in tandem to form an effective rewards strategy.
Tip #1: Get business and personal credit cards that feed into the same rewards program
If you’re making large business purchases on one card and your personal purchases on another, you could be diluting your rewards efforts. After all, 50,000 rewards points in one pot could get you a free airline ticket to Europe, while 25,000 points in two separate pots may be next to useless.
To make sure all your rewards go into the same pot, get a card affiliated with a flexible rewards program — Chase Ultimate Rewards, for example, or American Express Membership Rewards. Both programs have personal and business cards attached to them.
Let’s say you get the Chase Ink Business Preferred card (for business) and the Chase Sapphire Preferred card (for personal use). Chase allows you to transfer points between two accounts if you are the primary accountholder on both, so you can pool all the points you earn. You can then redeem for travel, direct airline mile transfers (into partner frequent flier accounts), cash back and more.
This strategy also works if you’re collecting miles with a specific airline or points with a specific hotel chain. Many airline and hotel co-branded cards have business and personal versions. If you carry both, you can still keep your business and personal purchases separate for accounting purposes, but have all your rewards deposited into your frequent flier or hotel loyalty account.
If your travel loyalty program of choice doesn’t have a business card, consider getting the personal card and then getting a business card that uses that airline or hotel as a transfer partner. For example, say you’re collecting IHG points. IHG has only a personal version of its credit card. You might get the personal IHG card, which rewards bonus points on gas, groceries and IHG stays (and use it for gas, groceries and family vacations). And then you could get the Chase Ink Business Preferred, which, via the Ultimate Rewards program, allows you to transfer your rewards into your IHG account.
Tip #2: Increase your sign-up bonus potential
Many cards offer big sign-up bonuses after you meet a minimum spending requirement in the first few months of card ownership. Getting the business version of a card and the personal version opens up an exciting possibility — the ability to earn the sign-up bonus twice.
There are some caveats, though. Sign-up bonuses require you to spend a certain amount in the first few months. So, if you’re getting both versions of the card, make sure you can spend that amount on each card. Also, some credit card issuers have rules about how many credit cards you’re allowed to have with them — or even how many credit cards you’re allowed to have, period. If you exceed that number, you’ll be rejected for the card and lose out on the chance to earn the introductory bonus.
Tip # 3: Make sure you’re coordinating your bonus categories
Look at what you and your business spend the most money on and make sure those spending categories are reflected in your card choices.
If your home business spends a lot on telecommunications, shipping and digital advertising, find a business card that rewards you for those categories. If your family spends a lot on groceries, find a card that gives extra rewards at supermarkets.
And remember: You want all those rewards to, ideally, flow into the same rewards account. So if, for example, you’re trying to accumulate Chase Ultimate Rewards points, you might consider the Ink Business Preferred card, which earns bonus points in business friendly categories. You might then pair that with the Chase Freedom card, which earns bonus points at rotating quarterly categories geared more at families.
Tip #4: Find your annual fee sweet spot
When balancing your business card and personal card, watch how much you’re paying in annual fees. If, for example, you’re using the $450-a-year Business Platinum Card from American Express, you may not be able to swing the $195 Premier Rewards gold card for personal use. Instead, you may prefer a no-annual-fee personal card that also earns Membership Rewards, such as the EveryDay card, which gives bonus points on groceries (and an additional bonus if you make a certain number of transactions per month).
The bottom line
If you own a business, calibrating your business and personal rewards strategy can fast-track your points and miles accumulation. Failing to do so can dilute your efforts and leave you paying more in annual fees for less rewards efficiency.
