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Old Aug 20, 14, 3:34 pm   #1
 
Join Date: Jun 2011
Programs: Delta PM, Hertz FS, SPG Plt, HH Gold
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Best Card(s) for Non-Bonus Spend Categories

Hello,

I searched the forum, but didn't quite find a thread addressing the best overall cards for non-bonus spend categories. I spend about 50-70k per month for my small business (most of that is shipping expenses which doesn't appear to receive any bonuses). Right now, we put all of the spend on our Chase cards (Sapphire and Ink) but I'm not so sure that is the best option any longer.

I guess the first question I am wondering is whether we would be better off with a cash back card versus points. We do use the points that we earn on our cards for business travel (mostly international economy class to Asia), but I was doing some rough calculations and I think if we do cash back we will come out ahead.

Assumptions:
We travel primarily on *A, we travel mostly to Asia and occasionally Europe. Assume only booking saver award space since travel dates are pretty flexible. Assume that similarly, we only book airfare under $1200 per ticket.

Spend:
$720,000 total annual spend -- 90% is non-bonus spend (assumption)
$648,000 non-bonus spend (90% of $720,000)

With Arrival card:
$720,000 x 2.2% = $15,840 = 13 round trips, plus MQM and miles earned

With Chase card:
$72,000 x 2 = 144,000 points
$648,000 x 1 = 648,000 points
792,000 points = 10-12 round trips

Of course, having points and using them towards aspirational awards changes this equation dramatically. So I guess my question boils down to, should I maintain all spend on the Chase cards or should I eliminate one of the Chase cards and maintain a cash back card for the non-bonus spend?


Thanks!
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Old Aug 20, 14, 6:16 pm   #2
 
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You probably want to get the AMEX Business Gold card. Along with other nice category bonuses, it offers 2x for shipping and since it's an OPEN card, an additional 5% off at FedEx for the first $20k spent per year. MR points aren't as great as Chase UR points, but they're close.
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Old Aug 21, 14, 7:38 pm   #3
 
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Quote:
Originally Posted by micned View Post
You probably want to get the AMEX Business Gold card. Along with other nice category bonuses, it offers 2x for shipping and since it's an OPEN card, an additional 5% off at FedEx for the first $20k spent per year. MR points aren't as great as Chase UR points, but they're close.
We actually have that card for the business and did not realize it had 2x for shipping. I knew it had the 5% off Fedex (unfortunately, we use UPS). That changes the equation quite a bit. Thanks for the insight!

Do you think with the 2x for shipping, it only makes sense to go for points then?
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Old Aug 22, 14, 4:04 am   #4
 
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Quote:
Originally Posted by eyestrain View Post
We actually have that card for the business and did not realize it had 2x for shipping. I knew it had the 5% off Fedex (unfortunately, we use UPS). That changes the equation quite a bit. Thanks for the insight!

Do you think with the 2x for shipping, it only makes sense to go for points then?
First of all props to you for already doing the math. It definitely is much easier to weigh each option. There really is no clear cut answer, I must say, because it really depends on your individual needs. I would say only $100,000 of your spending should go to AMEX (the small business card only offers 2x spending up to 100k per year)

The arrival card definitely looks a lot better if you just want long haul economy class. However, you could still get some benefit out of having points (ticket costs are quite variable) Its great to have points when tickets are north of 1.5k in coach. For example, I just ended up buying points, because it was going to cost me 3k to get to HKG one-way. I spent 1.5k on points and flew first class CX.

Now that United has devalued their frequent flyer program to such an extent, there is no longer one "clear" option with Chase. You mentioned before you want "aspirational" awards. My options that I recommend are: (1) Korean Air one way first class for 80k looks nice, but you would only be able to book that award for the cardholder or a member of the cardholder's household. (2) I don't have any experience booking ANA, but I know they also have a sweet redemption chart, but you do have to fuel charges of a few hundred dollars.

Hope that helps!

Last edited by DL172; Aug 22, 14 at 4:06 am. Reason: mistake
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Old Aug 22, 14, 6:10 am   #5
 
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Quote:
Originally Posted by eyestrain View Post

Do you think with the 2x for shipping, it only makes sense to go for points then?
Mr points can be redeemed for $0.01 each at the very least, so 2x MR is greater than or equal to 2% cash back. If the shipping benefit of the gold card is capped though, then I agree with DL172 on the mix between the gold and Arrival if you want to spend all your rewards on travel. If you just want real money, get the Fidelity Investment Rewards for 2% unlimited cash back and no annual fee instead of the Arrival.
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Old Aug 22, 14, 6:22 pm   #6
 
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Quote:
Originally Posted by DL172 View Post
First of all props to you for already doing the math. It definitely is much easier to weigh each option. There really is no clear cut answer, I must say, because it really depends on your individual needs. I would say only $100,000 of your spending should go to AMEX (the small business card only offers 2x spending up to 100k per year)

The arrival card definitely looks a lot better if you just want long haul economy class. However, you could still get some benefit out of having points (ticket costs are quite variable) Its great to have points when tickets are north of 1.5k in coach. For example, I just ended up buying points, because it was going to cost me 3k to get to HKG one-way. I spent 1.5k on points and flew first class CX.

Now that United has devalued their frequent flyer program to such an extent, there is no longer one "clear" option with Chase. You mentioned before you want "aspirational" awards. My options that I recommend are: (1) Korean Air one way first class for 80k looks nice, but you would only be able to book that award for the cardholder or a member of the cardholder's household. (2) I don't have any experience booking ANA, but I know they also have a sweet redemption chart, but you do have to fuel charges of a few hundred dollars.

Hope that helps!
Yes, definitely helped. I double checked and you are correct about the Amex card being capped at 100k per bonus category (good catch). So right now, it sounds like use Amex for at least 100k in shipping, maybe switch back to Chase and/or a CB card afterwards.

I agree about keeping some points around for emergencies and what not. I was hoping for a clear solution, but it appears that as with everything, there are shades of gray. I imagine the best solution would be to eliminate one of the Chase cards and do some type of hybrid system where I only charge bonus categories on the points cards and everything else on a CB card. And if we start pining for more aspirational type awards, start using the points cards more.
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Old Aug 22, 14, 11:04 pm   #7
 
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Amex Gold Biz = $100k on shipping
Amex Everyday Preferred = 1.5x all spend (assuming 30 transactions a month)
Chase United Personal/Business = $25k spend gets 10k bonus = 1.4x
Amex Starwood = 1.25x from the 25% bonus when transferring to miles
Chase British Air = $30k spend gets companion pass

Citi Hilton Reserve = $10k spend gets free night
Chase Fairmont = $12k spend gets free night

The first 5 is what I would do since it has highest return, flexibility on points and meets your travel pattern of *A and occasional Europe.

Amex MR can transfer to Aeroplan which books onto fantastic EVA Air business class (77w) to most of Asia through in TPE with NO fuel surcharges. If you want to splurge you can book onto Singapore Air. Aeroplan can also book to Europe with minimal fuel surcharges on LOT on their dreamliner business class.

With just the first two options only on the Amex cards, that's 1.13 mil MR points a year. That's about 7-8 business round trips or 14-16 economy to Asia.

Of course with this much spend, diversification with multiple programs and cash arrival is the best.
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Old Aug 23, 14, 2:37 am   #8
 
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I say go with a 2% cash back card. At practically $13,000, you can do whatever the hell you want with your extra cash, and then use signup bonuses to score the points you would need.
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Old Aug 25, 14, 3:46 pm   #9
 
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Quote:
Originally Posted by frudd38 View Post
Amex Gold Biz = $100k on shipping
Amex Everyday Preferred = 1.5x all spend (assuming 30 transactions a month)
Chase United Personal/Business = $25k spend gets 10k bonus = 1.4x
Amex Starwood = 1.25x from the 25% bonus when transferring to miles
Chase British Air = $30k spend gets companion pass

Citi Hilton Reserve = $10k spend gets free night
Chase Fairmont = $12k spend gets free night

The first 5 is what I would do since it has highest return, flexibility on points and meets your travel pattern of *A and occasional Europe.

Amex MR can transfer to Aeroplan which books onto fantastic EVA Air business class (77w) to most of Asia through in TPE with NO fuel surcharges. If you want to splurge you can book onto Singapore Air. Aeroplan can also book to Europe with minimal fuel surcharges on LOT on their dreamliner business class.

With just the first two options only on the Amex cards, that's 1.13 mil MR points a year. That's about 7-8 business round trips or 14-16 economy to Asia.

Of course with this much spend, diversification with multiple programs and cash arrival is the best.
Thanks for the well thought out post. I only have 2 out of the 7 cards (Amex Gold and Amex SPG) you listed. I was thinking about getting the Amex Everyday card due to the bonus, but figured that 2% CB was better than 1.5x points. I also figured on getting the Hilton card if only because I am no longer spending enough nights to qualify for Hilton Gold any longer.

Before doing any of that I figured I would come to the experts: Flyertalk! And glad I did. I will definitely do the Amex Gold--still debating on the Amex Everyday.

Quote:
Originally Posted by RamboAroundTheWorld View Post
I say go with a 2% cash back card. At practically $13,000, you can do whatever the hell you want with your extra cash, and then use signup bonuses to score the points you would need.
Thanks for the advise. I am leaning towards charging all bonus categories on certain cards (travel and dining on Sapphire, 100k shipping Amex Gold) and then doing the rest either on Amex Everyday or CB.
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Old Yesterday, 1:10 am   #10
 
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Quote:
Originally Posted by eyestrain View Post
I am leaning towards charging all bonus categories on certain cards (travel and dining on Sapphire, 100k shipping Amex Gold) and then doing the rest either on Amex Everyday or CB.
You can also consider the Capital One Spark Business. Has these benefits

- Unlimited 2% cash back, unlike Arrival which is restricted to travel
- Business card so should not show up on credit reports
- Capital One is know to report to D&B if you are looking to develop file with them
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Old Yesterday, 8:49 am   #11
 
Join Date: May 2012
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I will also throw in two. Fido 2% AMEX and 1.5%/2% Visa credit cards. Unlimited cash back at 1.5% and 2% in pure cash. SPG AMEX very valuable in terms of Hotels and Airline partners.
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Old Yesterday, 8:53 am   #12
mia
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Quote:
Originally Posted by RamboAroundTheWorld View Post
I say go with a 2% cash back card.
In a business, a cashback card may have tax implications. If you spend $720,000 and are rebated $14,400 the gross profit of the business increases by that amount. This doesn't necessarily make the money taxable, that depends on what you do with it, but you cannot ignore it in the same way as miles or points. I would discuss this aspect with your accountant.
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