NB: This is a guest article by Odysseas Papadimitriou, founder and chief executive officer of Card Hub.
One-third of all business travelers are “unmanaged”, meaning they do not have to operate under stated company travel guidelines or use company-approved travel providers.
This figure, according to a recent survey from the Global Business Travel Association, means that they, as well as certain managed travelers, are therefore likely to use their own credit cards to book travel and pay for things while on the road.
That means picking the right credit card is of the utmost importance because while a company may reimburse your travel expenses, the rewards earned along the way are yours to keep.
To help you make the right choice, weâ€™ve put together a list of the Dos and Donâ€™ts for picking the right credit card for business travel.
Do: Use the Island Approach
Thereâ€™s no rule stating that you can only have one credit card in your wallet. In fact, using more than one enables you to get far better terms, seeing as thereâ€™s no single perfect credit card that offers the best rewards, lowest interest rates and fees, etc.
By adhering to the Island Approach, which calls for you to isolate different types of transactions on different credit cards, you can focus on getting the best rewards for each of your biggest everyday expenses (ie. those that you pay for in full every month) and the lowest interest rates for purchases thatâ€™ll take a while to pay off.
Do: Consider both initial and ongoing rewards
When it comes to picking a credit card for business travel, rewards will obviously be your primary concern, and the Island Approach can also be applied solely to rewards maximization.
Much of this will come from finding the most rewarding card for each of your biggest expense categories (e.g. using the best gas credit card to fill up your tank), but it also necessitates balancing initial rewards bonuses with ongoing rewards.
Ever since the recession, credit card companies have made it a practice to offer initial rewards bonuses worth hundreds of dollars to new customers with excellent credit who open certain cards.
Taking advantage of a notable offer every once in a while and spending the requisite amount to trigger the bonus is therefore a good way to turn travel expenses into a significant amount of free money.
Credit cards with attractive initial bonuses donâ€™t necessarily have the best ongoing rewards, so a different card might have to serve as the backbone of your strategic rewards arsenal.
Do: Determine whether youâ€™re a brand-loyal traveler
Airline and hotel credit cards affiliated with specific companies often provide better rewards than those offering generic points and miles, but they only allow you to maximize value and redeem for tangible perks when you use that particular companyâ€™s services.
That means if you donâ€™t routinely use one particular airline or hotel chain, getting its credit card would mean forfeiting consistent perks and being vulnerable to rewards devaluation.
Therefore, if you fly at least 30,000 miles with the same airline or stay at least 20 nights at the same hotel chain each year, get its co-branded credit card.
If not, use a non-company-affiliated travel credit card, like the Capital One Venture Card, which offers what is tantamount to 2% cash back when you redeem miles for anything travel related.
The good thing about the Venture Card and certain other generic rewards cards is that you can retroactively apply your points/miles to purchases.
In other words, you donâ€™t have to pay for your travel using points/miles; you charge the purchase to your card and cash in your points/miles once it appears on your statement.
This enables you to use travel comparison sites like Priceline, Travelocity, and Kayak to find the best possible deals, rather than being forced to accept whatever prices and arrangements are available through the airline or hotel of your choice.
Donâ€™t: Count out general-consumer credit cards
If your boss has asked you to use a credit card linked to the business, you might want to do him or her a favor and suggest a general-consumer credit card instead.
All major credit card companies hold small business owners personally liable for use of business credit cards, according to a Card Hub business credit card study, which means thereâ€™s no inherent downside to using a general-consumer credit card.
To the contrary, bringing general-consumer cards into the mix provides a wider selection of options and insulates the company from arbitrary interest rate increases given that they benefit from CARD Act protection while business credit cards do not.
Donâ€™t: Apply en-masse
Itâ€™s important that you apply for a card you have a good chance of getting. That means if you have average credit, donâ€™t apply for an excellent credit credit card.
Whatâ€™s more, when you do apply, donâ€™t simply fill out applications for every card you might want, hoping to get approved for one of them.
This will only serve to give issuers the impression that youâ€™re desperate for credit as well as damage your credit standing temporarily.
Donâ€™t: Worry about redemption fees
It used to be the case that to redeem credit card rewards, you had to call the credit card company and pay a fee. Now, given the ubiquity of online account management, this is no longer the case.
You can simply go online to determine what exactly you can get with your points and miles as well as book and pay for travel. Oh yeah, and most cards no longer charge a fee for the ability to do so.
Ultimately, unmanaged business travel is an opportunity, an opportunity to rack up rewards and frequent flyer miles and therefore save on personal expenses.
NB:Â This is a guest article by Odysseas Papadimitriou, founder and chief executive officer ofÂ Card Hub.