Credit card holders have long been seduced by the lure of a free toaster, frequent flyer miles or cash back — and small businesses are no exception, with many using personal credit cards for regular business expenses. The pain of a credit spend is eased by the piling up of points, and let’s face it: who doesn’t love something for nothing? The problem is, ‘nothing’ in bankland is typically a higher annual fee, harsher interest rate and hidden charges.
So are rewards programs value for ‘nothing’?
The dual exchange rates of dollars-spent-to-points, and then points-to-rewards, make it near impossible for a small business owner to evaluate the actual benefit of a rewards card — let alone to compare the 100-plus different cards and programs on offer.
Would your bottom line be better off with no annual fee and a competitive interest rate? Should you switch rewards cards for a vastly better deal?
In a first for Australian financial services, an answer is at hand. At Mozo.com.au <http://Mozo.com.au> , we’ve run the numbers on the credit spend required for local and international flights, giftcards and cashback offers, and our newly launched Rewards Revealer provides an instant analysis of the rewards card market based on your personal situation.
Not only can you ascertain the rewards value of your small business credit spend, the results also reveal a wildly different return between flights, giftcards and cashback.
For a $50,000 annual spend, the best cashback card is the Westpac Altitude Platinum — which nets $603 after deducting annual fees. However, if you’re after domestic flights, you can net $851 in rewards with the Jetstar Platinum Mastercard.
The best rewards value for this annual spend comes from the Citi Emirates Platinum, which nets $1,021 after fees in international flights. It’s fantastic value — assuming you can make use of the flights.
On the downside, there are seriously underperforming rewards cards chewing up your annual spend; in some cases, the annual fee outweighs the value of points accrued on a small yearly expenditure. So how do you beat the system?
1. Even the best rewards cards only return 2% in value on your credit spend, while charging up to 20.99% in interest. So any outstanding debt will likely cost a lot more than the points provide.
2. The best programs can also incur the worst annual fees — so let Mozo crunch the numbers to come up with the best value for your credit spend.
3. All the international flights in the world aren’t much use if your business is burning through domestic airfares — so make sure the rewards fit your needs, with a specified search.
Get to the points at http://mozo.com.au/credit-cards/rewards.