Intro

Video Introduction

I’m going to be going over which credit cards I personally use to run all of my businesses, as well as why I use credit cards and the psychology behind what is the benefit of running a business on credit, basically, and not using your own money up front. I talk about mainly how to build brands online and a lot of entrepreneurship stuff as well, if that is what you’re into.

Quick note: some of the cards mentioned below may involve an affiliate or referral relationship.

Why I Use Credit Cards for Cash Back

The way that I like to use credit cards is for cash back. The reason I personally use credit cards is for the cash back benefit, so the cards that I’m explaining today are really going to be the best cards out there for that benefit. With credit cards, I don’t spend money on credit cards that I don’t have, and that’s where you get really dangerous with credit cards. Again, the only reason that I use credit cards is for these rewards, that’s basically it. So if you need the credit cards to actually have capital to buy stuff, that’s awesome, but just know, if you don’t pay it back, you have huge amounts of interest that you’re going to be improving every single month.

Putting Business Expenses on Credit Cards

Whether that’s media buying for Facebook ads, TikTok ads, Instagram ads, whether that’s for inventory, whether that’s for software, whatever it is, I try to put every single expense on my credit cards. There are exceptions of a few things that you can’t really put on your credit cards, like my rent in my office or my employee wages, that has to come directly out of my bank account. But if there’s an opportunity for me to charge my credit card, I do that.

Last Year’s Cash Back Earnings

When you actually do the calculations of the amount of cash back that I personally get, for my business being an online store owner, you get a significant amount of cash back. Last year alone, I made at least fifteen thousand dollars just in cash back, and I’m going to explain how I actually did that for my business specifically, which is how to build a brand online via e-commerce.

Main Recommendations

Cards for Businesses Not Spending on Media Buying

The first two cards that I’m going to explain are really going to be a good fit for you if you don’t plan on spending money on media buying. Media buying in the e-commerce world means if you’re not going to be running Facebook ads, Instagram ads, TikTok ads to drive traffic, Google ads to your website, the first two cards are probably going to be a better fit because you’re going to almost probably make the same amount of money back. I’m going to explain later on why it’s really important to use a different set of cards if you are planning on spending a significant amount of money on Google ads, Facebook ads, media buying platforms like Snapchat, whatever it is.

Finding the Best Standard Cash Back Rate

If not the best that I’ve seen when it comes to just a standard cash back credit card that I’ve personally seen, again, do your own research, this is just what I do and I really like getting these benefits. The best that I’ve really seen out there is getting two percent cash back for a business credit card and a two percent cash back for any purchase. There are a lot of cards that will say, oh, we’ll get three percent back on this, two percent back on that, or four percent back on certain purchases, like I don’t eat out at restaurants that much to really have a business credit card that’s for four percent. I really want all of my purchases getting me the max cash back possible, that’s just the way that I look at it. Just to be clear, this is all my opinion, so you don’t have to listen to this at all.

American Express Business Cashback Card

The first one that I’m going to show you is the American Express Business Cashback, and when I say the max cash back without an annual fee, I’m looking for the cheapest cards that are going to give me the most. Usually if you’re a small business really spending a bunch of money in the beginning, we did in our first year, but I also knew how to do Facebook ads and Google ads already going into my business. A lot of people that don’t, it might take you a little bit more time when you’re getting into online e-commerce. This card is a good card because there’s a zero annual fee, and you get a statement credit bonus, earn up to 500 dollars, earn 250 dollars statement credit after you spend 5000 dollars in qualifying purchases within the first six months, plus earn an additional 250 dollars statement credit after you spend an additional ten thousand dollars. So if you’re not planning on spending 10,000 dollars in the first six months, which you actually might, you’ll be surprised how fast expenses accrue as you’re running a business and turning over product, so that actually might be really attainable.

Spark Business Card

If you plan on spending more than fifty thousand dollars and not doing Facebook ads, Google ads, Instagram ads, I would say the Spark Business Card. This is the one that I personally have, I have this one plus the Amex ones that I’m going to talk about in a second. This one does have an annual fee, but if you plan on spending over fifty thousand dollars in expenses the first year, that’s already a thousand dollars back, so after the 150 dollar annual fee you’re netting around 850 dollars just from spending over fifty thousand dollars. It offers two percent cash back on every purchase with no minimums or expiration date, that’s a really powerful card. Their intro offer is actually a really good intro offer, when you spend five thousand dollars in the first three months you’re going to get a 500 dollar credit, that’s the intro offer that I was looking for before.

I think when you’re first starting a business, you spend money pretty fast. Five thousand dollars isn’t that much to spend in three months when you start paying for stuff, especially if you start running paid traffic. So those are the two first cards that I say are really the cheapest that you’re getting max benefit from. But here are the other cards that I use, and how powerful these cards are when you actually start spending a significant amount of money on media buying.

Other Cards

American Express Business Gold Card

The next card is the American Express Business Gold Card. The reason I specifically use this card is for a couple of different reasons. The first reason is that it gets you 4x points when you purchase in two categories, and one of those categories is US purchases for advertising and select media online. As an e-commerce store owner, for instance, I spent over 150,000 dollars on Facebook ads, that is considered an online advertising charge to the Amex card, and Amex is going to recognize that charge and give you four times the points every single time you spend money on Instagram ads, Facebook ads, TikTok ads, Google, Snapchat, whatever it is. As long as the charge comes through as some form of media buying online, you are going to be eligible for the 4x points, and that’s not where it stops. With this trick, specifically for people that are doing media buying for e-commerce, the real beauty in this is not only are you getting that 4x points, which is going to definitely surpass the 295 dollar annual fee, there’s another card that if you partner it with this Amex Gold card, something else really cool happens.

Combining With the Charles Schwab Platinum Card

I don’t just have the Amex Gold card, I also have the Charles Schwab Platinum card. When you have the Amex Gold card and the Charles Schwab Platinum card, which is 695 dollars a year, even still, if you’re spending enough money on Facebook, Instagram, and Google ads, you’re going to make back your money like tenfold on that initial investment for the cards. If you’re spending the right amount of money every single year, say you spend a hundred and fifty thousand dollars times four, you’re going to get six hundred thousand points. So I took this six hundred thousand points and just cashed out straight away.

Here’s an example of what that would actually equate to in cash. I can cash out this charge for 949 dollars, but the amount of points needed is 1,582. If I do 949 divided by 1,582 points, basically it’s saying essentially one point is the equivalent to 0.006 cents. If I go ahead and time six hundred thousand times 0.006, if I were to cash out my six hundred thousand points right now, I would be able to cover about thirty six hundred dollars of purchases.

Investing Rewards for a Higher Cash Back Rate

With that being said, if I go ahead and open a second American Express card, the Charles Schwab Platinum card, which costs around 695 dollars, that’s totally fine as long as you’re spending enough money where this actually makes sense. The cool feature about this card is that it allows you to invest your rewards. Instead of getting 0.006 cents per point of cash, you actually end up getting 0.011 per point of cash. So what that actually ends up coming back to is whatever you spent, because remember I spent 150,000 dollars, when I times my 600,000 points that I earned from spending 150,000 dollars by 0.011, it almost comes out to about 4.4 percent cash back, which is hard to find on most other business credit cards.

How the Combo Math Breaks Down

By doing this method, if I go ahead and multiply 600,000 rewards points times 0.011, I’m actually going to end up getting around sixty six hundred dollars back. If I divide sixty six hundred dollars of cash back by a hundred and fifty thousand, which is what I spent, that comes out to 4.4 percent cash back. How you actually do that is by opening the American Express Business Gold card and the Charles Schwab Platinum card. Once you have both accounts under the same business name, you’ll be able to view both credit cards in one dashboard, and as you start accruing points, you’ll see a button that says invest your rewards under your reward points. When you do this, you cash out at a four and a half percent cash back off of your spend, and it deposits to a Charles Schwab brokerage investor account.

Covering the Annual Fees With Cash Back

In theory, what Charles Schwab wants you to do is take that money and invest it in something, either stocks or bonds or whatever you can invest it in if you want. But if you just want to get the cash back, you can sync this Charles Schwab brokerage account straight back to your debit card and transfer that money back into your account. So that 6,600 dollars clearly covers the 295 dollar Amex Gold card fee plus the 695 dollar Charles Schwab credit card fee per year. So even though you’re spending a thousand dollars a year on the cards, if you’re spending enough money on ads, which should be your goal eventually, if you’re not ready for this now, hopefully one day you will be. If you do this method, you’re going to be making the max amount of money back possible.

Additional Perks and Final Recommendation

Not to mention that you’re going to get all the perks at the airport, you get a 20 dollar Uber credit, perks with Saks Fifth Avenue, there are so many benefits to having the Amex cards. Amex is also one of the few cards that once you show them that you’re a really responsible credit card holder, they really kind of give you a very high, close to unlimited, budget to spend every single month. With that being said, you should be paying off your credit card payment every month, ideally paying it off fully every time you have a billing statement. Those are the credit cards that I highly recommend and personally use for my own store.