Credit cards are almost an indispensable part of daily life for most of us. But did you know that if you are operating any type of business such as dropshipping, selling services on or off-line etc. you can use the best reward credit cards to increase your personal or business cash-flow or profit margins?
It’s not rock science, and many of you might even be doing this already. If you’re not using this business hack already though you’ll kick yourself for not thinking of it earlier!
It’s simple to get started. All you gotta do is simply start paying for all your business expenditures using your reward credit card. From there pay off the balance with the money in your business bank account each week.
The key to remember is to always be sure to only pay for expenses if you already have the money sitting in your bank account. By so doing you will simply use those funds to pay off the existing credit card balance each week. Doing so assures you’re wisely building up points while avoid debt.
The goal here is to put more money in your pocket not get you or your business into long-term debt!
What are reward credit cards?
It’s a pretty simple concept. The best rewards credit cards will give you rewards in many forms such as:
- points to be redeemed for discounts or cash
- immediate or accrued cash back
- sky miles for traveling
- gas and clothing, and food discounts
- gift cards and many other reward types
Those rewards among others are given to you for each dollar you spend. Some reward credit companies will give you one or more points per dollar you spend. Take the Discover It Miles rewards card for example that I use. On their site they say this:
You Can Apply For This Card Here
(no annual fee)
To get a rewards card for yourself you can apply to the approved card issuer just like Discover who will in turn provide you a card in form of a Visa, Mastercard, American Express or Discover to use for daily purchases. You just cannot use these cards to pay for installment loans such as your mortgage. But most other expenditures such as utilities, groceries, entertainment, gas, internet, cell phone, and so forth are all things you can pay for to build up points that can be redeemed to cash.
Here’s a list of some of the best reward credit cards in 2020:
- Chase Sapphire Preferred Card
- Annual Fee: $0 intro annual fee for the first year, after that $95
- Reward: Earn 2X points on travel and dining at restaurants.
- Citi Double Cash Card
- Annual Fee: no annual fee.
- Rewards: 1% cash back plus 1% on paid purchases.
- Blue Cash Everday Card from American Express
- Annual Fee: no annual fee
- Reward: up to 3% cash back on purchases
- Capital One Spark Cash for Business
- Annual Fee: zero for the first year then $95 after that
- Reward: 2% cash back
- U.S. Bank Altitude Reserve Visa Infinite Card
- Annual Fee: $450 annually
- Reward: 3 points earned per dollar spent and no foreign transaction fees charged
- Capital One QuicksilverOne Cash Rewards Credit Card
- Annual Fee: $39
- Reward: 1.5% cash back on every purchase
- Alliant CU Visa Signature Card
- Annual Fee: $0, nothing first year and then $59 thereafter
- Reward: 3% cash back in year one & 2.5% cash back after and no foreign transaction fees
- Best Western Rewards Mastercard
- Annual Fee: $0 (Zero)
- Reward: 2 points for each $1 spent, 32,000 bonus points upon first purchase and stay at hotel and a list of other great benefits you can read on their site.
So how do I make money with my reward cards?
Let’s say you’re running a dropship business. First, customers pay you for your product or service on your online store. In turn you take a portion of that money to pay your dropship supplier for the cost of the product. From there you keep the profit for your business, unless you’re following the loss leader sales strategy here.
Now, you could just transfer that money received from your customer and put it directly towards purchasing the product from your supplier, OR you could put that money in your bank account and pay your supplier first with your business reward credit card which earns points and cash back bonuses. As that process continues you’ll have an extra stream of income to fund future travel, hotel stays, vacations, etc. using rewards you wouldn’t have otherwise earned or received using a regular business card to pay for the product! Let me illustrate:
$20,000 (monthly gross sales volume) X 15% (profit margin) = $3,000 (monthly net profit) + 1.5 points per dollar spent (30,000 points = $300)
Using your rewards card to pay your vendors has now created an extra $300 in profit at minimum each month in this scenario. And many times you’ll earn up to 3 points per dollar spent on certain expenses which would result in a higher reward each month. This “extra” income each month automatically occurs giving you a profit you normally would not have gained if you didn’t use a rewards credit card.
Using the best reward credit cards provide an automatic and incentivized method of boosting your cash flow; and if it’s something you never thought of before, there’s no quicker and more efficient way than with some of the introductory offers providers currently offer. Keep in mind though, the point is to pay the card balance off each week with the money you already have existing — you do not want to let it accrue and put your company in unnecessary debt.