Internet Business Guide

Pay Business Expenses Wisely And Travel For Free

Jan 3 by Marcus Hochstadt | Posted in Business, Lifestyle

Do you pay your business expenses wisely? Or like the headline indicates, would you like to travel the world for free (which is one opportunity that occurs when you pay your expenses wisely?)

I’m not talking about traveling from street to street by feet, but from continent to continent using an airplane, for example. ;-)

These days, I’m not doing it as often as I’d like to since my expenses are fairly low. But I do collect points using my Lufthansa Gold Card almost every day and will soon have accumulated enough points that entitle me for a free intercontinental round trip once again. (My first and last free round trip was with VARIG since I accumulated 70,000 points using their Smiles card, which I recently gave the trash to eat though.)

What the heck to I mean by that anyway?

I’m talking about owning and using a credit card (or a membership card of an airline company of your choice) where you receive a certain amount of bonus points for every dollar (or Euro, in my case) spent, or for every mile flown.

In my case, a round trip Brazil – Germany may result in 12–18,000 points (Economy Class) up to 24–36,000 points (Business or First Class) PLUS an additional Executive Bonus (up to 43,000 points!) depending on the status of the membership card you own, the booking class, and the ticket you purchased.

In other words, wisely spent, you could end up purchasing a ticket and due to extra points you receive (and the flight itself) you could receive a free international round trip right after the one you just had! Or you take advantage of a free upgrade to Business or First Class. And while you pay your business expenses wisely, that is, accumulating one point (or more) for each Dollar or Euro spent, you’re going to receive that free travel (or upgrade) much, much faster.

For more details, go ahead and find a mileage calculator on your airline’s Web site. For example, Lufthansa has a very neat mileage calculator in four languages at www.meilenrechner.de.

Also, as Tim Ferriss recommends on his blog today, I would, by all means, AVOID using it for purchases of things you don’t really need. It is, instead, a matter of selecting and paying intelligently and wisely…

It is the use of credit cards to pay for inevitable expenses, not the use of credit cards to actively accumulate points by buying things otherwise unnecessary.

For example, you spend $1,500/month in advertising. Because a mileage program is associated with the CC you use, after one year you accumulated 18,000 points that then might entitle you for a free domestic round trip. Or let’s say there are two supermarkets around your corner; both offer about the same products and have similar prices while one of them promotes payments via credit card. You shop in the latter and spend about $500/month there, which makes it to 6,000 points accumulated in one year. Now you’re at 24,000 points.

The list goes on and on like this. I think you get the point…

Here’s what I recommend you to do…

#1 – Research cards available and list the advantages/disadvantages of each. Or hire someone to do it for you since it can be fairly time consuming.

#2 – Decide upon and order two cards. In other words, in many cases you’ll want to have either VISA and AMEX or MasterCard and AMEX. Why? You’ll stumble upon moments where one card doesn’t go through a machine, or you order at a company that gives you additional points when you pay with the CC of company X, while other stores only accept one of them.

In short, sometimes you have advantages using VISA or MasterCard while on another location (or day) you’re better off using AMEX (they seem to be more flexible.) And, of course, where you live is also an important factor as well as a couple other points. (I still have to get my AMEX. Will do so when we visit Germany again this year. They were just too slowly the last time.)

#3 – The next is about “controlling” your own mind from the point you receive the cards. A lot of people fall into the trap of buying in order to gain an XX amount of points. Don’t. Only pay with your CC what you would pay cash otherwise; or you might end up “bankrupt.”

By the way, that includes to pay the whole CC bill ASAP, as soon as it arrives.

OK, that’s about it.

Now I wish you happy flying! :-)

—Marcus Hochstadt

Tags: Business, cost, credit card, expenses, mileage, miles, payments, travel