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
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The Carnival of Smarter Investing #11…
Welcome to the Eleventh Edition of The Carnival of Smarter Investing! Each week we’ll post featured articles by investors and writers in the areas of business and real estate, with the best article of the week being featured on the front page of booz…
Carnival Of Tips – January 5, 2008…
Welcome to the January 5, 2008 edition of Carnival of Tips. We had over 20 great entries this week on:
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Great post. Included as one of my favorites from Carnival of PF. I was a total late bloomer to this concept but am a believer now. My card of choice is the Alaska Miles Visa. I push all bills and expenses through that card and pay it off and get great miles for it. Recently I was looking for a refi and found that they give 1300 miles for every 10K that you finance. I thought it would be bad choices, but all mortgage companies were premium choices and quotes gave my bank a run for the money. I’ve been able to do a lot more free/discount flying as a result. Love it!
Teaspoon
I’m glad you like the article, Teaspoon.
Yes, there are more possibilities for accumulating points. We just have to take a look at the countless offerings they announce. More and more companies offer those membership cards rewarding purchases with mileage points.
Taking a look at those big aircraft companies and their partnerships also often helps.
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Carnival of Everything Finance: # 11 Edition…
Welcome to the January 16, 2008 edition of Carnival of Everything Finance.
We had over 80 really good articles submitted for this edition.
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[…] Hochstadt presents Pay Business Expenses Wisely And Travel For Free posted at Marcus […]
Great post! :)
You are right, I got free ticket from my credit card last year. The bank offers some point to exchange, and I got free tickets for travel, yippy ^_^
Thank you for sharing :)
I have never gotten around to figuring out which credit card to use to get the most rewards for my traveling. I also read Tim Ferris’s post – he talks about piggybacking and recyling – it’s confusing! This is probably why I have never done it before. But this post has gotten me inspired to stop procrastinating and do it!
That’s true, by using credit cards, there’s a point to be earned. And there’s a reward on that points. Some airlines company offered a free domestic or international flight by just using your credit card. It’s the most reward you will receive.
That makes sense. If you are an avid traveler, and do a lot
of business on air, then accumulating miles is indeed a viable way of traveling
for free in the future. But what if you don’t have credit cards nor do you do a
lot of flying?
I’m very much lucky my boss
shoulders that all the time. I don’t understand why other companies won’t do
that to their employees. They weren’t there for a vacation in the first place
so why no g’s?
Is this really possible? I must do this when my time of traveling comes.
Missy Harrison
Who wouldn’t want to travel the world for free? Times like these, we should be wise spending our hard earned money.
Thanks for the tips! This one will go to my fb wall!