Q&A: Which Business Credit Card Just For Corporate Travel
I recently got an email from a company owner asking for advice for a business credit card for his travel expense. We went back and forth on emails a few times. This is a full reprint of our conversation. Hope you take something out of this. (He or she shall remain anonymous).
I am interested in options for acquiring a corporate credit card that our company would use to purchase airfare, which would also accumulate miles/points.
We spend about $100k per month in airfare.
My Credit Card – a few questions:
1. what is your company revenue? $1MM
2. what airlines do you/your employees fly? All major airlines US Air, Delta, American
3. which hotels do you/your employees normally stay at? Marriott, Hyatt, Embassy Suites
1. what is your company revenue? Answer – $1MM
2. what airlines do you/your employees fly? Answer – All major airlines US Air, Delta, American
3. which hotels do you/your employees normally stay at? Answer – Marriott, Hyatt, Embassy Suites
Mr Credit Card – Does your company pay the balance in full every month or do you carry a balance from time to time. And how many employees will be issued the card?
We pay balance in full. We have around 300 employees who travel.
We do not plan to issue cards to employees. We are going to set up the card # in out travel agent where all airfare will be charged to the card.
Mr Credit Card – Ok – here are my thoughts.
1. you would want to go for a charge card – since there is no guarantee you will get the credit that you need on a regular credit card.
2. Because of this, I would recommend Amex.
3. There are a couple of ways to do this. Firstly, you can try to get an Amex corporate card. But I believe that there minimum annual revenue requirements is $2mm. So your company may not qualify. The advantage of getting a “corporate card” is that the approval is based on your company revenue and profits and not your personal credit.
Amex also has a bunch of “small business” charge cards that will suit you. Bear in mind that when you apply for a small business charge card, your personal credit will be pulled (though payments are reported to business credit bureaus and not personal bureaus). The advantage of their “small business” cards is that they are linked to their network of merchants called OPEN. And you can get 5% discounts when you use their business OPEN cards with Marriott and AirTran (which can save you some money).
There are two cards to consider in this space. The first is the American Express Business Gold Card. The advantage with this card is that there is no preset spending limit and you get your 5% discounts with Marriott and AirTran and other merchants as well. The only issue I have with this is that Membership Rewards has less airline partners today than it did years ago – no AA, US Airways, Continental expires in Septemnber 2011and SouthWest will expire also. But there have Delta (among the major airlines). Having said that, you can use points to book flights with Amex Travel and if it is domestic flights you are looking to use points for, then redeeming points this way is actually better than converting into devalued miles.
The other card to consider is the Starwood Preferred Guest business Card. The reason is that Starwood allows you to transfer points to miles for a one for one ratio. And when you transfer 20,000 points into miles, you get 5,000 bonus miles! AA, Delta, US Airways are in the program. Continental and United are in also – but the conversion is 1:2. The drawback for Starwood is that you may not get the required credit line you need since it is a credit card and not a charge card with no preset spending limit. The Starwood Card is part of OPEN, so you get your 5% discounts at Marriott and Airtran.
4. But for your purpose, I think you should also consider one of American Express Personal Card – the Premier Rewards Gold Card. Reason is this is the only Amex Card (consumer, small business or corporate) that pays you three points for every dollar you spend on travel. And since you are using this card mainly for airline tickets and hotels, it would be great. The disadvantage is that you would not get discounts on Marriott or AirTran.
In light on this, I suggest you get the Premier Rewards Gold Card and earn triple points when your employees fly. Get the Starwood Credit Card also and ask your travel agent to charge any hotels to this card (especially Marriott and AirTran tickets – since you get a 5% discount).
Or if just want to keep things simple, the American Express Business Gold Card will do as well.
hope this helps. Let me know if you have any other questions.
Thank you for your thoughts.