Ah, credit card hacks — when they work, they’re amazing. But when they don’t, they can feel like such a waste of time.
At their best, credit card hacks are savvy strategies for getting the most out of your credit cards, from racking up rewards to maximizing cash flow. These tricks can be a game-changer for your business finances, but beware, not all hacks are created equal.
In this article, we’ll explore the top five credit card hacks that work to maximize your business rewards. Plus, we’ll warn you about five not-so-great strategies to steer clear of.
1. Sign-on bonuses
Sign-on bonuses are a golden opportunity for business owners opening a new credit card. These bonuses, which can be in the form of points, miles, or cash back, are typically offered when you meet a specified spending threshold within the first few months of card ownership.
Sign-on bonuses are particularly advantageous for businesses, as your regular operational expenses, such as inventory purchases, equipment upgrades, or marketing costs, can help you easily reach these spending thresholds.
By aligning these necessary expenses with the bonus criteria, you essentially earn rewards for spending what you were going to spend anyway. If you're unsure about how to get a business credit card, it's worth researching to take advantage of these lucrative offers.
2. Benefit stacking
Why settle for one reward when you can stack them? The benefit stacking credit card hack involves opting for a credit card that allows you to leverage various benefits simultaneously. This approach is particularly effective for businesses as it turns every transaction into an opportunity to earn more in several ways.
With the Expensify Corporate Card, for example, you get 1% cash back on every US purchase. And if your monthly spending across cards exceeds $250K in US purchases, this reward doubles to an impressive 2% cash back.
But the benefits don't stop at cash back. Expensify cardholders also enjoy exclusive access to travel booking, which includes invaluable services like free medical advisory and emergency transport, and up to 50% off their Expensify subscription, making expense management more cost-effective.
By stacking these benefits — cash back, travel services, and subscription savings — every dollar your business spends works harder for you.
3. Alternate spending between high-earning cards
For small business owners, managing expenses wisely is key to maximizing financial benefits, and this is where alternating spending between high-earning credit cards comes into play. As a small business, you likely have a variety of expenses that fall into different categories — from office supplies and equipment to travel and client entertainment.
By having multiple credit cards, each offering higher rewards in specific categories, you can strategically align your spending to the card that offers the best rewards for that particular type of expense.
For instance, use one card that offers extra cash back on office supplies for all your stationery and equipment purchases and another that gives you more points on travel for your business trips. This way, you're not just earning rewards on your spending; you're optimizing every transaction to get the most value back into your business.
4. Pay your bills with your credit card
Using your credit card to pay for regular business expenses, like utility bills or supplier costs, is a smart move. It helps manage cash flow and accumulates rewards on payments you’d be making anyway.
Moreover, the grace period between the purchase and the payment due date effectively acts as a short-term credit line, offering additional flexibility in managing your business's cash flow. This approach can be particularly beneficial if you’re still fine-tuning your small business pricing strategy, as it allows for more agile financial management during periods of fluctuating income and expenses.
5. Use and pay off your card responsibly
The best credit card hack? Pay off your balance in full and on time. While this might not be the most glamorous rule, it’s the one that matters the most.
This practice helps you avoid interest and fees, and it also boosts your credit score. A significant factor in determining your credit score is your credit utilization ratio — or how much credit you're using versus what you have available — which ideally should be kept below 30%.
Staying under this magic number signals to credit bureaus that you're managing your credit well and not overextending yourself financially. It shows them that you're not maxing out your cards and you’re handling your finances like a pro. As a result, you'll find it easier and often less expensive to qualify for loans, credit lines, or credit cards in the future.
In essence, paying your card off responsibly is more than just avoiding debt; it's about building and maintaining a solid financial foundation for your business.
5 credit card hacks to avoid
When it comes to credit card reward hacks, if it sounds too good to be true, it probably is. While the allure of quick gains or clever shortcuts can be tempting, the reality often falls short of expectations. In fact, some widely touted credit card hacks can end up being more detrimental than beneficial.
Here are five hacks that, despite their appeal, are best to be avoided:
1. Sending money to friends (or to yourself)
This hack involves using your credit card to send money, earning points in the process. However, these transactions are often treated as cash advances, incurring high fees and interest rates. It's a costly way to earn rewards, and ultimately, not worth it.
2. Canceling the card before the annual fee
Some businesses open credit cards for the sign-on bonus, then cancel before the annual fee kicks in. This strategy ultimately hurts your credit score and might lead to missing out on ongoing benefits and rewards offered by the card.
3. Purchasing items and then returning them
Buying items to earn rewards and then returning them sounds clever, but most credit card companies are on to this trick. Returns are usually deducted from your rewards balance, and frequent returns can flag your account for suspicious activity.
4. Buying prepaid cards with your credit card
Buying prepaid cards can rack up rewards quickly, but many issuers classify this as a cash-equivalent transaction, attracting fees and higher interest rates — meaning it’s not a cost-effective way to accumulate points.
5. Using the 15/3 credit card hack to boost your credit score
The 15/3 credit card hack suggests making two payments per billing cycle: one 15 days before the due date and another three days before. Advocates for this hack claim that this not only keeps interest low but also impresses credit issuers with your responsibility, potentially boosting your credit score faster than making a single monthly payment.
However, this strategy is based on a total misconception. Banks typically report only one on-time payment per month to credit bureaus, regardless of the number of payments you make — so while splitting your payment into multiple installments can’t hurt, it doesn't actually enhance your payment history or boost your credit score.
Pros and cons of credit card hacks
Credit card payment hacks can be powerful tools if used correctly. These strategies can unlock a world of benefits: higher rewards, finance automation, tailored usage that aligns with your spending patterns, and even potential boosts to your credit score.
Unfortunately, though, there's a flip side to this coin. Some hacks veer into ethically and legally murky waters. What starts as a clever strategy to save a few dollars could escalate into legal troubles or getting blacklisted by credit card companies. It's a balancing act between maximizing benefits and staying within the boundaries of responsible financial practices.
Pros of credit card hacks include:
More rewards and cashback
Improved cash flow management
Enhanced credit score through responsible use
Cons of credit card hacks include:
Possibility of debt accumulation
Risk of damaging credit score if not managed wisely
Potential for higher fees and interest rates
Common questions about credit card hacks
Still have questions about which credit card hacks are worth your time? Explore our FAQs for the answers you seek.
What is credit card flipping?
Credit card flipping is the process of applying for credit cards to earn sign-up bonuses, then closing the account or moving on to another card, which can be bad for your credit score. However, this isn’t often possible, as many card issuers have instituted rules to prevent this from happening.
How can I get extra money from my credit card?
To get extra money from your credit card, look for cards with cashback rewards or sign-up bonuses. Ensure you pay your balance in full to avoid interest, turning everyday expenses into rewards.
Is it better to pay off one credit card or pay down several?
It is generally better to pay off high-interest credit cards first (avalanche method) than to pay off cards with smaller balances (snowball method) because this approach saves you more money on interest in the long run.
The avalanche method involves prioritizing payments on cards with the highest interest rates, minimizing the total interest paid over time. However, the snowball method, which focuses on clearing the smallest debts first, can be more motivating and help maintain a good credit score by reducing the number of outstanding debts.
Ultimately, the best approach depends on your financial situation and personal preference for managing debt.
Capitalize on credit with Expensify
Smart credit card strategies can make or break your business. Fortunately, with tools like the Expensify Card, managing your expenses becomes simpler— allowing you to focus on maximizing rewards while keeping an eye on your financial health.
Leverage the power of smart credit card use with Expensify and watch your business rewards multiply. Get started today!
