Aligning your business and personal spending to get the most rewards

Credit card rewards started with the Discover® cash-back program back in the ’80s, but today’s reward catalogs run the gamut from travel to store cards to electronics and more. The plethora of credit cards and reward choices can leave a small business owner dazed as they look for the ones that will most benefit them. 

Thankfully, aligning your expenses to the best business credit card and personal credit card doesn’t have to be complicated. Below is the ultimate guide on how to get the most out of your credit card rewards when spending for your business and yourself. 

Should you mix business and personal expenses on the same credit card?

Every time there’s talk of maximizing credit card rewards, small business owners often wonder if they can use the same card for personal and business expenses. Especially if you’re a company of one, it can seem like the ultimate way to make money as you spend it.

First off, you can use a personal credit card for business expenses, but it doesn’t work the other way around. Credit card agreements often prohibit you from making personal purchases on a business card. Using one card for both also makes for messy bookkeeping and major tax-time headaches as you try to find tax-deductible business expenses.

Personal and business credit cards also don’t offer the same advantages. Personal credit cards, for example, won’t build your business credit score and have smaller purchase protection limits than business credit cards. 

Having to manage expenses on separate cards can feel like you’ll never accumulate enough to redeem rewards. But if you start with the right cards, you’ll find you don’t have to sacrifice points in the name of keeping business and personal expenses separate.

How to choose the best credit cards for your reward goals

Part of squeezing out as many rewards as you can from a credit card involves selecting the right cards for your situation. These three easy steps will help narrow down your options.

1. Know your spending

Freelance writers and plumbers may both be entrepreneurs, but chances are their expenses look very different. Freelance writers likely have low overhead and don’t need much more equipment than a computer and basic office supplies. With their minimal business spending, it may be fine to keep a personal credit card for business use, and another for all other expenses.

Plumbers, on the other hand, probably make frequent trips to their local plumbing supply store to buy tools and materials, and costs can quickly go into the thousands with high-ticket items like boilers and water heaters. In that case, they’d benefit from having both types of cards. The best business cards will reward how they spend, provide higher purchase protections, and give larger credit limits. For non-business purchases, they can rack up points on a personal card. 

2. Define your goal

It’s crucial to know what you want to see if your rewards align. Do you want to fly around the world? Are you already a traveler and swear by a particular airline or hotel? Do you prefer to buy things for your enjoyment? 

Knowing what you expect from your rewards tells you which credit card benefits to home in on. A program-specific card like a Southwest Rapid Rewards® Priority Credit Card might be great if you love to fly Southwest and want to stay closer to home, but those with their eyes set on the Eiffel Tower will have to look elsewhere. And earning airline miles won’t help if what you want is cash back. That requires a cash-back card like the Chase Freedom Unlimited® credit card.

Cards can also have fixed-value points or transferable points. Fixed-value points have a monetary value attached to them — usually around one cent per point — and are used for travel expenses, like tickets, hotels and car rentals. Points are converted to their cash value so that for a $1,000 airplane ticket, you’d need 100,000 points. 

On the other hand, transferable points offer the highest reward flexibility, because you can use them with any airline or hotel loyalty program your credit card partners with. How much your points are worth is determined by that company’s loyalty program. Sometimes points transfer at a one-to-one ratio or better, but other times your credit card points are worth less. 

3. Pick your credit cards

Once you know whether you need a business or personal card, or both, and you know what kind of rewards you want, it’s just a matter of picking the credit cards that align best with your goals and personal and business spending habits. You’ll want to consider the card’s bonuses, annual fees, foreign transaction fees, and additional perks, like airport lounge access. 

The Chase Ultimate Rewards® program deserves special attention, because it offers both business and personal cards, has excellent rewards, and points can be transferred between cards or pooled with a partner living at your address. 

Of the credit cards in the Chase Ultimate Rewards® family, Chase Freedom® is an excellent first card, because it’s easier to open and has high rewards. The Chase Ink Business Preferred℠ also ranks as one of the best business credit cards. Here are some things you can expect from these two cards:

Chase Freedom® 

  • $200 cash back after spending $500 on purchases within the first three months
  • No annual fees
  • 5% cash back on up to $1,500 on combined purchases in bonus categories per quarter; 1% cash back for everything else
  • 0% intro APR for the first 15 months on purchases and balance transfers; 16.74% to 25.49% variable APR after that 

Chase Ink Business Preferred℠

  • 80,000 welcome bonus points after spending $5,000 within the first three months
  • 3 points for every dollar spent on travel, shipping, cable, phone services and advertising purchases; 1 point for everything else
  • 25% travel discount when booking through the Chase Ultimate Rewards® website
  • 1:1 point transfer to frequent flier programs
  • $95 annual fee
  • 17.74% to 22.74% APR on purchases and balance transfers

Best Personal and Business Credit Cards

Beyond the Chase Freedom® and Chase Ink Business Preferred℠  credit cards, below are the best credit cards in other categories to help you choose the right credit cards for your needs:

Best business credit cards for cash back

Best instant approval business credit cards

Best credit cards for business travel

Best personal credit cards for travel

Best personal credit cards for rewards without annual fees

Follow these expert tips to maximize your reward benefits and perks

To get as many reward benefits as possible out of your personal and business spending from your new card or cards, you’ll want to:

Seize your welcome bonus

To lure people in, welcome bonuses from credit card companies tend to be generous. The Chase Ink Business Preferred℠ credit card gives one of the biggest increased spend rewards of 80,000 points — equal to $800 in cash back or $1,000 for travel. But other cards like the Capital One® Venture® Rewards credit card and the Bank of America® Premium Rewards® credit card give 50,000 miles and 50,000 points, respectively — the equivalent of $500 travel dollars.

The catch is you only earn those points if you meet your spending requirement within the specified time frame, typically the first three months of opening your account. Miss the mark, and you lose the chance to earn tens of thousands of points in one fell swoop. 

Get familiar with your rewards and perks

In addition to a welcome offer, reward credit cards typically offer bonus points or cash back in specific spending categories, and one point or percent for everything else. But when maximizing your spending, you don’t have to stick with just one card. You can rack up points more quickly by looking for the cards that will give you a bigger return than average for whatever you’re buying. Credit card perks also vary widely, but you can only take advantage of them if you know what they are. Some cards offer no foreign transaction fees, purchase assurance, extended warranties, car rental insurance, and more. Skim through your card benefits package to see what yours are. 

Prioritize and organize your cards

While you can use different cards for different purchases, it shouldn’t look like you’re ready to deal out a game of poker every time you whip out your credit cards. Focus on the top three to five business and personal credit cards that have the best rewards for the areas you spend the most, and stash the rest away in a drawer. 

Sticking with a handful of main credit cards ensures you don’t spread your points out too thin, and find yourself without enough points on any one card to cover your reward goals. 

Gather your points, miles and cash-back rewards

If you want to get the absolute highest rewards possible out of your business and personal spending, consider having your main credit cards be part of a program that allows for points pooling. As mentioned before, Chase Ultimate Rewards® lets you do this. It’s a smart way to utilize each credit card’s unique bonus categories to earn top points, and then send them to the card that gives you the most value at redemption. 

For example, you can move all your points into a Chase Sapphire Reserve® credit card, and use them to score 50% more travel when booking through Chase’s rewards portal. It almost sounds too good to be true, but it’s just another example of getting the most out of your credit card rewards. American Express® also lets you pool points with their Membership Rewards® program, except all points go to one central account. 

If you have multiple credit cards, apps like AwardWallet (for Apple or Android) can help you keep track of your points and miles.

Watch out for annual fees 

Rewards cards are only worth it if you get back more than you spend on fees. While cards like Chase Freedom® have no annual fees, the Chase Sapphire Reserve® credit card’s annual fee is $450, and an additional $75 per authorized user. This means if your yearly reward value totals less than $525 for you and your partner, a card with lesser fees may be a better choice. 

Achieve your reward goals without spending thousands

At its core, getting the most out of your credit card rewards is about understanding your personal and business expenses, learning your credit card’s rewards, and strategically using them for maximum value. Picking credit cards rewarding your unique purchasing habits ensures your small business and personal spending is driving you toward the same reward goals — whether that’s guilt-free shopping sprees, flying home for the holidays, or taking advantage of whatever else your credit card offers.