Finding the Right Credit Cards to Pay Suppliers and Maximize Points
Ask the Accountant…
Question: How do you suggest I research credit cards to pay my suppliers and get points?
Answer: Credit card points are a nice perk for our industry, but you should only use credit cards for this purpose if you pay the complete balance off each and every month. If you don’t plan for your cash flow and do this, you can end up in serious debt and, at a minimum, all benefits of accruing points will be more than offset by your interest expenses.
That being said, a promotional products distributor can accumulate a large number of points with this. Take, for example, a distributor with $250,000 in annual sales and cost of goods sold at 60 percent (pretty typical). With that, there would be around $150,000 of supplier expenses that potentially could be charged, gaining points. If a supplier charges an additional fee for using credit cards, I would not bother paying that supplier with a credit card, as the fees more than offset the benefit of the points.
In searching for a card, you first need to decide what your goal is for the points such as:
- Airline Travel or Upgrades
- Hotel Travel
- Cash Back
- Purchasing Goods such as Electronics
There are cards geared toward different uses of points.There are also a couple of websites highlighting credit cards with the best offers currently, such as www.pointswithcrew.com and www.ThePointsGuy.com.
There you will see the cards with the best offers now for various goals, the bonus points offered for getting the cards, and the annual fee. Be especially aware of the annual fee, as this can wipe out the benefit of the card.
Credit card points are a nice bonus for our industry, but only if the cards are managed and paid off in full monthly.
Please email your questions to Harriet at Ask The Accountant.
QuickBooks Premier and Enterprise can be modified to better serve ad specialty distributors. Harriet Gatter is a QuickBooks ProAdvisor, a former accounting professor and a former ad specialty distributor. She advises ad specialty distributors to use QuickBooks Premier and Enterprise, often in conjunction with other industry-specific software, to manage the complexities of the ad specialty business, with the results being time saved, errors eliminated and an overall accurate accounting of your business. Contact her at firstname.lastname@example.org.