Finding the Right Credit Cards to Pay Suppliers and Maximize Points
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 a couple of websites highlighting credit cards with the best offers currently:
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 accounting questions you would like considered for the column to HGatter@AccountingSupportLLC.com with the subject line of "Ask the Accountant."
Harriet Gatter, owner of Accounting Support LLC, was an ad specialty distributor for 23 years and an adjunct professor of accounting at Neumann University. She sold her ad specialty business in 2012, became certified as a QuickBooks ProAdvisor, and now works exclusively with ad specialty distributors nationwide on their QuickBooks, order management and accounting needs.