Not all business credit cards are equal when it comes to large purchases. They don’t all offer the same protections or perks for big spending. What’s more, not all spending is the same. The definition of a “large” business purchase is very much in the eye of the spender., but if you need to purchase computer equipment for your office, a new refrigerator for your restaurant or make a big internet ad buy, you could easily be talking about a bill in the thousands of dollars.
If points and miles are important to you, one of the first things you should consider when making a large purchase is which card will give you the largest rewards return. That means examining both bonus category rewards and points valuations beforehand. After all, you don’t want to make a major office supply store purchase with a card that pays its top rewards on travel spending. But there are other considerations as well, so let’s walk through five questions you should ask yourself when deciding which business card to use for a major purchase.
Is It a Charge Card?
Charge cards are ideal for large purchases because they have no preset spending limits, although that doesn’t mean the issuer will let you spend whatever you want. The primary issuer of charge cards, American Express, says this about spending restrictions on The Business Platinum® Card from American Express OPEN:
“No preset spending limit does not mean unlimited spending. Purchasing power adjusts with your use of the card, your payment history, credit record and financial resources known to us and other factors.”
Also, unlike with a credit card, you’ll be required to pay off your balance in full each month with a charge card. So if you need to make a big purchase, make sure you have the cash on hand to pay for it. (This is a smart habit to form in any case.) If you do need extra time, both the Business Platinum and The Business Gold Rewards Card from American Express OPEN offer a feature called Pay Over Time, which allows eligible cardholders to pay for certain purchases beyond the due date — although you’ll accrue significant interest by doing so.
Does the Card Offer Purchase Protection?
Bad news first: Some issuers are devaluing or eliminating altogether benefits like this. But here’s the good news: American Express says it will improve its purchase protection and extended warranty benefits (more on that later) come August 1, 2018.
Under purchase protection programs, issuers pay to reimburse or replace goods that are stolen or damaged which have been purchased with that card. In all cases, you’re limited by time and value — issuers will only approve claims made within a certain period of time after a purchase and only up to a certain amount. You’ll also have to look out for items excluded from coverage like antiques or motorized vehicles. When filing a claim, you’ll need to document your loss with receipts and a police report in case of theft.
Many consumer cards offer low coverage limits, but a number of business cards offer higher levels of coverage. Cards that offer maximum coverage of up to $10,000 per claim and $50,000 per account in a calendar year include the Amex Business Platinum, Capital One Spark Cash for Business and the CitiBusiness / AAdvantage Platinum Select World Mastercard.
If you have a claim, make sure to be mindful about when you file, as issuers set a deadline of between 90 and 120 days after purchase. After that, purchase protection claims will no longer be valid.
Does the Card Offer Extended Warranty Protection?
Extended warranty protection is both widely available (for now) on business credit cards and relatively uniform. In many cases, it extends the manufacturer’s warranty by an additional year on eligible warranties of up to three or five years, depending on the issuer. Come August, American Express cards will improve their protection to match the length of any manufacturer’s warranty that’s less than two years; for warranties between two and five years, American Express will add two additional years of coverage.
These warranties cover you against breakage for items you purchase with your credit card if it occurs after the manufacturer’s warranty has already expired. If your claim is approved, you’ll typically receive a check or statement credit reimbursing you for repair costs, replacement costs or the original purchase cost.
Business credit cards that carry this benefit include the Gold Delta SkyMiles® Business Credit Card from American Express, the Hilton Honors American Express Business Card, the Starwood Preferred Guest® Business Credit Card from American Express and the United MileagePlus Explorer Business Card.
Does the Card Earn Transferable Points?
As mentioned earlier, when you make large purchases, you want to make sure you maximize your reward-earning potential. One way to do that is to take advantage of category bonuses. The other way is to ensure you’re using a card that offers the flexibility to transfer points and miles to other loyalty programs — and potentially reap a larger payoff.
This is where TPG’s monthly valuations come into play. Find a card that earns points in programs that offer transfer options, and you’ll find a card that offers the potential for maximum redemption value. Here are a few of the top valued programs and their current point valuations:
- Chase Ultimate Rewards — 2.1 cents per point
- American Express Membership Rewards — 1.9 cents per point
- Starwood Preferred Guest — 2.7 cents per point
Note that the Starwood program will be changing in August when its points are converted into Marriott’s new loyalty program. But the new program will still feature dozens of airline transfer partners, which means the points will still be useful as a flexible currency.
Cards that offer transferrable points include many of the previously mentioned cards, such as the Business Gold Rewards, SPG Business and the newly released Ink Business Unlimited Credit Card, although with the latter you’ll need to pair it with another transfer-enabled card in the Chase Ultimate Rewards portfolio in order to be able to transfer.
Does the Card Offer Spending Bonuses?
Spending threshold bonuses are different than welcome bonuses, and can prove valuable to cardholders who have a large purchase in mind. Threshold bonuses come in the form of extra rewards, free hotel stays or elite status after a high amount of spend, usually in the tens of thousands of dollars.
The only major bonus that’s focused on a single purchase is the one currently offered by the Business Platinum card, which normally pays only 1 point per dollar on non-travel spending. But if you make a single purchase over $5,000, the card earns 1.5x. Since Amex points are so valuable, that could be a nice boost.
Other bonuses are focused on annual spending, so a large purchase can help you get closer to the bonus. But unless it’s a really large purchase, you’ll need to hit these marks with additional spending. Here are some examples:
- Earn 10,000 bonus miles plus 10,000 Medallion Qualification Miles (MQMs) by spending $25,000 in a calendar year, plus another 10,000 bonus miles and 10,000 MQMs by spending $50,000 in that same year using the Platinum Delta SkyMiles® Business Credit Card from American Express.
- Get a $99 companion certificate after spending $30,000 in a cardmember year with the CitiBusiness / AAdvantage Platinum Select World Mastercard.
- Earn a Weekend Night Reward from Hilton Honors after you spend $15,000 in a calendar year with the Hilton Honors American Express Business Card.
- Reach Mosaic status in JetBlue’s TrueBlue program by spending $50,000 on the JetBlue Business Card in a calendar year. You can also earn this status by flying 30 segments and earning 12,000 base flight points; or just by earning 15,000 base flight points in a calendar year.
- Earn up to 15,000 Tier Qualifying Points each calendar year at a rate of 1,500 TQPs for every $10,000 you make in purchases on the Southwest Rapid Rewards Premier Business Card. You’ll usually need 35,000 Tier-Qualifying Points or 25 paid one-way flights in a calendar year to qualify for Southwest’s A-List status.
- The United MileagePlus Explorer Business Card will waive the Premier-Qualifying Dollar (PQD) requirement for United elite status (excluding Premier 1K) when you spend $25,000 on the card (or across multiple United cards) in a calendar year.
Which Are the Best Cards?
Much like the definition of “large,” your mileage may vary on which cards are the “best” to use on big purchases. Look for the combination of features you value the most — so if purchase protection isn’t an insurance you’re interested in, don’t factor it in your own math. For the purposes of this analysis, however, we’re judging cards based on how many categories of benefits they offer. Here’s a table that breaks down these benefits on a number of popular business cards:
* You can transfer points only if you pair this card with a transfer-enabled card in Chase’s Ultimate Rewards program.
** Purchase protection on the Ink Business Preferred is being eliminated on August 26, 2018.
There’s a pretty wide range of scores. Here’s how they stack up if you assign a point to each consideration.
- The Business Gold Rewards Card from American Express OPEN
- Starwood Preferred Guest Business Credit Card from American Express
- Delta Reserve for Business Credit Card
- Gold Delta SkyMiles Business Credit Card
- Hilton Honors American Express Business Card
- Ink Business Cash Credit Card
- Ink Business Preferred Credit Card
- Ink Business Unlimited Credit Card
- JetBlue Business Card
- Platinum Delta SkyMiles Business Credit Card from American Express
- Southwest Rapid Rewards Premier Business Card
- United MileagePlus Explorer Business Card
One of the great things about business rewards credit cards is their diversity. Look at all the different ways you can be rewarded for your spending. You should be able to find a card that matches what you buy with the rewards and protections you seek. There’s one other thing to consider, however. If you need to make a large business purchase — and liquidity is a concern — you may want to consider a card that offers a 0% introductory offer. Although more common on personal credit cards, there are a number of business cards that offer initial interest-free periods on purchases and balance transfers of 12 months or longer.
Some examples include the SimplyCash Plus Business Credit Card from American Express, which offers a 0% introductory APR on purchases for 15 months (which then rises to a variable 13.74% to 20.74% APR), and the Ink Business Cash Credit Card, which offers a 0% introductory APR on purchases and balance transfers for the first 12 months before rising to a variable 14.74% to 20.74% APR. Keep in mind we always recommend you pay off your credit card bill in full and on time every month, so you should only take advantage of these options if you’re certain you’ll be able to make the payments on time and that you’ll pay down the balance in full before the interest eats up any travel rewards you earned from the purchases.