If you’re spending hundreds, even thousands of dollars a month on buying traffic, why not earn frequent flyer miles or cash back from that? I haven’t seen a good post about this topic yet, so I decided to write it.
There was a cool Mixergy interview with Max Teitelbaum of WhatRunsWhere, a competitive intelligence tool for online advertising. Before becoming a start-up founder, Max was an affiliate marketer. At one point in the interview, he talked about missing out on millions of dollars worth of U.S. miles.
What a huge missed opportunity! Affiliate marketers and online entrepreneurs spend a ton of money on buying traffic. They could garner free flights like clockwork. So I did some research on this.
The #1 Rule: Decide which airline you want to get miles for
Before I start recommending specific credit cards, it’s best to start with your own goals. Here are some questions to ask yourself before applying for a card.
- Where do you want to fly to? International, domestic or both?
- Which major airlines serve your city?
- Which airline do you want to collect miles with?
- Are you interested in getting perks from an airline, or do you want flexibility to use miles with different airlines, or do you want cash back?
The reason this last question is important is that there are several different types of frequent flyer credit cards.
The Different Types of Frequent Flyer Credit Cards
Airline credit cards give you perks for a specific airline. So if you want benefits like free checked baggage, complimentary upgrades to business and first-class, and things like that, get a card like this. However, you sacrifice the flexibility of using different airlines. You can check if the airline has airline partners that will accept your original airline’s miles. Any credit card that has an airline’s name on it is like this.
Travel Rewards credit cards give you points you can use with several airlines. You’ll have to check with each credit card to find out which airlines you can transfer their points to. Also pay attention to the “transfer ratio.” In most cases, it’s 1-to-1, i.e., one reward point can be exchanged into 1 airline mile. The great thing is you can transfer your points to a wider choice of airlines. However, you don’t get the airline perks.
Examples: Chase Sapphire Preferred, Chase Ink Bold, Chase Ink Plus, American Express Premier Rewards Gold, American Express Platinum.
Travel Cash Back credit cards work like regular cash back cards, except you only get cash back for travel expenses. They do not have agreements with airlines. Instead they just retroactively credit your account for travel expenses. A good example of this is the Capital One Venture Rewards card.
Best Credit Card for Buying Advertising: American Express Business Gold Rewards Card
I came up with the American Express Business Gold Rewards Card. Under the list of benefits, I saw this:
2x points on U.S. purchases for adverting in select media, shipping, and at gas stations.
Naturally, what caught my eyes was the ability to get double points on advertising spend. That’s what affiliate marketers do every day, they easily cycle through loads of cash in media buying. It’s their #1 biggest expense, and it’s recurring. So that could snowball into a boatload of frequent flyer points very quickly.
I dug around the Amex site for more details.
U.S. Advertising in Select Media
To earn additional rewards for advertising, purchases of online, television and radio advertising must be purchased in the U.S. directly from media providers in order to promote a business.
Examples of merchants that accept the Card and where you can earn additional rewards include:
- NBC National Broadcasting
- CBS Radio
*This is not a complete list.
You will NOT earn additional rewards for direct mail services including list/lead generation.
How do I earn additional rewards on advertising purchases?
To earn additional rewards for advertising purchases, the purchase must be for online, television and radio advertising in the U.S. in order to promote a business.
Another benefit of the card is bonus points on computer hardware, software and cloud computing. This is good if you buy new computers regularly.
Unfortunately, I only saw one web hosting company on the merchant list: Rackspace. It would have been great for web hosting to be a bonus category. That’s another expense of affiliate marketers and online entrepreneurs.
Only select Business Gold Rewards Cards
(Please call the number on the back of your Card for more information)
I wouldn’t wait until I got the card. Before even applying, I’d call American Express to make sure I got the gold card with the 2x bonus for purchasing advertising.
Fly United Airlines? Don’t Get American Express, Get Chase Instead
The other big con of American Express is if you plan to fly on United Airlines. Chase has a tight relationship with that airline. So if you want points that can transfer to United, you’re better off with the Chase Ink Bold card. It’s a charge card that earns 5x points on “office supply stores, and on cellular phone, landline, internet, and cable TV services.” Since it’s a charge card, you have to pay off your balance in full at the end of every month.
There is a credit card version called the Chase Ink Plus. Get this if you want to spread out your payments over time.
I think the Chase Ink Bold is the better choice since it’s a charge card with a flexible credit limit. If you strike gold with a winning campaign, you want to be able to ramp up your ad spending without having to worry about hitting the credit limit.
Want Maximum Choice of Airlines? Get Starwood Preferred Guest American Express
It’s ironic that a hotel credit card has the best choice of airlines. But the Starwood Preferred Guest American Express (available as personal and business credit cards) has agreements with the most airlines.
Here’s a full list of SPG airline partners.
Again, though, don’t use them for United Airlines. Stick with Chase for them.
Alternative for Cash Back: American Express Plum Business Card
This card got recommended in the WickedFire Internet marketing forums. The Plum Card has a unique killer feature: you can defer payments interest-free for up to 60 days. But you have to pay 10% of the current balance and the full balance from an earlier deferred payment.
Why is this great for affiliate marketers? Affiliate networks often pay out to affiliates monthly or on net30 terms. So an affiliate could buy traffic, but have to pay the credit card bill before they get paid by the network. This can lead to cash-flow problems. You might hit on a winning campaign, but be forced to pause it. You don’t want to get in too deep.
With the Plum card’s generous 60-day grace period, ideally you can buy traffic, then get paid by the affiliate network before the credit card bill is due. Your financial situation becomes a lot more scalable and you’ll be able to grow your campaigns faster.
It’s also a cash back card. You get 1.5% cash back if you pay the minimum balance within 10 days of the statement closing period.
What’s bad about this card? The 60-day deferred payment feature is the card’s best and worst feature. On the negative side, people who are irresponsible with money would be tempted to keep postponing payment, causing the balance to pile up with additional penalties and fees. Don’t do this.
On Nerd Wallet, a reviews site for credit cards, a user named John had this cautionary comment:
Warning about the Plum card for your Readers:
I just got the Plum Card and was made aware of something that the Customer Service Rep wasn’t aware of until I pressed the issue and he had to find out the answer from a supervisor:
The 1.5% is strictly applied to payments within the first 10 ten days after the monthly cycle closes. The caveat there is that payments made during the monthly cycle do not get the discount reward. That’s an important distinction that will not necessarily be clear to anyone reading about the card and I think you should know that. I now realize that if I pay “too early”, the discount doesn’t apply. I was very disappointed. AMEX charge cards may not have a preset limit but they do have limits based on spending patterns. If I have $5000 available and use that in the first week of the monthly cycle on unforeseen expenses with several auto-debits still to come, I need to pay down the balance quickly within a few days and thus NOT get the discount on that payment. The discount only applies to the ENDING BALANCE. Now, if you have a stratospheric limit on the card, it won’t matter. But for many small business owners juggling expenses and spending limits while trying to get maximum rewards, this can and will be a nuisance. Applicant beware.
The other downside is that the Plum card doesn’t have travel rewards, from what I can tell.
Last con: the Plum card annual fee is $250. That’s steep, considering most frequent flyer credit cards are around $100 a year. Still, for the ability to float your balance for 60 days interest-free, some would say the fee is totally worth it.
So my top recommendation would be to get either one of the Chase Ink credit cards, or a Starwood Preferred Guest American Express card. Good luck racking up the miles.