Advertisement by American Express

Brian Kelly, known globally as "The Points Guy," is an icon to people looking to squeeze the maximum value out of the rewards they earn through credit card loyalty programs.

We were able to catch up with Kelly to better understand how business owners can leverage credit cards to grow their businesses, build the best payment experience for their customers, and take advantage of this rewarding world themselves. Kelly offered up the following pieces of savvy advice:

1. Accept your customers' cards of choice.

This should be considered the Golden Rule for owners of businesses of any size. Many customers are very deliberate about the type of credit card they want to use for a particular purchase, especially when it comes to maximizing the points they earn or the benefits they receive with that specific card. If you don't accept their preferred card, you risk losing current and potential customers.

"Since credit cards are only as valuable as the places that accept them, business owners should do everything they can to let their customers pay the way they want to pay," Kelly says. "When you frustrate customers by not accepting their card of choice, you put yourself in danger of turning off that customer."

2. Put misconceptions behind you.

Many small business owners make the mistake of thinking they aren't big enough to accept certain credit cards from customers, or that American Express is always more expensive than competitors--but that's not true.

"If there's one thing that consumers want these days it's the ability to pay with the credit card of their choice. Whether it's points or purchase protections, consumers are smarter than ever when it comes time to use the card that works best for them," Kelly says. "Businesses have a lot of options when it comes to accepting payments, and today businesses can accept Amex cards through their credit card processor, just like they do for other credit cards. This means the third-party processor sets the rate, not Amex. And, because American Express customers tend to spend more annually on average, you could end up with higher returns by appealing to them. Extend the retail commandment 'the customer is always right' to payment methods, and your business will thank you."

3. Get the business card that best rewards your business model.

There's no such thing as the one perfect card for every type of business. When choosing the card for your business, try to match the areas where you spend the most with the card that rewards such spending.

"If you travel often for business, use a card that earns you miles as you spend, and get free flights for you and your employees," Kelly advises. "If you tend to spend a lot on office supplies or wireless costs, look for a card with a high bonus rate in those categories. If you spend a bunch on advertising, there are cards for that."

4. Take full advantage of your business card's features.

The right business credit card can help your business in myriad ways. Kelly offers up three ways the right card can work hard for you, your employees, and your bottom line.

  • Give yourself time and cash. The right business credit card can help with cash flow by giving you time to pay off your balance without accruing interest.
  • Use points as employee incentives. American Express has some great business credit cards that can earn rewards for the business items you spend on most. At The Points Guy, Kelly often uses points to give employees flights and gift cards to reward great work.
  • Build your business credit score by paying on time and keeping your credit utilization in check. This will open doors to inexpensive business lines of credit through your bank, better interest rates on other loans, and lower insurance premiums--saving your business money.

5. Be smart when using your business credit card.

Many businesses are launched and financed with a personal credit card. This can lead to major problems when business and personal cards are intermingled.

"Co-mingling your personal expenses with your business expenses is a pretty classic faux pas and can cause some real headaches at tax time," Kelly says. "Get yourself a business credit card, and don't put another business expense on your personal card again."

Besides separating expenses, Kelly says, opening a business card provides you some tangible benefits, like:

  • Helping you build your business credit score. You'll need a good score to win larger lines of credit as your business grows. Your vendors and potential customers may also look at your score to gauge the risk of doing business with you.
  • Protecting your personal credit if you can't pay off the credit card. If you fail to pay, you're still personally liable for the debt, but it won't impact your personal credit score.
  • Providing the ability to write off interest payments on your business taxes. Business expenses are generally tax deductible. To qualify as a business expense, the Internal Revenue Service says the purchase must be both ordinary and necessary.

In Conclusion

In an era when customers have many choices and high expectations from the companies they deal with, business owners need to make the entire buying experience as fast, efficient, and satisfying as possible. Creating roadblocks to paying, including not accepting the customer's credit card of choice, can potentially hurt sales and turn off customers. By accepting and utilizing credit cards in a smart way, small businesses can help boost sales, drive cash flow, and simplify accounting.