Ep. #35 - Credit Card Points Hacking... Your Rental Properties Can Allow You To Travel For FREE!

I've done a lot of traveling recently... Want to know how my Rental Properties (and other businesses) allow me to fly almost entirely for FREE? You should, because you can also!

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Intro...

Welcome to Episode #35 - Credit Card Points Hacking… Your Rental Properties Can Allow You To Travel For FREE!

Now I'm relating this topic to my Rental Property Business; however, everything I'm going to say here relates just as well to ANY business you may choose to start - that will have some type of (and amount of) monthly expenses. And I also benefit here from having more than one business.

Regardless of your business, free travel starts with getting a business points credit card - and some are better than others. But you may thinks its hard to impossible to get business credit - especially early on... It's not really! It just requires a little time and focused effort. Certain steps when undertaken correctly will make it easier than you may think to get business credit established for your new business endeavor.

Now if your personal credit sucks, then you'll have some work to do in that regard before likely being able to get credit established for your business - but its not impossible even then. But like I said, the ticket to free flying is to get a point credit card for your business. You can even start by getting a points credit card in your personal name, but using that card exclusively for business purposes. Now DON'T mix business and personal expenses on the same card, even if its in your personal name - and certainly don't put personal expenses on your business card.

Either way - business points credit card; or personal points credit card used exclusively for business... You want to put EVERY legitimate business expense that you can onto this card each month. EVERYTHING... If it can be paid by credit card, then that is how you should be paying for it, and always on a card that generates points each month based on the transaction volume for that month.

Now if you're among the debt adverse (those who believe all debt is bad debt), then this may sound risky or outright foolishness to rack up a credit card balance each month. But just like you were going to pay your bills in full for the month, you will also be paying this credit card in full - just in the following month. No more or less money goes out, but instead of paying your bills directly, you will instead charge those bills to the points card, and then pay that SAME MONEY to the credit card in the following month. Be disciplined about this, because if you fail to pay the card off in full, then you are going to get hit with interest charges - which defeats the entire purpose of this endeavor. So if you are not financially disciplined, or don't think you can be in this - then stop listening to this episode and I'll have another show for you coming later.

But for those who can be disciplined, you're just putting the credit card temporarily in the middle of financial transactions that were going to happen anyway, at the same times, and for the same amounts. And you just put that money aside for an additional month, and pay it to the credit card in the following month when you get the bill.

But for doing so, that credit card is going to reward you with POINTS. Points you can use in some cases for many different things, but I like to stack points for FREE travel. Now as I mentioned, some cards are better than others. For example, I have a "Miles" card that whenever I try to redeem the points for a flight, they require me to pay some amount of real money in addition to some amount of my points. And that sucks... so I've yet to use those points and will likely end up cancelling that card.

But my favorite cards allow me to pay entirely in points... I don't even have to come out of pocket for taxes or anything! That's my American Express Cards. Now these cards can be expensive... I believe the American Express Platinum Card is something like $550 per year; and I think the AMEX Gold Card has an annual membership fee of like $250. So you have to make sure it's worth it for YOU , but these cards also have a ton of additional benefits that for ME, make it well worth the cost.

For instance, my latest trip, I didn't need any of the rental car add-on's (that jack-up the daily cost), because my AMEX Platinum Card covers everything. It also paid for my Global Entry and TSA Pre-Check fee.

So each month I charge all my business expenses to a points credit card - or at least those that can be paid with a credit card without incurring an additional fee from the merchant or vendor. Because some vendors may charge an additional fee of something like 3% to pay with a card. I don't do it in those case, but for all others, I pay with a points credit card whenever and wherever I can.

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For a Rental Property Business, expenses paid by credit card can include many things, such as: Insurance; Power; Water; Security Systems; certain Repairs, Maintenance, Cleaning; Lawn-care; Internet; Cable or Satellite; and on... especially in the case of multi-family Rental Properties.

You certainly want to keep your expenses to a minimum - but where you'll have them regardless, try to pay them with a points credit card. The end result will be points accumulated each month so that you can later redeem for FREE travel. And setup any that are reoccurring each month on auto-pay, so that is one less thing you need to thing about.

So each of my businesses have certain expenses that I pay by credit card for this reason. And like I said, some expenses are monthly re-occurring, and I just set them up on auto-pay; others I pay manually with a points card as they occur. Now granted, my Web Hosting Business (ViUX.com) has the highest monthly re-occurring expenses paid by credit card, so it generates the largest amount of points for me each month, but that doesn't change the power of using my Rental Property expenses to also earn FREE travel points.

Turn expenses that you were going to have ANYWAY - into YET ANOTHER way that Rental Real Estate Investing both creates income and makes you wealthy (both financially and in experiences). Because how much more likely are you to travel, when your airfare is FREE!?

I've been on at least a dozen flights so far this year, and I've yet to pay anything for airfare. Twice I paid for upgrades to get more legroom on longer flights and twice I had too much junk to get home or had done a poor job at packing, so got hit with checked bag fees (I hate those fees). But my card even reimbursed me for those, because it was on my pre-designated airline. And in some cases being a holder of certain airline cards gets you a free checked bag and priority boarding. You can even work it so that your hotel and rental car are paid with points. And with regard to the pre-designated airline, some of my bookings on that airline credit me back for up to 35% of the points spent!

So I can use points to book flights on the pre-designated airline (in my case Delta), and they may give back 35% of the points so that I can use them again. Its almost hard to believe... If you have a business (having Rental Properties is a business) and you're paying anything for airfare when you travel, then you're doing it wrong!

And since it's free, I could upgrade to Business or First Class, but even with points, I'm cheap - so I'm right back there in coach. Because a $500 ticket is 50,000 points, so I can't justify paying 2 or 3 times as much just to sit nearer to the front of the plane - even when using points. If I do that, I'll start running out of points and end up having to pay with money like everyone else. Although I may splurge for First class for our 20th anniversary next year if my wife and I are on another really long flight (like the 13 hour flight we had to Dubai in August). Maybe we'll go to Europe or to Japan for the Olympics - First Class for FREE with points!

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So my purpose for this episode is NOT just to make you aware of the concept of paying for business expenses with a points credit cards to get free travel. It's also to get you thinking differently about debt and credit cards in general. So I must go back first to something I mentioned earlier to learn what type of person YOU are.

Again, if you cannot be disciplined to pay off the card in full each month that you used for this tactic - then I told you to stop listening to this episode several minutes ago. So don't say I told you to run up a bunch of debt and ruined your business, killed your credit and whatever. I didn't do that... That's on YOU!

But for those of you still listening who CAN be disciplined enough to handle this properly - NOT doing this, is giving up a potential profit center for your business. Further, as you practice this, you'll start getting higher and higher credit limits - which will aid in your having an increased opportunities for your business.

And as your limits increase, it may also result in higher credit scores for you if using a personal points card exclusively for business expenses; or if using a business points card for which you are the personal guarantor - and it thereby appears on your personal credit reports for that reason. And having higher credit scores (up to anything above 740) will get you better rates on your cards (both business and personal) - but also better rates on your Rental Property Mortgages.

Do you follow what I'm saying? Having one or more points credit cards with high available limits that you use for business expenses and pay in full each month, will not only generate lots of points that you can use for FREE travel - but it will also aid in getting the best rates and terms on mortgage refi's and purchases of additional Rental Properties. So this practice stands to make and save you money in multiple ways!

And even if you charge thousands to such cards each month, as long as you pay them in full, your reported balance on your credit report will be low to none - so you can even avoid impacting your Debt-To-Income-Ratio. To this end, I make note of when each card updates on my credit reports, and I make sure to auto-pay the balance in full prior to that date each month. And then I schedule my reoccurring business expenses via auto-pay with each vendor to hit the card after that date. As result, my credit card balance shows as ZERO on my reports, because the balance goes up and back down again prior to reporting each month.

I'm leveraging the points credit cards to auto-pay my bills and increase my credit scores while getting FREE travel points in the process. Now like I said, American Express is my favorite points card, but be aware that some AMEX Cards don't allow you to carry a balance anyway, so those don't work as well for the credit report and credit score hacking - since they don't report the same. But other cards, including some from American Express do report your balance and credit limit, and also generate points. In fact, if you have multiple AMEX Cards, they all generate points to the same bucket - so it works very well to have multiple - each with different features and benefits.

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OK, so that's it for today... Put a plan in place as to how you're going to STOP paying for airfare and travel for FREE. If you're a business owner with significant monthly expenses, you should NOT be paying to fly anywhere. The only exception to that is if you have need for frequent travel and your business expenses just aren't high enough each month to generate sufficient points to account for your volume of travel.

For example, if your business expenses are $5,000 per month and all $5K can be paid by credit card; then you may only generate 5,000 points per month. And it might then take you 10 months to generate 50,000 points, which is a $500 ticket - which may not seem like anything to scream about. But as your business grows, so will your expenses. What do you think the credit card payable monthly expenses would be on a 20 unit apartment building?

Also, some cards have double and triple point promotions for certain categories. You may want to use one card for gas and another for dinning out if they offer bonus points for those categories. Also, many cards provide bonus points for just signing up - which can be high enough in some cases for a free flight. You can also get bonus points by referring friends and family to sign-up for a card using your referral link. Oh, so let me know if you want to apply for a points card so that I can send you my referral link for that card.

I'm at the point with my businesses that I'm generating significant points each month. Yes, that means that I've got a lot of expenses, but I'm also profitable. If you're profitable and your expenses have been optimized to their lowest possible level, certainly you should be benefiting from those legitimate expenses to travel for free and potentially increase your credit scores in the process.

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Outro...

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