Smart business owners may never need to fly economy again!
Business Owners have a unique opportunity… they can accumulate points to fly very cheaply… like a pre-tax & deductable cost of $3,471 (plus taxes) for a return Business Class Qantas flight to Europe (or $5,131 plus taxes for first class return).
And that’s for a holiday… not for work !!!
Frequent Flyer programs have become so engrained into our society. They can be earned and spent in a multitude of ways. But many people waste great opportunities to really make points work for them. And business owners are in an amazing position to make the most of this opportunity.
But… it is hard to earn effective points, it’s hard to get good value on transfer, and it’s hard to redeem for meaningful rewards.
If you are content to pick up a free toaster or a bottle of wine every now and again, then this series of articles is not for you.
But for those business owners who like the thought of lots of free (and super cheap) international flights at the pointy end of the airplane, then it’s worth spending the time to understand the basic principles of where value lies and look at how you are structured!
Today… Part 1: Earning points effectively.
1.Points from flying.
The traditional way of picking up points.
If you fly a lot, especially with expensive tickets (business or first), you can earn a reasonable number of points. Yet Melbourne to London in Business Class will only earn you 20,150 points on Qantas.
It takes a lot of flying to accumulate a meaningful points balance. Not many people can earn a lot of points this way. But every bit helps.
If you are the CEO of a multinational and you fly to London every month, then you could (in theory) take your wife and yourself on a fun trip to the UK every other year, in the same class. But clearly, that’s a lot of time in the air.
2. Points from spending with the right suppliers.
This is in addition to credit card points.
You can earn points directly from the supplier of your groceries, fuel, hire car, hotel room, internet travel supplier, home loan, banking, health, and general insurance and so on. Some points go directly to your chosen airline (such as Qantas or Velocity) and some have their own program (particularly hotel chains or booking agencies).
Both options can be acceptable, especially if you can work out the value. For instance, Woolworths or Avis pass the points directly to Qantas (if this is how you have set it up) and you simply shop or rent like you always do. Points simply keep popping into your Qantas account. Not much effort and once set up, it just keeps happening.
Other companies want you to use their reward systems. Again, can be good. Hotels.com gives the average of 10 consecutive stays as a credit for your 11th stay. You can think of this as a 10% discount (if properly utilised). Hard to beat.
Accor and Hilton also have good reward programs. If you book through an agency (like Hotels.com), then the hotel reward is no longer available.
3. Your Business earns points when your staff fly.
This is a ‘no-brainer’. Literally set and forget.
As the business owner, you can join your business to Qantas Business Rewards program. You will be entitled to discounts on flights and points from airline partners and corporate credit cards. Those points can be allocated to whomever you choose. A nice benefit for someone.
Once you connect your ABN to your family and your staff QF frequent flyer numbers, then depending on your company’s status (based on usage), you can earn up to 40% of the points earned by your staff, in addition to the points they earn themselves.
This system stays in place indefinitely and can collect points on all the Qantas flying that they do… work related or private. You keep earning points.
4. Points from using a Credit Card
Time to concentrate.
Step 1. How many Airline points will I earn from using a particular card?
This is where homework makes a difference. Credit cards accumulate points into:
- the credit card provider’s own rewards program (banks, some Amex), or
- transfer directly into your chosen airline program (like many of the Velocity or Qantas cards issued directly through the airlines and through different financial institutions).
If the credit card provider has their own program, you need to understand how many ‘airline points’ (or benefits) you will ultimately earn when you transfer the points. If the card is issued by the airline, it is easy to work out the ratio.
On normal spending, the best Visa/Mastercard ‘earn ratio’ is $1 spend = 1 QF or Velocity point. But more commonly, $3 spend = 2 QF or Velocity point. Plenty are worse than that.
Step 2. What are you spending on?
Not all spending is the same. Spending on government bodies (such as ATO) earns fewer points (typically half) whereas spending on your airline may earn double.
Note also that most Visa’s and Mastercard’s have a monthly spending cap at around $5,000 to $10,000, after which the earn rate halves. That makes these cards hard to earn significant points for business spending. Amex cards usually have high or no spending caps.
Step 3. The Credit Card provider’s own reward programs.
Is it worth using the credit card provider’s own travel and rewards program? If it is hard to review the value of ultimate airline reward, you may have picked the wrong card.
Step 4. Look at the Bonus Points
From time to time, credit card providers offer sign up bonus points for joining, staying a year or two and spending the minimum spend. 80,000 to 250,000 ‘points’ is common. But of course, that may be before transferring to your airline.
Step 5. Visa/Mastercard or Amex?
You probably need both a Visa/Mastercard (as not everyone takes Amex) plus an Amex. Both cards have their advantages.
Step 6. Get a good Visa/Mastercard.
Best place to start is the airlines directly. See <Qantas Cards> and see <Velocity Cards>. These sites clearly show the airline points you will earn, the bonus points for signing, spending caps, their annual fees, the other perks (such as lounge invites, insurance, upgrades).
Recommendation?
Check <this card>. NAB Qantas Business Signature Visa Card.
- 200,000 QF points on signing/spending first $6,000.
- 2 QF points per $3 spent (including ATO).
- $50,000 payment cap every month.
- $295 annual fee. ACN or ABN required.
- Visa ‘Premium’ benefits.
- Read the T&C’s to check is this will work for you.
Step 7. Consider the right Amex card.
Those same airline sites also offer a good Amex card.
The Qantas Amex Ultimate Card (capped at 100,000 points pa) and the Amex Velocity Platinum Card (uncapped) are both good picks. Both earn 1.25 points per $1 everyday spend (but not the ATO). The annual $450 fee is matched by a $450 travel credit.
But if you could use the card for more business spending, then you might alternatively think about an Amex Platinum Card.
The Amex Platinum is arguably a great card but comes with a significant annual fee of $1450. No spending cap but earn rates need a bit of understanding. This is a program run by Amex, not the airline. The (ultimate) ratio for earning airline points is not that different to the Amex cards above, except that you can direct the points to 12 different airlines. Some airlines have great FF deals now. Different earn rates and conversion rates apply.
However, the Platinum card has lots of additional benefits including:
- a $450 travel credit, a $400 dining credit,
- Accor ‘Plus’ status & membership (one free night per year, half priced food, hotel lounge access),
- Avis and Hilton status,
- Centurion & Priority Pass lounge access,
- Free Prime membership,
- The Australian online subscription,
- Concierge, and travel & purchase insurance.
- 150,000 points sign on bonus (2 Amex pts is only 1 QF FF)
Worth checking this card out.
5. Check, check & recheck the details of any proposed cards or programs.
They change all the time and benefits come and go. This guide will become less and less accurate over time. In the time it took to write this article (a couple of weeks), many of the card deals had changed. Amex dumped their previous super sign on deal.
But in November 2024, this is reasonably accurate!
Next Time: Part 2:
Should you pay a fee to use your card? What about paying your tax with a credit card?