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Which credit card and which FF program for a newcomer?

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slodki

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Jan 3, 2005
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Hi,

Firstly i would like to say hi :) My first post here :)

Now onto my question. My brother and i are going to start up a business soon. Due to the nature of the business all the products we purchase must be done through a credit card. The reason for this is that we are sourcing the products internationally. So in reality, we wont really have any debt on the credit card as we will pay it off after each sale.

Now, i began to think. We would potentially be making purchases that equate to large sums of money, typically $100K or more after the business is starting to get going (well $100K is a lot for two 18 year olds trying to make a little more cash on the side..)

Now, im starting to think that we could use this to our advantage. Why not sign up to a FF program and try to earn some points?

Here is the problem. Being an 18 year old, all the FF stuff is new to me. Ive been doing a bit of reading, but im no where near close to grasping all there is to grasp about the FF programs. So this is where you come in :) I need some advice as to which credit card to go with (preferably the interest free days would be nice, etc.) and which FF program to sign up with.

Ive read about the changes occuring to the Qantas FF program, and im not to excited to join them to say the least. So any other options would be great to hear.

Like i said, im new to all this, so please explain what you mean. Eventually ill be able to grasp the concept. Also, in regards to destinations, i would mostly fly to Europe and America. Dont know if you need that info or not.

One last thing i presume is that for each dollar i spend on a credit card i get 1 frequent flyer point (or thereabouts). I presume i dont have to spend money at certain places to get points.


Sorry for the rant and thanks for your time :)

Jack
 

alien

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Hi Jack,

Welcome :)

You can visit here to see a comparison of cards: http://www.infochoice.com.au/banking/creditcards/default.asp

Some of the cards have min income so not sure how you would go with a business and how they work that out to say get a gold card. If I was to get a gold card (which I have) I would get the westpac gold altitude card with an amex card attached. Use the amex where you can as it earns 2 points per $ and the gold earns 1 point per $. However using altitude only gives you 1 QFF point per 2 Altitude points.

I'm in the process of working out whether switching to CBA Platinum is going to be better or not as you earn 1 point per $ but you transfer 1 point for 1 QFF which is better than the amex above.

That will get you started anyway. I will let some of the more experienced continue with an answer with what card you should get.
 

slodki

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Thanks for the link and the suggestion. Much appreciated :)

Keep 'em comming guys/gals :)
 

tucker

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Aug 13, 2004
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Hi Jack.

Sorry to spoil things for you, but I am a member of the Westpac Altitude FF program and noticed while reading my book of rules recently that any transactions used for business purposes are not valid to earn FF points. So I would not go for this program for a start.

I would also check this rule out with all the other programs, so you don't sign up for nothing. I know it's unfair, but just another way for them not to pay up.

You could, of course, try to get away with it and hope they don't check, but it might look obvious if there are a lot of supplier purchases.

Good luck,

Lara
 

slodki

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Jan 3, 2005
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Thats not what i wanted to hear...

So there is a possibility that this would be the case with all the credit cards?

What if i earned the points and transfered them to Qantas FF points. I know about the 2 points to one FF point conversion. After its converted they cant take the points away?

I guess i have to find a program that will allow me to make business purchases or try to get away with it somehow.

Thanks for the reply.
 

arun

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Sep 5, 2002
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I personally do not think this is a problem. That rule is to prevent people buying large amount of stuff. But if your purchases are going to be in the 100K region, it should not be a problem - how will they know if it is for business or personal reasons?
Anyway, do your own checks.
 

Mal

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Some cards have a cap as to how many points can be earned per year as well.

EG, if you spend $100000 you earn 100000 points, but if you then spent another $50000 on the card you wouldn't gain any more points.

This tends to be from the "low end" cards. Gold / Platinum tend to have less restrictions on points.
 

sxc

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Amex has some cards speficially for businesses, and they earn rewards points, but I think you need to prove business operation for a period of time.

check out their website and look under the business section.
 

johnsmith

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Dec 5, 2004
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It would be very unlikely that you would be approved for a business credit card. A personal card would be much easier to get, the likelyhood of the credit card company finding out that you are using the card for business is very slim. I would recommend that you get several credit cards and also some charge cards(These have no preset spending limit issues by AMEX and Diners Club) incase you don't have large enough limits on your credit cards, the last thing you want is for all your credit cards to be at there limit and you can't run your business. I have several cards myself and i switch between them depending on the amount of points earned from each supplier, some card companies have bonus partners that pay more than the 1 point per dollar. I have an Amex charge card, a Westpac Amex and a Citibank Mastercard for companies that don't accept Amex.
 

netaddict

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You'll find the Amex charge (personal) cards will allow you to earn points on business transactions.
 

markis10

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netaddict said:
You'll find the Amex charge (personal) cards will allow you to earn points on business transactions.
Not for stock, only services, and when you apply to be a merchant with amex you must specify what you sell, then every sale is recorded as stock or a service for FBT reasons etc. If you have an Amex business card they will say the same thing, you cannot buy stock, been in effect for the last two years as I used to get a million points a month unitl the change.
 

slodki

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Jan 3, 2005
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Thanks for the replies!

Much appreciated. Now im going to have to look at all the different cards, but it looks like the Amex is looking good.

One other question. If i spend say $500 on the credit card, and i pay it back the same day (either through post, some online payment etc.) how long till i will be able to see the $500 returned to my limit?

Yea, i noticed on some cards there is a restriction to the amount of points earned each month on certain cards. I'll have to investigate that further.

Keep em comming guys!

Regards,
Jack
 

serfty

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slodki said:
... If i spend say $500 on the credit card, and i pay it back the same day (either through post, some online payment etc.) how long till i will be able to see the $500 returned to my limit? ...
Normally if you pay using Bpay, Internet Transfer or over the counter at a Post Office (cash or eqiv.) before about 6pm the credit will appear the next working day.
 

johnsmith

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Dec 5, 2004
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The good thing about AMEX is that they credit the points to your account the next day after the purchase has occured, before you have even shelled out the money so you can use your points immediately. Other cards only update there system on a monthly basis.
 

NM

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Just be aware that if you earn lots of QF FF points from crrdit card transactions, and do not attain FF status through flying, you may find it more difficult to spend those points.

The recent changes to the QF FF program were targetted at rewarding those FF members who have attained Gold and Platinum FF status, and the only way to do that is through flying. Redeeming FF points for flight upgrades will be achieved based on FF status level prioritisation within a waitlisted queue. And redeeming QF FF points for free flights is much easier for Gold and Platinum FF status members due to more seat availability for those members.

It seems to me that Qantas has found they have lots of members with high points balances earned through processes other than flying. That is, there are a lot of members with no FF status that have high points balance. So they are rewarding their high status members with better availability (as they have been for several years) and now status-weighted prioritisation of upgrade waitlists.

I find this understandable since the FF scheme was designed as a loyalty program, and they are trying to reward their loyal customers rather than people with large credit card spends.

However, that does not preclude the fact the earning points from credit card transactions is perfectly within the rules and Qantas actually make a lot of money by selling FF points to the credit card companies.

I suggest you find a credit card that offers more than just FF points as part of its own loyalty program. Maintain the points in the CC program until you know what you want to spend them on. Only transfer the point out once you have found the award you want, be it free flights, flight upgrdeas, hotel accommodation, or merchandise.

Amex is a great program for points flexibility, with several FF program transfer as well as hotel and other loyalty program transfers available. I also find Amex have one of the lower international exchange rates around.

Make sure you are aware of how you chosen CC operates. Some (like Amex) convert all foreign currency transactions first into US$ and then to A$, so you can lose out on some non-US$ currency transactions, but their US$ rates are usually good. Some hit you big time with interest for several months if you miss one monthly balance payment - read the fine print.
 
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