Common Mistakes Businesses Make When Choosing Travel Credit Cards

For small business owners, the right travel credit card can help you manage your expenses, earn rewards, and access travel protections that would otherwise cost you extra. 

Choosing the wrong card can result in real losses in the form of unredeemed rewards and unused benefits. When comparing business travel credit cards, here are some of the top mistakes to avoid. 

Ignoring your spending patterns 

Before you decide on a travel credit card, audit the last three months of your business expenses to get a real idea of your spending habits. Whether it’s gas, flights, hotels, meals, or rental cars, identifying your top spending categories can help you find the best travel credit card. It’s a common mistake for business owners to choose a card that doesn’t align with their top business expenses, resulting in missed opportunities for rewards and savings.

Not matching your card to how you travel 

Take a closer look at how you travel for business. Is most of your travel national or international? How often do you travel, once a quarter or weekly? Do you like to fly with the same airline or stay at the same hotel chain? Or do you prefer more flexibility? The answers to these questions can help you find a card with travel benefits that align with your real business travel habits. 

Failing to review qualification requirements  

Before spending time comparing card perks and earn rates, confirm the eligibility requirements for the card you’re considering. Many Canadian business travel credit cards have minimum income and credit score requirements. Remember, each time you apply for credit, it triggers a hard credit inquiry. If you apply and don’t qualify, you may still see a short-term dip in your credit score, which matters if you’re trying to apply for other financing, like a business loan or line of credit. 

Focusing on the welcome bonus

Everyone loves a good welcome bonus, but many people get too focused on the initial sign-up offer. Sure, it’s a great perk, but it’s important to dig deeper. Before you commit, compare the bonus value against the annual fee. Also, consider the spend requirement. If you have to spend $10,000 in the first three months, ask yourself if it’s reasonable. You only get one welcome bonus, so it’s important to look at the ongoing earn rate, since this is where you will get more value over the long term. 

Being scared off by the annual fee

You don’t want to skip over a business travel credit card just because it charges a higher annual fee. Premium cards typically come with higher fees but also offer more rewards and benefits, such as accelerated earnings, access to airport lounges, and comprehensive travel insurance. If you regularly use the perks offered by your card, your earnings may quickly outweigh the cost of the card. To see if the card is worth it for you, perform a quick calculation by comparing the annual fee to potential savings.

Not understanding the card benefits

Before you choose a credit card, review the benefits guide to familiarize yourself with all of the available rewards and perks and how to make the most of them. If you don’t understand your card benefits, you’ll end up paying for perks that you never use. You also run the risk of duplicating coverage if you purchase standalone travel insurance because you didn’t realize your travel credit card includes it. 

Forgetting about employee card management

Before you hand out travel credit cards to your employees, make sure you have the ability to monitor spending, set individual spend limits, and consolidate all of the statements so you only have to make one monthly payment. Forgetting to assess employee card features can result in unauthorized and out-of-policy purchases, plus hours of manual paperwork to reconcile all the expenses.

Combining business and personal expenses

While it might seem easier to use your travel credit card for business and personal expenses, this can cause confusion and added complication, especially at tax time. Having a separate card for your business makes it easier to track your expenses, allows you to build a separate business credit profile, and business cards typically come with a higher credit limit, which can provide more cash flow flexibility.  

The right card makes all the difference

As a small business owner, you want a travel credit card that makes your work life easier and streamlines operations. Understanding the common mistakes business owners make when choosing a card can help you avoid frustrations and hiccups. Before you apply for a credit card, audit your expenses, review the card details, and make sure you understand all of the card’s benefits so you can maximize your spending.