It is often neglected for most people that Bonuses offered with credit cards can preserve precious cash for required expenditures.
Cheryl Moore has always been a saver. “I enjoy saving money like other people enjoy spending it,” she says. In the consumer world this attitude translates into shopping the ads for discounts, coupon clipping, and eating dinner before 5:00 PM to take advantage of restaurants’ early-bird specials. In the business world, this philosophy means getting someone else to pay for essentials.
Cheryl owns Something Moore, a women’s clothing and accessories store in Laguna Niguel, California. She pays for business expenses and for inventory with a credit card that awards frequent flier miles. And then she uses those frequent flier miles for airline tickets to take buying trips for her store.
“Years ago manufacturers would offer terms like 30 days net [to pay invoices],” Cheryl says. “Now more and more of them want their money right away. Using a credit card allows me to do that, and I still get something of value out of it.”
She flies to New York three times a year, to Dallas twice a year, and occasionally to Atlanta for shows of the latest merchandise, a necessity for a women’s clothing store. She estimates that frequent flier miles save her $1,200 to $1,300 in airline tickets annually. For an independent retailer, such savings are vital.
“In my business, I buy so much—$10,000 a month—that I can get a free ticket every four or five months,” Cheryl says. “I don’t always use my frequent flier miles for my flights. Sometimes the airlines offer such low fares that I will go ahead and take advantage of that bargain. I don’t like to use 20,000 frequent flier points for a low-price ticket. I use them for the more expensive flights, so that I get more out of the transaction.”
Rules for cashing in frequent flier miles typically require a reservation at least a month before traveling, but that’s no problem for Cheryl because the show dates are announced far in advance.
Cheryl made a deliberate decision to obtain and use a credit card that awarded frequent flier miles. When the one she was using stopped this particular benefit, Cheryl looked for another. She also chose a credit card issued by a major bank, rather than a card from one airline, so that she could use her frequent flier miles with any carrier, which increased the flexibility of her schedule and choice of airport, which is important in a metropolitan area like Southern California, which has more than six airports.
Cheryl only used her credit cards for inventory at her store, but she has business friends who put every company expense, even their taxes, on the credit card that awards frequent flier miles. Cheryl thinks that’s a bad idea because government taxing agencies charge a fee.
Although Cheryl buys on credit from many different suppliers, she is cautious about giving her credit card number out, especially at trade shows. “The [manufacturers'] reps carry all their orders in their luggage. If that gets stolen, so does my credit card number, and identity theft is always a concern,” she explains. “If I’m at a show and they take credit cards, I tell them to call me when they’re ready to ship and I give them the number at that time.” Her suppliers are satisfied with that arrangement and Cheryl gets both identity protection and bonus miles from the purchases.