Credit Card WWYD?

[mrs.jacinthe]

Hi there!  Popping in from H&F and H&G for a CC question.

I have just become licensed as a real estate agent.  Here in CA, that means I'm an independent contractor (not sure if other states are the same, although I presume so).  So, for tax purposes, my expenses are deductible.  Instead of trying to keep track of gas and cell and other expenses individually, I was thinking that if I got a separate CC for just the real estate stuff, I would be better able to track those deductions - and possibly wind up with some rewards/miles/cash as well.  Win-win!

But I'm frozen on what is the best kind of card for this purpose.  I can't do an amex or discover, because some places around here don't take them and I don't want the complications involved with deductions on multiple cards.  I thought about getting a business card and was looking specifically at Bank of America Cash Rewards for Business, but I they need an annual sales number for their application, and I'm just getting started so I don't have that yet.  

So I'm leaning towards a personal card for now and then transitioning that over to a business card once I've got actual numbers to use in the application process.  Since I'll be using it for *only* business expenses, I figure the more modest "rewards" cards are probably my best bet, as I would guess I'll probably have about $1k in startup expenses (gas, cell, head shots, etc) in the first three months.  I do fly United regularly in order to visit my mother, and the United MileagePlus Explorer initial reward is 30,000 miles for $1k spent, which I think will work.  There's also the BankAmericard Travel Rewards card, which again does 20,000 points for the first $1k spent.  I'm torn about what to do here.  I will be paying the card off regularly, but possibly not every month at first, depending on how long it takes to close that first sale.

Any thoughts, better ideas, serious warnings, or other comments?

ETA: I am still working for my other job(s) as well, so I will have a steady source of income during those first few months.  I'm crazy, but not entirely stupid.  

[azalea]

I don't have specific advice, but a few comments:

Check the yearly fees. I have a Chase Freedom Visa card which is 1% cash back and no yearly fees. Citibank has a similar type of card. A lot of the airline credit cards and specialty cards have yearly fees.

We've done the United card before. It's a $95 (?) yearly fee that gets waived the first year. 30k miles is the standard offer. I've gotten 50k miles, plus a $50 statement credit before, so you may want to watch out for that deal if you decide to go with this card.

[orval]

I use a personal card for business only. I also have the Chase Freedom Visa - no annual fee. I still keep my gas receipts and mileage. I also have a business checking account that I pay the bills from. I am not an independent contractor , but it does make it easier to keep track of everything separately. I also have a personal bank acct. no fees for my business (DBA).

[livinitup]

There has to be something about American Express for business expenses because every single small business owner seems to use it - even though they are not accepted everywhere. DH has one and its a constant "Do you accept AE?".

Sorry if I'm not being helpful but there may be something to using Am Express that is worth re-investigating.

[littlemisssunshine]

I'm a REA and have a debit card that is connected to my business account. I use this account to deposit commission checks and then use the card for any business expenses. It's definitely easier to have it separate from my personal accounts.  I don't see the benefit of having a business card over just a personal credit card that is only used for business. I would just pick whatever personal CC best fits your life/reward wants. I would caution on spending a lot of money to start your business though. It's so easy to get caught up in overspending with the idea that you 'need' certain things. So many newbie REA spend thousands of dollars getting started to never see a return. I printed up some business cards for cheap at staples, and bought several personalized for sale signs and that was it. I had my husband take a head shot of my that actually looks better than the professional ones I had taken later.  Once I had some money coming in from RE, I started putting money into the business with some advertising. I quickly found out that print advertising is almost dead and was a waste of money. Spend your time on a good website and getting a good internet presence. I realized that an online presence and in person networking is the best way to get clients. I'd also explore other ways to make money in real estate with property management or BPOs. I would not go into debt over something that you don't even know if you want to do long term. It's hard work, you are working 24/7 even on vacation, and the pay is unpredictable. I've watched a deal that was going to pay a 12k commission fall apart because of the buyer was convinced the attic has ghosts and backed out of the sale. 

I make good money now, but it took several years to build it into something that would support me. And honestly, its only profitable because I mainly do property management.  I don't mean to be all doom and gloom, it's fun and pays well if you are good at networking and putting yourself out there to attract clients. It just takes a bit of time to get going! 
 

[mrs.jacinthe]

Nov 6, 2016 19:38:46 GMT -5 littlemisssunshine said:

I'm a REA and have a debit card that is connected to my business account. I use this account to deposit commission checks and then use the card for any business expenses. It's definitely easier to have it separate from my personal accounts.  I don't see the benefit of having a business card over just a personal credit card that is only used for business. I would just pick whatever personal CC best fits your life/reward wants. I would caution on spending a lot of money to start your business though. It's so easy to get caught up in overspending with the idea that you 'need' certain things. So many newbie REA spend thousands of dollars getting started to never see a return. I printed up some business cards for cheap at staples, and bought several personalized for sale signs and that was it. I had my husband take a head shot of my that actually looks better than the professional ones I had taken later.  Once I had some money coming in from RE, I started putting money into the business with some advertising. I quickly found out that print advertising is almost dead and was a waste of money. Spend your time on a good website and getting a good internet presence. I realized that an online presence and in person networking is the best way to get clients. I'd also explore other ways to make money in real estate with property management or BPOs. I would not go into debt over something that you don't even know if you want to do long term. It's hard work, you are working 24/7 even on vacation, and the pay is unpredictable. I've watched a deal that was going to pay a 12k commission fall apart because of the buyer was convinced the attic has ghosts and backed out of the sale. 

I make good money now, but it took several years to build it into something that would support me. And honestly, its only profitable because I mainly do property management.  I don't mean to be all doom and gloom, it's fun and pays well if you are good at networking and putting yourself out there to attract clients. It just takes a bit of time to get going! 
 

I am fortunate.  The brokerage I'll be working with covers business cards, signage, website, insurance, etc.  The amount I've budgeted (the $1k) is actually probably excessive, considering what I actually have to spend out of pocket, which is head shots (the entire brokerage uses the same photographer), joining NAR, a new cell (I need a separate number from my personal one, but I'm getting a ting phone for this), and whatever gas money is required.  

That said, I'm going into this eyes wide open.  I have a few things going for me - a great brokerage manager, a full-time job that will parlay into as many hours as I want as an independent contractor, a fantastic mentor realtor, and a relatively high COL (so commissions will be larger) with a reasonably steady market.  If I diversify, I plan on going into the relocation division.

[Mushe]

That sounds like a good idea! If you know United works for you, that would work, but I'd lean toward a card that can be used for all kinds of things. H doesn't have a business, but got a Chase Ink card. The good part is that it gets 5x at office stores and on utilities (including cell phone bills, internet, etc). It nets the same Ultimate Rewards points that the Sapphire does. I actually love the Sapphire, if the 5x on those categories doesn't excite you. It's 2x points on dining and travel, and we also always click through their portal for shopping, and usually get the extra points even if we use a different payment method.

UR can be transferred to partners like United, or you can book using their portal in an Expedia-like fashion, and use the cash value of the points to pay.