Harris KhanFor many consultants, it’s easy to rack up big bills on travel and dining. But a credit card that offers rewards in such categories can help with savings. Many cards also offer solid flat-rate rewards on all purchases, which can benefit consultants with varied spend categories.
But the right card is only useful if you know how to use it. So let’s examine how to make the most of your rewards, while avoiding common pitfalls.
Selecting Cards
Before we go any further, it is important to select the right cards.
Some people don’t even bother with credit cards, and instead just pay on a debit card. That’s fine, but it typically comes with both an annual fee and foreign transaction fee.
For consultants who spend a lot overseas and order a lot of personal items online, a credit card makes sense.
This is especially true for travel rewards cards that offer good value. The competition for those cards is fierce, and so the annual fee is often waived.
A free card with no annual fee is much easier to use for consultants who travel frequently and spend a lot on entertainment.
If you want to use a debit card, it would have to be a Visa or Mastercard because American Express is not accepted at many restaurants or entertainment venues.
American Express is also not accepted by many foreign merchants or shipping companies. If you are a frequent flier or cruise traveller in Canada or abroad, you’ll definitely want a card that is widely accepted, and that means Credit or Debit.
Make sure your travel rewards card is an all-purpose travel card, and not a conventional travel rewards card. The latter offers up to 2 per cent value in reward miles—which doesn’t amount to much when airlines start charging $25 per bag, $100 for a checked bag, and $200 to change your itinerary.
Make sure the rewards card you choose will allow you to use the points for travel paid for through the card.
It is important to either choose no annual fees or no foreign transactions fees. Global acceptance and reward values are great in today’s world, but you’ll be paying a lot in fees if you use a rewards card.
If you don’t want a rewards card, good alternatives include a real Visa or Mastercard with no annual fees.
Travel rewards cards offer great, no-fee cards with rewards. They also typically offer an introductory period of uncapped rewards, so they can be a big win for some frequent travellers.
Avoid Mistakes
Many consultants don’t really know how to use a credit card…or to properly manage their credit card spending.
The truth is that credit cards are a great convenience, but also a terrible risk, if used incorrectly.
To understand credit cards, you have to understand the concept of “rewards” cards.
American Express offers a card that earns points that can be used on flights with Air Canada, Westjet, and others. So does Capital One Miles.
Each of those cards offers $25 back after your first card transaction. If you don’t use it again for 15 months, you’re left with some very valuable points. At a time when it’s about $11,000 to fly roundtrip from Toronto to Vancouver, 15,000 points might be enough to put you in British Columbia.
But the average spender will typically use up those points…and then spend $50,000 over the next 15 months on regular spending.
So those 15,000 points are a $50 cash bonus 2.5 per cent reward for 15 months, followed by another 15,000 bonus points if you don’t use the card again.
But the average spender is not likely to use the points for the entire 15 months. In fact, they’re more likely to use the points up through regular spending and then max out the card using a big purchase or two.
You can see how someone might spend $50,000 on this card and get a jumbo cash bonus of $50. Plus, they’ve got a nice little jiffy with no annual fee. The credit card company collects well over $300 in interest during the 15 months to make up for the $50 signing bonus.
But if you instead pay off the balance in full each month, your interest rate goes to 0.
That means you’re not carrying a balance from month to month. And you’ve got $50 in points, and an additional $50 in cash in your pocket. Another option might be to use the card, but pay it off with cash in full, or with another credit card.
But use the card only for convenience and only for expenses where you can’t use cash.
The problem with making mistakes is that they can really screw up your credit.
Always pay the balance in full every month on your credit card. Otherwise you’re going to pay a lot in interest—and the interest will eat up a lot of the rewards.
Learn to use your credit card, and use it for convenience in cases where you’d otherwise use cash or debit.
Avoid making dumb mistakes with the card, and you can be earning rewards on just about everything you buy.
Top 20 Cards for Consulting Cash Back
My favourite cards are the ones offering income-replacement bonuses.
But credit cards and consulting are two different things. A rewards card is an exception – you’re likely to use a rewards card often.
The reason I often recommend the no annual fee Visa and Mastercard cards is value.
I make a lot of purchases with debit, and my American Express has an annual fee. I also spend a fair amount abroad.
It’s just the way I do business.
I find it well worth paying a small annual fee for the Visa or Mastercard that has no fee for foreign transactions.
- American Express Gold
The Amex Gold card allows you to receive up to 3 rewards per $1 spent, which buys roundtrip tickets to destinations like Dubai and Hong Kong.
It’s best suited to frequent flyers who need lots of travel reward points, or for those who are not afraid to travel abroad.
You’ll get the first 40,000 reward points when you charge $1,500 to your card in your first 3 months.
The $200 travel credits you receive each year are good for the following:
$25 for a round-trip short-haul flight booking made with your Air Canada Aeroplan number. The cost is only $25 if you book your flights using a third-party travel website.
$25 for any travel booking made with the Amex Travel office.
$50 for any cash-back transaction within the travel category.
Plus you get a $50 annual membership fee credit.
The Amex Gold comes with a $120 annual fee. But if you’re a big spender and spend $15,000 annually, and use the travel booking and flight discounts, you’re likely to benefit from the card.
- AMEX Premier Rewards
The AMEX Premier Rewards Gold Card is similar to the Gold card. You get very similar rewards, but you get two points for every $1 spent on travel and gas.
The $100 annual travel credit is also a bit more flexible than the travel credit of the Gold card, because the Premier Rewards Gold allows you to apply this credit to many different travel purchases.
The Gold card offers travel credits for flights, cruises, vacation packages, and extras related to your stay, like airport transfers.
The Premier Rewards Gold card doesn’t include extras, but allows you to apply the credit to purchases made directly through the air or hotel companies, or to other travel-related purchases like travel agents.
You’ll receive 40,000 points as long as you spend $1,000 within the first 3 months.
- Capital One Aspire Travel
This card is among the cheapest for travellers, but with a premium for frequent flyers.
Capital One does offer a no-annual-fee version of the card, but the other version is aimed squarely at travellers.
With the no annual fee version you’ll get 10,000 bonus miles when you sign up for the card.
You’ll also get a free supplementary card that does not have an annual fee, and you’ll get 1.25 miles for every $1 you spend on travel and dining.
But with the premium version of the card, they add a 25,000 miles welcome bonus, and a 2 per cent rebate on every dollar you spend on travel or dining.
And you’ll get an annual travel credit of $120, which breaks down as follows:
50,000 miles if you spend $15,000 on the card annually,
3,900 miles if you spend $15,000 on the card annually, and
$120 in cash refunds if you spend $15,000 on the card annually.
This card looks like a great deal for frequent travelers who spend $15,000 with the card annually.
- Chase Sapphire Preferred Card
This is one of my favourite travel cards for those who want to earn rewards with every dollar they spend.
With this card you earn double the rewards on dining and travel.
plus 1.25 points for every $1 you spend on all other purchases.
The card also provides you with 50,000 points if you spend $4,000 within 3 months of opening your account.
You’ll also get 3 points for every $1 spent on travel expenses, and 1 point per $1 spent on other items.
If the points seem confusing to you, it’s really quite simple.
You’ll get 1.25 points for every $1 you spend on regular purchases, but 2 points for every $1 you spend on travel and dining.
If you spend $12,000 every year, and have your regular purchases on that $12,000, you’ll get 7,000 points just from regular purchases. You’ll get 3,000 points for the $3,000 in travel and dining purchases, which you’ll multiply by 2 points to get 6,000 points for that $3,000 in travel and dining purchases.
You’ll get 30,000 bonus points if you spend a total of $4,000 in the first 3 months.
The points can be worth $450 if you use the card for travel.
The card also offers a $100 annual travel credit and a $400 annual travel credit.
It’s a great card for those who want to earn points and miles on everything they buy, and it’s a great card for travel purchases.
My friend applies the points she gets from the card to the air fare for her latest trip, so she earns points for a flight she was already buying.
- RBC Visa
RBC Visa is one of the best cards for those who like a simple and straightforward credit card and generous rewards.
You’ll earn 1 point per $1 spent on regular purchases and 2 points per $1 spent on RBC Touch Banking.
You’ll get a bonus of 25,000 points when you spend $500 on the card in the first 3 months.
You’ll also get $120 in reward money each year, and it’s applied to regular spending – it’s not for travel or dining.
It’s the best card you can apply for if you want to earn rewards with every dollar you spend, but you don’t want to sign up for a complicated or difficult card.
- CIBC Aventura
Like the RBC Visa mentioned above, the CIBC Aventura card lets you get 1 point for every $1 spent on regular purchases, and 2 points for every $1 spent on gas, groceries, travel, and entertainment.
Daily Purchases also earn you 2 points for every $1 spent.
You’ll get a bonus of 25,000 points when you spend $1,000 in the first 3 months.
You’ll also get 10 per cent off all flights with Aventura Rewards.
You can use Aventura points to pay for hotels at their retail value – 1 Aventura Point is worth $1.25 in Canada, and 1.6 Avion point is worth 1 American cent.
You can get up to $50 in cash back, and there’s a $120 travel bonus – you can also add an authorized user for no charge and keep the mileage bonus for yourself.
- CIBC Aerogold
The CIBC Aerogold credit card is similar to the Aerogold Visa, which charges an annual fee of $120.
The Aerogold Card offers a 10,000 Aeroplan Miles welcome bonus as long as you spend $1,000 in the first 3 months.
You’ll also get 5,000 Aeroplan Miles for every $20,000 you spend on the card annually.
The card also gives you an Annual Travel Credit of $100, and a complimentary first checked bag on Air Canada flights when it’s available.
Even though this card has a higher annual fee, you’ll have more benefits if you’re a frequent Air Canada traveler.
You’ll earn one Aeroplan mile for every dollar spent, while the cardholder keeps 100% of the Aeroplan Miles collected.
There’s also an additional Aeroplan Miles bonus for Air Canada purchases.
This card isn’t ideal, but it’s a good deal for frequent Air Canada travelers.
- BMO Air Miles Mastercard
The BMO Air Miles Classic Mastercard offers the highest reward value of any credit card.
It offers 1 Air Mile per $10, which works out to a 1.25% return on your spending.
You will also get a one-time bonus of 15,000 Air Miles when you spend $500 on the card.
You’ll also get a $100 annual air travel credit that you can use towards travel expenses.
It’s a decent offer, but it’s not the best out there. If you travel often, you’ll benefit from getting the BMO AIR MILES World Mastercard, which offers 2 miles for every $10 spent, for a return of 1.25%, which is better.
- CIBC Aerogold Visa
The CIBC Aerogold Visa is a decent option for those who use the card for travel and dining, because it offers 2 miles for every $1 spent on those two categories.
The card also offers 1 mile for every $1 spent on all other purchases.
The card also comes with $120 in annual travel credits and a 15,000 mile welcome bonus.
It’s a simple-to-use card for big spenders who want to earn miles for their rewards.
- TD Gold Elite Visa
The TD Gold Elite Visa earns you 1 extra mile for every $1 you spend, which gives you a 2.313% return on your spend.
When you redeem your reward miles, you’ll get 1.5 cents towards travel purchases with the airline of your choice – you can only use the miles you earned with this card, when you’re spending on their flights.
For example, if you have 30,000 miles, and you have a flight for $400 with a special deal that gives you 25,000 miles in travel credits, you’ll end up paying for your flight with it.
You can also redeem them through their travel partners, such as Expedia, and you can redeem them for cash if you want.
The card does have a $60 annual fee, but redeeming your miles for 2.5 cents each is a great deal.
If you’re the type of person who likes to earn the least amount of cash back possible on everything they buy, then this card is a decent option.
If you spend over $60,000 on the card every year, then you’ll earn your next year’s annual fee for free.
- CIBC Aventura Gold
The Aventura Gold Mastercard is similar to the Aventura Visa and the Aventura Mastercard, but it has a smaller annual fee of $30, and the points are 1.25% versus 1.5%, giving you a 1.875% return on your spending.
If you have the card, you’ll get 12 months of no interest, and if you pay your balance off in full every month, then you’ll get a 0% annual interest rate on balance transfers for 12 months, too.
The card offers you a 30,000 mile signing bonus.
You can get the card if you spend $1,000 on it in the first 3 months of signing up.
It’s a good option if you want to earn travel rewards, but you’re not interested in big purchases.
- CIBC Aerogold Visa Infinite
The CIBC Aerogold Visa Infinite earns you more miles than the other two Aerogold Visa cards, and it’s a good option for those who want to earn more points with every purchase.
It earns you 2 miles for every dollar spent on gas, grocery, and restaurant purchases, for a return of 1.25%.
It’s a good option if you want to earn more, but at the end of the day, your return is not going to be as good as the TD Gold Elite Visa.
- Indigo Popular Plus Mastercard
The Indigo brand is a popular credit card option, and it does a good job of targeting Canadians who spend a lot of time shopping at Indigo, usually for $200 and up per purchase.
The card earns you 2 points per $1 spent on Indigo purchases.
Another perk is that you’ll earn 4 points per $1 in Indigo hotel purchases, and 1 point per $1 on all other purchases.
If you spend $1,000 in the first 3 months of having the card, then you’ll get an extra 10,000 points.
This card has a great rewards program, but a low minimum purchase and an annual fee of $39 that’s waived the first year means that you likely won’t be getting as much cash back as you would with a different card.
The card does have more perks, but at the end of the day, it isn’t a great option for anybody, and it’s more of a bonus for Indigo cardholders who prefer to shop there a lot.
- American Express Cobalt
The American Express Cobalt is a good credit card for those who want more benefits than they can get from any other card.
It offers a better rewards program than the American Express Platinum card, because it offers 1.25 points for every $1 spent on regular spending, and 2 points for every $1 spent on dining, grocery, and entertainment spending.
You’ll also get a welcome bonus of 15,000 points when you spend $1,000 in the first 3 months of signing up.
Another good perk is that you’ll get a $100 annual travel credit that you can apply towards travel expenses.
It’s a decent option for those who want to earn travel rewards, but they’re not interested in big, expensive purchases.
- Le Chateau Mastercard
The Le Chateau Mastercard is an okay option for Le Chateau clothing shoppers.
It earns you 1 point per $1 spent, and you’ll get a welcome bonus of 5,000 points when you spend $245 in the first 3 months of signing up.
It’s good for people who shop a lot at Le Chateau and are interested in a simple rewards program.
- Aventura Card from Tangerine
The Aventura card from Tangerine is a good credit card for those who want more out of their rewards cards, because it offers 1.5 points for every $1 spent on regular spending, and 2.5 points for every $1 spent at grocery stores, drug stores, gas stations, restaurants, and bars, for a return of 2%.
You’ll also get a welcome bonus of 15,000 points with this card.
The card also comes with a $120 annual travel credit, but it is offered on a purchase of $120, and you can’t use it on upgrades or Aventura points.
This is a good option for those who want to earn as much in rewards as possible.
- Bank of Nova Scotia Slate
The Bank of Nova Scotia Slate is a decent card for regular spenders who want to earn more rewards, because it offers 3 points for every $1 spent on regular spending, and 1.5 points for every $1 spent on travel purchases.
You’ll also get a welcome bonus of 25,000 points when you spend $1,000 in the first 3 months of having the card.
It’s a good option for people who want to earn rewards very quickly, but aren’t interested in big purchases.
- Gold Elite Mastercard from Capital One
The Gold Elite Mastercard from Capital One is a decent card for people who want the highest end of the rewards spectrum, because it offers 1.25 miles for every $1 you spend.
You’ll also get a welcome bonus of 40,000 reward miles when you spend $3,000 in the first 3 months of having the card.
It’s a great option if you want to earn more rewards, but aren’t interested in big purchases.
- RBC British Airways Visa Infinite
The RBC British Airways Visa Infinite is a good card for those who want to maximize the number of miles that they receive, because it offers 2 miles for every $1 spent.
You’ll also get a welcome bonus of 60,000 miles when you spend $3,000 in the first 3 months of having the card.
It’s a good option for those who want to earn as many rewards as possible, who are willing to make some big purchases to do it.
- Scotiabank Gold American Express
The Scotiabank Gold American Express is a decent card for people who want to maximize their rewards, because it offers 2 points for every $1 spent on regular spending, and 3 points for every $1 you spend on travel purchases.
You’ll also get a welcome bonus of 20,000 points when you spend $1,500 in the first 3 months of bringing the card.
It’s a good option for people who want to earn as much as possible, and don’t mind shelling out cash upfront to get there.
Tips for picking a Credit Card for Consultants
As an employee, you’re going to have to spend a lot more of your own money than when you’re a contractor.
That’s why you should make sure to pick the right credit card.
Here are some tips for picking a credit card for consultants:
- First, choose one that offers rewards that suit your lifestyle.
If you plan on spending a lot on travel, then you should probably go with a card with travel rewards.
If you like to spend a lot on gas, then you should get a card that offers high gas rewards.
- Second, you’ll have to pay attention to how much you’re going to spend every month before you decide on a card.
Credit card companies will require you to pay a certain amount in order to get those rewards.
For instance, the Scotiabank Gold American Express requires you to pay at least $3,000 each month if you want the rewards. If you pay less than $3,000, you won’t get any rewards at all.
- A third factor that you should consider is the annual fee of the card.
Most credit cards will have an annual fee, and it could range from $60 to $500 or more.
You should think about how much you value the benefits that the cards provide before deciding whether to pay the annual fee.
That being said, you should definitely be open to spending more than $60 per year on a card that does a lot for you.
- A fourth factor to consider is the promotions and perks that come along with the card.
Some credit cards will offer you a deal on a certain type of stay at hotels or at a certain restaurant, and you can take advantage of these deals if you use certain credit cards.
- Finally, you should consider what you’re going to do with the rewards.
Will you want to cash them in for actual cash, or will you want to put them towards travel?
If you want to put them towards travel, then consider how much you spend on travel, and decide on a card that will give you the maximum rewards so that you can get the maximum value out of your rewards.
The Final Word on Using Credit Cards for Consultants
Using credit cards while you’re a consultant can be risky if you don’t do it right.
It’s easy to get carried away with your spending, because you’re making so much money as a consultant, but you need to remember that it’s just money, and that it will come to an end (even if you are working for a great company). You have to be smart with your money and you have to be careful, and use credit cards while you’re a consultant while avoiding getting into a huge credit card debt.
But, if you do find a credit card that works for you and you keep an eye on your spending, then credit cards can help you save a lot of money and make your life a lot easier.
In this article we’ve talked about the 5 top credit cards for consultants, and all of these cards in this post offer excellent incentives for cardholders.
Even though each card provides great incentives, you should definitely find one that is best for you and work from there.
If you have a question about the information in this article, or you want to share your own experience using credit cards as a consultant, leave a comment below!
