Business credit card - Questions

Discussion in 'Money Management & Banking' started by jc212, 28th Jul, 2022.

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  1. jc212

    jc212 New Member

    Joined:
    28th Jul, 2022
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    Location:
    Sydney
    Hi PropertyChat,

    Been lurking for a couple of weeks and this is my first post.

    For a bit of context:

    I have been meaning to apply for a business credit card for my company. I am in hospitality and expenses will be approx. 300-400k p.a. The majority of my expenses go to my suppliers (butchers, grocers etc), rent and of course the ATO.

    The reason I would like to have a credit card is to utilise the points and benefits.

    Questions for PropertyChat:
    What credit card do you use for your business and what do you spend your points on?
    The majority of my suppliers do not accept credit card (all use EFTI). Then things like rent and the ATO are via BPAY. I know that there are payment platforms you can use for a fee to get around this, can you recommend any that are worthwhile?
    Are credit card fees tax deductible?

    Cheers guys and gals
     
    jc212, 28th Jul, 2022
    #1
  2. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,419
    Location:
    Sydney
    NAB business credit cards are genuine business cards rather than personal cards with your business name on them. This means that they won't impact on your personal servicability for loans since the business retains full liability for the cards.

    I think there are a couple of other banks that have genuine business cards as well.

    It's usually not worth paying a surcharge to use a credit card just to get points - you'd need to work out the dollar value equivalent of the points you'd earn and compare that to the surcharge fee.
     
    Simon Hampel, 28th Jul, 2022
    #2
    Stoffo likes this.
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Especially now since the value of the points is so diminished...............

    ta
    rolf
     
    Rolf Latham, 28th Jul, 2022
    #3
    MWI likes this.
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
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    Location:
    Sydney
    Paying taxes will not generally gain points. All cards have excluded payment types ie lotto, gambling etc. Taxes commonly earn nil but some high fee cards (1.5% +) may offer points on tax payts. As Simon says generally the surcharge will exceed the point merits. The surcharge may be a business deductible for the personal rewards benefit - Two different entities perhaps ?

    Sometimes the relationship between employer and employee may mean the points produce a fringe benefit. However it MAY be exempt. Check PSLA 2004/4...250,000 pts pa cap ? This could produce a FBT issue for the employer.
    https://www.ato.gov.au/law/view/view.htm?docid=EV/5010048056788&PiT=99991231235958
     
    Paul@PAS, 29th Jul, 2022
    #4
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