Credit card use is soaring and companies have us hooked on the benefits of gaining travel reward points. Many of the conversations we have with our customers at the wicket start, and end, with the importance of travel reward points. We have found that business owners have directed most of their business-related expenses to their credit cards because they are able to accumulate points quickly and use them towards family vacations.
Here’s The Problem with Travel Reward Credit Cards
A loyal small business owner and client, Doug*, gave us some insight into his business credit card use. Doug imports products from the United States to sell in his housewares store. By paying for his imported goods using his credit card, Doug is able to collect enough travel points to pay for an annual trip with his family.
He loves this perk of using his credit card, but does not love the 4% exchange rate fee the credit card company charges him on every currency exchange. Doug is torn because his annual family trip is important, but the exchange rate charges alone are costing him approximately $8,000CAD per year.
Intuitively, Doug knows that the vacation he takes would cost less than $8,000, but the trip feels free because he gets to use those points.
We Have a Solution
We can help Doug with his problem and save him some money in the process. Doug’s bank offers him a points card in USD so all of his imported goods can continue to be paid for on his credit card. Doug can enjoy the three to four weeks of cash flow that the credit card affords him and continue to travel using his accumulated points.
At the end of the month, instead of paying his bank 4% to convert the USD into a CAD balance, he can visit us at Global Currency Services and buy the USD to pay off the balance at a rate much more competitive than what the bank is offering him.
The team at Global Currency Services is always happy to answer your questions, reach out to us at any time. We look forward to serving you.
*Doug’s name and business type has been changed to protect his privacy.