Everything you buy has a cost. You pay it to get the benefits. One of the benefits offered by many payment systems is points. But what, exactly, are credit card points worth?
US News and World Report recently did a story on this. Their reporters found that the value of points varies with the card and how the points are used, but roughly speaking, each point is worth a penny. This means that if you spend $10,000 a month, you receive points worth roughly $100.
Many companies assign different values to credit card points. Certain transactions earn points, and points values can be used differently – 100 points might be worth $0.75 when looking at cash back and $1.25 when booking travel, for example. I admit that I have been using my Banana Republic card to buy groceries this month because of a special 10x promotion, which will then get me store credit to use when holiday shopping. Good thing everyone in my family likes preppy sweaters.
Personal versus business spending
No surprise, our internal Slack channels contain a lot of discussions about different payment systems, including credit card points. We recently did an informal poll about using credit cards with points and found that most people prefer cash back unless they had a specific use for the points. Some employees rely heavily on airline miles earned on their cards for family travel.
But others cited other factors in their card choices. For example, employees who do a lot of international travel noted that they had cards that didn’t have foreign exchange fees. Our survey is completely unscientific, but it does indicate two things: not all points have the same value, and there are other things to consider when card shopping.
One other thing: we don’t need controls for our personal credit card accounts. We aren’t trusting anyone to use them, except maybe another family member. It’s clear who is responsible and what the lines of accountability are. Meanwhile, many employers have to take the time to have a conversation with an employee who used a company card for personal use. Even if it was a mistake, it is still a hassle to have the talk and arrange for reimbursement.
The value of controls
Many banks and traditional credit companies offer small-business cards that offer generous credit card points and cash back programs. These cards generally have no controls other than total dollar limits.
At Bento, we believe that our value is in the controls we have, the spending visibility we offer, and the easy synching with accounting systems. Our last survey of customers showed a 17% average decrease in costs from better spending controls and reduced paperwork. Because they don’t have to micromanage employees and hold followup conversations, they have more time and energy to devote to their businesses – and the payoff from that is huge.
No credit card company offers 17% cash back, and no credit card company offers the features that make that level of savings possible. Few have our industry-leading customer support team, either. We don’t offer points, but we are proud to deliver our customers real value.